Response to discussion on Technical Advice on selected KPIs under the Taxonomy Disclosures Delegated Act under Article 8 of the Taxonomy Regulation

Q1. Please identify your organisation (if applicable) and indicate the capacity in which you are responding to this consultation:

Other (please specify)

Q2. Do you agree with the analysis presented?

Yes. We agree with the EBA's analysis of the Fees and Commissions KPI and with the conclusion that the current KPI entails substantial reporting effort while providing limited decision-useful information.

The KPI does not directly measure financing activities contributing to the EU environmental objectives. Most services covered by FINREP Template 22.1 are intermediary in nature and do not allow for a robust link between fee and commission income and the actual financing of Taxonomy-aligned activities. In banking practice, data are generally not collected at a level that would allow reliable allocation of fee income to individual Taxonomy-eligible or Taxonomy-aligned activities.

We also agree that considerable operational effort would be required to collect, maintain and verify the necessary data, while the informational value of the KPI remains limited. Moreover, a fee-based KPI primarily reflects a bank's business model and revenue structure rather than its actual contribution to financing the sustainable transition. For a universal bank, fee and commission income derived from investment banking activities represents only an immaterial proportion of total fee income, further limiting the relevance of this KPI.

In your response, where applicable, please assess whether voluntary disclosure of this KPI would be meaningful and feasible, and hence should be considered.

We support Option A, specifically the complete removal of the Fees and Commissions KPI from the mandatory Taxonomy disclosure requirements. We do not support replacing it with qualitative disclosures.

As correctly identified by the EBA, the KPI suffers from a structural flaw that is independent of its scope. It is a flow-based metric, whereas the Green Asset Ratio (GAR), the core Taxonomy indicator for credit institutions, is stock-based. Narrowing the KPI to a limited number of activities would not resolve this conceptual inconsistency.

Implementation would require new data models, reporting processes and allocation methodologies. In many cases, institutions would have to rely on assumptions and expert judgement, reducing comparability across institutions. Furthermore, linking fee income to counterparties' Taxonomy alignment at transaction level would require substantial investments in systems and data infrastructure despite the KPI's limited contribution to overall sustainability reporting.

From the perspective of users of sustainability disclosures, understanding the scale of financing provided to Taxonomy-aligned activities is considerably more relevant than understanding fee income generated by particular services.

We also do not consider voluntary disclosure appropriate, as it would further reduce comparability while providing little additional informational value.

Q4. Should additional items from FINREP Template 22.1 also be included in the revised KPI? Please consider in particular that (i) have been assessed as unrelated to capital market activities, e.g. ‘custody and other related services’, and (ii) those that have not been mapped to the Fees and Commissions KPI, such as ‘structured finance’, ‘loans granted’, ‘commodities’.

We do not support extending the KPI to additional FINREP Template 22.1 items such as custody and related services, structured finance, loans granted or commodities.

These activities do not demonstrate a sufficiently direct relationship with Taxonomy-aligned financing. Expanding the scope would increase methodological complexity, reporting costs and reliance on assumptions without generating proportionate informational benefits. It would also reduce comparability across institutions.

From a banking perspective, a more focused KPI limited to activities directly related to capital allocation would be more meaningful. Given that these additional activities represent only an immaterial share of our fee and commission income, expanding the KPI would not be consistent with the objective of simplifying Taxonomy disclosures.

Q5. Do you have evidence and/or arguments on potential costs and benefits associated with disclosing the Fees and Commissions KPI?

The informational benefits of this KPI are limited. It primarily reflects banks revenue structure rather than their contribution to financing the sustainable transition and provides little additional information beyond the Green Asset Ratio.

Implementation costs, however, are substantial.

Costs include:

• development of new data collection processes;

• significant changes to IT systems and data architecture;

• need for additional client information;

• increased validation, quality assurance and audit costs;

• substantial risk of methodological inconsistency across institutions;

• potential disclosure of commercially sensitive information.

• limited informational value compared to GAR;

• limited usefulness for assessing banks' actual contribution to the transition;

• relatively low relevance for investment decision-making.

In our view, implementation, maintenance and data quality costs clearly outweigh the potential benefits.

Q6.Do you agree with the analysis presented?

Yes. We agree with the EBA's analysis of the Trading Book KPI. The trading book primarily reflects short-term secondary market activity driven by market conditions rather than long-term allocation of capital to sustainable economic activities.

Trading books mainly serve liquidity provision and market-making functions and therefore only partially reflect banks' contribution to financing the sustainable transition. In many institutions, trading book data are managed at portfolio level and cannot be reliably allocated to individual counterparties or economic activities.

Compared with the Fees and Commissions KPI, the conceptual case for removing the Trading Book KPI is even stronger, given its highly volatile and short-term nature.

In your response, where applicable, please assess whether voluntary disclosure of this KPI would be meaningful and feasible, and hence should be considered.

