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 analysis presented.

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

In our view, option a) – removing the Fees and Commissions KPI from the Taxonomy disclosure requirements or replacing it with qualitative disclosure requirements considering 10% materiality threshold – is the most viable of the options presented. 

Given the limitations of this particular KPI as an indicator for the purpose of Taxonomy disclosures from user’s point of view, the materiality of the KPI and costs associated with its computation with respect to its benefits, from the preparer’s point of view and the overall objective of simplifying the regulatory framework and improving its usability, we support removing the Fees and Commissions KPI, without replacing it with qualitative disclosure requirements. 

The introduction of qualitative requirements would lead to less comparability – due to the lack of standardization – and would also need to be accompanied by the introduction of rules for omitting sensitive information to cover the cases mentioned in para. 32 of the DP (disclosures may reveal the fees and commissions charged by a credit institution for a single service provided to a client). As this would further complicate reporting requirements, we do not think a requirement to report qualitatively would be reasonable from a cost-benefit-perspective.

Regarding the last part of this question, concerning whether voluntary disclosure of this KPI would be meaningful and feasible, we support permitting voluntary disclosure.

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’.

As stated in our answer to question 3, we are in favor of removing the Fees and Commissions KPI from the Taxonomy disclosure requirements and therefore not in favor of including additional items from FINREP Template 22.1.

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

N/a.

Q6.Do you agree with the analysis presented?

Yes, we agree with the analysis presented.

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

In our view, option a) – removing the Trading Book KPI or replacing it with qualitative disclosure requirements on the trading portfolio also considering the 10% materiality threshold – is the most viable of the options presented. 

Given the limitations of this particular KPI as an indicator for the purpose of Taxonomy disclosures from user’s point of view, the materiality of the KPI and costs associated with its computation with respect to its benefits, from the preparer’s point of view and the overall objective of simplifying the regulatory framework and improving its usability, we support removing the Trading Book KPI, without replacing it with qualitative disclosure requirements. Alternatively, consideration could be given to limiting the mandatory reporting of the Trading Book KPI to financial undertakings with specialized business models. [Please also see IDW’s comments on the Commissions Draft Delegated Regulation amending Commission Delegated Regulation (EU) 2021/2178, (EU) 2021/2139 and (EU) 2023/2486 (Ares(2025)1546172), available at: https://www.idw.de/IDW/Medien/IDW-Schreiben/2025/IDW-Comments-On-Draft-Delegated-Regulation-Taxonomy.pdf.]

The introduction of qualitative requirements is not reasonable from our point of view, given that the introduction of qualitative requirements would lead to less comparability – due to the lack of standardization. Furthermore, the Trading Book KPI mainly reflects short term secondary market activity and may not accurately indicate how credit institutions finance or allocate capital to Taxonomy-aligned activities (para. 57 of the DP) and may not reflect institution’s long-term strategy in the context of sustainable finance (para. 59 of the DP).

Regarding the last part of this question, concerning whether voluntary disclosure of this KPI would be meaningful and feasible, we support permitting voluntary disclosure.

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

N/a.

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

Yes, we agree with the analysis presented and the conclusion to narrow down the investment firms’ KPI.

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 limiting the KPI to the following four elements for the purpose of Taxonomy disclosures.

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?

N/a.

Q12. Do you agree with the analysis presented and the conclusion to align the grandfathering rules with the approach set out in EU Green Bond Regulation?

Yes, agree with the analysis presented and the conclusion to align the grandfathering rules with the approach set out in EU Green Bond Regulation. 

Our understanding is that the grandfathering rules set out in the EU Green Bond Regulation only cover unallocated proceeds related to financial products financing Taxonomy-aligned economic activities and exclude allocated proceeds from scope, thus allowing unlimited grandfathering for proceeds that have already been allocated before the change in the rules (para. 88 of the DP). Therefore, aligning the Taxonomy Regulation’s grandfathering rules with those of the EU Green Bond Regulation would essentially mean that no grandfathering rules would be needed for Taxonomy Reporting of use of proceeds known exposures as they are fully allocated. We welcome this approach because in case of use of proceeds known exposures, the Taxonomy assessment has to be performed upon conclusion of the contract and will remain stable thereafter. The need for subsequent reassessment – even though the financial undertaking no longer has any influence on the terms of the transaction – would be non-sensical, as it would run counter to the Taxonomy Regulation’s intended steering effect. 

If this understanding is incorrect and a further assessment is envisaged for use of proceeds known exposures after alignment of the grandfathering rules, we would like to draw attention to the following: Article 7 para. 5 of the DDA in the Omnibus-I-Package version only allows for grandfathering in situations “where the technical screening criteria laid down in the delegated acts adopted pursuant to Articles 10(3), 11(3), 12(2), 13(2), 14(2) or 15(2) of Regulation (EU) 2020/852 are amended”. It therefore does not (explicitly) refer to those situations in which the text of the Taxonomy Delegated Acts is unchanged, but other (national) regulations, circumstances or conditions that are referred to by dynamic reference do change. In these cases, even though the Taxonomy Delegated Acts remain unchanged, the European Commission is of the opinion that a new assessment must be carried out, to consider the new regulations without applying the grandfathering rules. [European Commission, Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets (third Commission Notice), (C/2024/6691), answer to question 19, available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C_202406691.] We suggest serious thought be given to revising this approach. 

Regarding the issue presented in EBA’s analysis, we would also like to provide further input: Unlike non-financial undertakings, whose reporting under Article 8 of the Taxonomy Regulation is based on flow variables – revenue, capital expenditures, and operating expenditures for the reporting period – financial undertakings report partly on the basis of flow variables and partly on the basis of cut-off date values (as for example the Green Asset Ratio (GAR)). Reporting on cut-off date values automatically raises the question of when and how often a new taxonomy assessment must be conducted after the initial assessment (i.e., either upon initial taxonomy reporting or upon completion of a new transaction) has been performed.

So far, the DDA does not contain clear rules on whether, when and how often a new taxonomy assessment must be conducted after the initial assessment. We therefore see a need to introduce clear rules in the DDA so as to distinguish between use of proceeds known and use of proceeds unknown exposures. The new grandfathering rules for use of proceeds known exposures could be based on these new rules. 

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

We agree that the current rules presented in the binding legal texts have serious shortcomings regarding consolidated reporting for Taxonomy purposes. We support as a general rule, a requirement for the group to disclose the KPI(s) relevant for the type of the parent undertaking, following the rules set out in the Disclosures Delegated Act (para. 111 a) of the DP). In most cases this approach would be appropriate for determining the group main reporting regime. 

Regardless of how the new regulations regarding consolidated reporting for Taxonomy purposes are structured, we believe it is of the utmost importance for the regulations to be established within a binding legal text rather than in non-binding FAQs. [Please also see IDW’s letter regarding Taxonomy FAQs, available at: https://www.idw.de/IDW/Medien/IDW-Schreiben/2025/IDW-Simplifications-Taxonomy-Reporting-Schreiben-250109.pdf.] 

We are of the following opinion regarding the reference to Article 29a (4) of Directive 2013/34/EU (“Accounting Directive”) proposed by the European Commission in its FAQs [European Commission, Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act under Article 8 of EU Taxonomy Regulation on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets (second Commission Notice), (C/2023/305), Answer to question 12, available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C_202300305.] and EBA in the DP (para. 103 of the DP): [Please also see IDW’s letter regarding Taxonomy FAQs, available at: https://www.idw.de/IDW/Medien/IDW-Schreiben/2025/IDW-Simplifications-Taxonomy-Reporting-Schreiben-250109.pdf.]