We support Option A, namely the complete removal of the Trading Book KPI from the Taxonomy disclosure framework. We do not support replacing it with qualitative disclosures.

The KPI is heavily influenced by short-term market conditions and trading activity and therefore provides only limited information about a bank's sustainability strategy or long-term contribution to transition finance. Its value may fluctuate significantly due to market developments unrelated to sustainable financing decisions.

Restricting the KPI to market-making activities would not solve these conceptual limitations, since market liquidity is supported by a broad range of trading activities rather than formal market making alone.

Moreover, integrating Taxonomy data into trading systems capable of processing large volumes of short-term transactions would require significant operational investments while generating limited informational benefits.

We also do not recommend voluntary disclosure, as it would reduce comparability without providing meaningful additional information.

Q8. Do you have evidence and/or arguments on potential costs and benefits associated with disclosing the Trading Book KPI?

The informational benefits of the Trading Book KPI are limited. The indicator primarily reflects short-term market activity and is only weakly linked to banks' long-term contribution to financing the sustainable transition.

Implementation costs are significant and include:

• reporting system enhancements;

• development of new methodologies;

• limited availability of granular data;

• significant maintenance and control costs.

• limited informational value;

• weak relationship with transition financing;

• low comparability between institutions.

Overall, the cost-benefit assessment supports removing the KPI.

The KPI also presents low comparability across institutions due to differences in trading activities and business models.

Overall, the implementation costs clearly outweigh the limited informational value.

Q9. Do you agree with the analysis presented and the conclusion to narrow down the investment firms’ KPI?

Yes. This follows the same logic we support for the fees and commissions KPI. Services with no direct influence on the client’s investment choice should not fall within the scope of an indicator measuring capital allocation.

Please explain if you think that other services, e.g. execution of orders on behalf of clients, should be included in the revised KPI.

Yes, we agree with narrowing the scope to the four services. Execution of orders on behalf of client should not be included, as it is purely operational in nature and gives the investment firm no influence over the client’s choice of the instrument.

Q11. Do you consider it more appropriate for the KPI to reflect the value of assets covered by the investment services rather than the monetary benefits generated?

Yes. A KPI based on the value of the assets under management better reflects the actual scale of capital engagement than fee income, which depends on pricing structure and business volatility than the real volume of assets managed. This approach also aligns the methodology with off-balance sheet AuM KPI for credit institutions.

Q13. Do you agree with the analysis presented and proposed conclusions?

Yes. The GAR and KPIs of subsidiaries with a different nature of business reflect fundamentally different types of assets and activities. Combining them into a single aggregated indicator would blur this distinction and be less useful to the reader than separate, transparent KPIs.

i. Should the KPI disclosed by the parent undertaking, reflecting the group’s main or prevalent activity, be used? If not, what alternative methodology should be applied?

We believe that where a single KPI is required at group level, the KPI disclosed by the parent undertaking and reflecting the group's predominant activity should be used. This approach is the most transparent for users and remains consistent with existing supervisory and reporting frameworks applied at group level.

ii. In the case of a credit institution-led group, such as a financial conglomerate, should the consolidated KPI disclosed by the parent undertaking also incorporate the assets of the insurance (and non-financial) undertaking, rather than accounting for the insurance (and non-financial) undertaking solely through the equity method? Please justify your answer in terms of feasibility, usability and transparency of sustainability information.

We do not support the development of additional weighted KPIs combining banking, insurance and investment activities. These sectors operate under different regulatory frameworks, use different Taxonomy metrics and are characterised by distinct risk profiles and business models. In addition, a different consolidation method is applied than the one envisaged under the Taxonomy Regulation, namely prudential consolidation. Combining such activities into a single KPI could reduce transparency and impair comparability across financial groups. For bank-led groups, insurance and non-financial undertakings should continue to be reflected under existing consolidation principles. Creating additional Taxonomy-specific aggregation methodologies would increase reporting complexity without delivering proportionate benefits to users.

Q15. Which KPIs you do think are necessary and should be required for groups with mixed activities where the credit institution is the parent company such as credit institution-led financial conglomerates, credit institution-led financial holding companies and relevant mixed financial holding companies?

For mixed-activity groups led by a credit institution, reporting should focus on KPIs that genuinely reflect the group's contribution to financing the sustainable transition while preserving transparency across different business sectors.

We recommend using the credit institution's GAR as the principal group-level indicator, complemented, where relevant, by the off-balance sheet AuM KPI. Material subsidiaries operating different business models should disclose their own sector-specific Taxonomy KPIs (e.g. asset management KPIs) within the consolidated report rather than being incorporated into a single aggregated indicator.

Subsidiary-level disclosures should only be required for entities that are material from the group's perspective, particularly where they have a significant impact on the group's risk profile, asset base or sustainability profile. This approach is consistent with the principle of proportionality, preserves transparency across different business models and avoids unnecessary reporting burdens.