The Taxonomy Regulation does not contain an analogous provision to Article 29a (4) of the Accounting Directive as amended by the Directive (EU) 2022/2464 (“CSRD”). There is also no direct application requirement for Article 29a (4) of the Accounting Directive as amended by the CSRD, as Taxonomy Regulation merely refers to the provisions of Articles 19a and 29a of the Accounting Directive in its scope of application. It should also be noted that Article 29a (4) of the Accounting Directive as amended by the CSRD requires the reporting parent undertaking to “provide an adequate understanding of, as appropriate, the risks for, and impacts of, the subsidiary undertaking or subsidiary undertakings concerned” and does not require the reporting parent undertaking to include the disclosures of the included subsidiary undertaking at an individual level. 

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 support removing the requirement to disclose a weighted average KPI and agree that only a single KPI or single set of KPIs should be required to be disclosed. We believe the reporting regime should be determined according to the type of parent undertaking that is required to prepare the disclosures.

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 support removing the requirement to disclose a weighted average KPI and agree that only a single KPI or single set of KPIs should be required to be disclosed. We believe the reporting regime should be determined according to the type of parent undertaking that is required to prepare the disclosures.

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?

We do not support an obligation to publish subsidiary level information (regardless of whether this is on the basis of the single undertaking or as grouped together with other subsidiaries). Such a requirement would undermine the Accounting Directive’s exemption regime, which is also applicable to Taxonomy Reporting. Furthermore, it is still unclear whether any of this additional information would actually be used by financial undertakings.

We believe that, with regard to potential subsidiary- or subgroup-level reporting, any additional disclosure requirement for mixed groups or groups in general should be carefully assessed in terms of its benefits against the additional cost associated with preparation, assurance and users’ understanding of such disclosures. The mere fact that information (for instance on intercompany revenue) is not reported following consolidation principles does not justify the disclosure of additional sets of KPIs or even contextual information. We are not convinced that any such information needs to be disclosed, until its informative value has been proven. Therefore, we suggest taking financial undertakings’ informational needs as the basis for further assessment. We would argue that, in most cases, group-level KPIs ought to be sufficient and appropriate to inform financial undertakings’ lending decisions for unknown use of proceeds cases. We doubt that specific counterparty disclosures (on an entity-instead of group-level) add value or are conceptually more relevant. When this is not the case, we believe that voluntary additional information can suffice to cover these information gaps. In our view, if a financial undertaking needs more granular information, including cases where the use of proceeds is known, other forms of (bilateral) communication between the financial undertaking and the counterparty should be considered, rather than having the counterparty rely on the publicly available annual Taxonomy disclosures that will typically be published too late to allow financial undertakings to consider them on a timely basis. 

These considerations generally apply to all forms of group reporting. For mixed groups specifically, the information gaps may be more pronounced due to the conceptually different reporting regimes between non-financial and the different types of financial undertakings. However, we question whether separate disclosures on the financial undertakings’ activities are typically relevant. 

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.

Yes, we agree with the analysis presented and the conclusion that OpEx financing should not be explicitly incorporated in the methodology for calculating financial undertakings’ KPIs.

We also are of the opinion that the inclusion of the OpEx KPI of non-financial undertakings in the KPIs disclosed by financial undertakings, even on a voluntary basis, would likely add complexity and cost, with little impact on the informative value of Taxonomy reporting by financial undertakings (para. 120 of the DP). Inherently voluntary disclosure within the Taxonomy reporting regime can generally only yield very limited benefits for non-financial undertakings since financial undertakings need to adhere to the mandatory KPIs in preparing their own Taxonomy KPI disclosures. If OpEx remains a non-factor for financial undertakings’ (mandatory) KPIs, expanding the OpEx KPI seems rather pointless. 

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.

N/a.

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?

N/a.

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?

The annex to the attached letter contains a subsequent section (section 2), in which we discuss some specific issues not addressed by the ESA’s CPs/DPs. We refer to this section.

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