Q16. Do you agree with the analysis presented and the conclusion that OpEx financing should not be explicitly incorporated in the methodology for calculating financial undertakings’ KPIs? Please provide your rationale for supporting the explicit inclusion of provisions allowing financial undertakings, on a voluntary basis, to use the OpEx KPI disclosed by their counterparties when calculating their own KPIs.

We agree with EBA's conclusion that OpEx financing should not be explicitly incorporated into the methodology for calculating financial undertakings' KPIs.

Operating expenditure is not investment expenditure by nature and generally does not lead to the structural transformation of economic activities. Capital expenditure (CapEx) provides a more appropriate measure of investments supporting environmental objectives and the transition to a sustainable economy.

This approach is also conceptually consistent with the broader Taxonomy framework. As highlighted elsewhere in the Discussion Paper, combining stock-based and flow-based metrics reduces methodological consistency. Introducing OpEx would create similar inconsistencies while running counter to the simplification objectives of the Omnibus package.

Furthermore, reporting requirements for OpEx by non-financial undertakings have already been reduced or simplified. Requiring financial institutions to use counterparties' OpEx information would therefore create regulatory inconsistencies, increase reliance on estimates, reduce data quality and potentially increase greenwashing risks.

We also do not support explicitly allowing the voluntary use of counterparties' OpEx KPIs. Such flexibility would reduce comparability across institutions, increase operational burden through additional methodological disclosures and create incentives to select methodologies that maximise reported KPI values rather than improve decision-useful information.

Q17. Should the credit institution’s AuM KPI (Annex V) and the KPI for asset managers (Annex II) be merged? Please explain why and how, including the content of the information that should be retained in a potential merged KPI.

Yes, in principle we support simplifying Taxonomy disclosures by merging the AuM KPI for credit institutions and the KPI for asset managers.

Any merged framework should take into account the fundamental differences between the business models of credit institutions and asset managers. Banks often act as distributors of investment products or provide portfolio management services only to a limited extent, whereas asset managers are directly responsible for investment decision-making.

If the templates are merged, the methodology should preserve the ability to distinguish:

• assets managed directly by credit institutions;
• assets managed by specialised asset management entities; and
• the respective degree of responsibility for investment decisions. 

At the same time, the merged framework should build on the existing reporting architecture for credit institutions, which constitutes the primary consolidated reporting framework in bank-led groups. This would support simplification while preserving comparability and avoiding the need to develop an entirely new methodological structure.

Q18. What are your views on the design of off-balance sheet item reflecting financial guarantees to financial and non-financial undertakings in a potential merging of the asset management activities as presented?

Financial guarantees should remain a separate, clearly identifiable line item within the merged template rather than being combined with assets under management into a single aggregated figure.

Financial guarantees represent contingent off-balance-sheet exposures that are fundamentally different in nature from client-owned assets under management. Combining these elements would reduce the conceptual clarity of the KPI by mixing measures of a different nature, rather than improving its informational value.

At the same time, any methodology for reporting financial guarantees should remain proportionate and rely, as far as possible, on data already available through existing risk management and regulatory reporting processes. It should be simple, transparent and methodologically consistent with the broader Taxonomy disclosure framework, while avoiding unnecessary additional data collection from counterparties and minimising the risk of double counting exposures across different Taxonomy KPIs.

Q19. Do you have any additional comments or suggestions to improve, simplify or clarify the disclosure requirements within the scope of this Call for Advice, including through redrafting of instructions, and clarification of definitions, or the streamlining of terminology?

From a banking sector perspective, the primary objective of the review should be to enhance the usability of Taxonomy disclosures by focusing on indicators that provide genuine decision-useful information while reducing unnecessary reporting complexity.

In particular, we recommend:

• focusing mandatory disclosures on the core stock-based indicators, notably the Green Asset Ratio (GAR), while reconsidering the need for flow-based KPIs that do not directly reflect financing of Taxonomy-aligned activities;
• introducing a consolidated description of the 10% materiality threshold, clearly specifying, for each KPI, the applicable denominator, testing methodology and reporting consequences, in order to improve consistency and comparability across institutions;
• further harmonising definitions, instructions and validation requirements across reporting templates;
• simplifying technical requirements and reducing the number of mandatory reporting tables;
• providing more detailed regulatory guidance to promote consistent interpretation across institutions;
• clarifying the construction of the GAR denominator, including the treatment of consumer lending exposures; and
• reviewing Template 2 to ensure that it more accurately reflects banks' contribution to financing the sustainable transition. 

More broadly, we believe that the Taxonomy framework should remain conceptually centered on stock-based indicators. Several proposals discussed in the Discussion Paper illustrate the inherent limitations of flow-based KPIs, which are conceptually inconsistent with the Green Asset Ratio and provide limited additional decision-useful information. We therefore encourage the EBA to continue simplifying the disclosure framework in this direction.

Ultimately, the success of the Taxonomy framework depends not only on the quantity of reported information but primarily on its quality, comparability and decision-usefulness.

Name of the organization