Response to consultation on Implementing Technical Standards on amended disclosure requirements for ESG risks, equity exposures and aggregate exposure to shadow banking entities
1. Do you have any comments on the proposed set of information for Large institutions?
While Reclaim Finance supports the overall approach put forward for large institutions, we identified several significant limitations in the proposed set of information:
- In Template 1, the focus is solely on financed emissions. This largely replicates the focus of pre-existing EBA guidelines and financial supervision. However, large institutions can also have very significant capital market activities whose emissions are not falling under this category. These activities often support highly emitting projects and companies. For example, data from previous Banking on Climate Chaos editions showed 61% of the support from the 6 biggest US banks to fossil fuel companies was through capital market activities from 2016 to 2022 (Banktrack, “New report: US banks’ role in capital markets reveals a hidden pipeline for fossil fuel financing”, Banktrack.org, July 2023). In this context, it is clear that facilitated emissions are also a source of risk for large institutions. Some banks – for example HSBC and Barclays – are already reporting on it (Reclaim Finance, Bank transition plans: a roadmap to nowhere, April 2025).
- In Template 3, we highlight that no elements are specifically targeting non-GHG emission metrics used by banks. However, some such metrics have been identified as relevant for ESG risk management in the recent EBA Guidelines on the topic (EBA, Final Guidelines on the management of ESG risks, January 2025). We strongly support this view and underline they can usefully supplement emission-based metrics (Reclaim Finance, Financial institutions’ transition plans: how to drive real economy decarbonization, December 2024). We stress the Institut Louis Bachelier recently developed a methodology for one of these essential metrics, the “clean to fossil fuel” ratio (Stéphane Voisin and al, Green/Brown ratio: a zoom on the Energy Supply Ratio (ESR), Institut Louis Bachelier, April 2025).
Providing the above elements, the EBA should integrate facilitated emissions reporting and reporting on non-GHG metrics – especially the “clean to fossil fuel” ratio - to its frameworks.
Additionally, regarding Template 6 to 9, we warn the EBA about methodological discrepancies in the current calculations of the GAR (AMF, Study on the taxonomy reporting of financial institutions, December 2024). We suggest the EBA works to clarify GAR calculation, notably accounting for the differences between asset types. We also suggest the EBA investigates how BTAR disclosures are conducted and whether further guidance is needed on hypothesis and data for non-NFRD assets.
2. Do you have any comments on the simplified set of information for Other listed institutions and Large subsidiaries?
The EBA opted to simplify the disclosure requirements for other listed institutions and large subsidiaries by exempting them from disclosing templates (6 templates in total against 13 for large institutions).
While this approach may be proportionate and relevant for at least some of the templates, we highlight it also exempt significant institutions from providing highly relevant information from an ESG risk management perspective, notably regarding information covered by templates 3 and 4. In fact, not disclosing these templates 3 and 4 means little information will be provided on exposure to transition risks that is closely tied to GHG emissions of the companies benefiting from financial services and likely to be especially acute for the highest emitting ones (asset stranding).
The EBA should therefore require other listed institutions and large subsidiaries to report on templates 3 and 4 on an annual basis. If the EBA considers that these templates should be simplified for these entities:
- Template 3 could be turned into a template 3A be limited to points a to i. GHG intensity disclosure could also be limited to high emitting sectors (for example the nine sectors identified by the Net Zero Banking Alliance (NZBA)).
- Template 4 could be turned into a template 4A limited to points a, d and e. Such a template 4A could also be transformed to focus on fossil fuel companies, providing the fact they have been clearly identified as a source of ESG risk and concentrating climate related risk (Reclaim Finance, “European insurance authority acknowledges fossil fuel assets are high risk”, reclaimfinance.org, November 2024). This fossil fuel focus would be facilitated by the availability of the Global Coal Exit List (GCEL) and Global Oil and Gas Exit List (GOGEL).
Additionally, we note that no disclosure related to GAR or BTAR is required for other listed institutions and large subsidiaries. If the EU sustainable taxonomy is to be useful, its use must be widened, especially in the financial sector. But we are aware of the limitations of current GAR reporting and methodological difficulties erasing from GAR and BTAR disclosures. A proportionate approach to these disclosures for other listed institutions and large subsidiaries could be to encourage disclosure on a voluntary basis.
3. Do you have any comments on the simplified set of information proposed for SNCI and other non-listed institutions?
Reclaim Finance acknowledges the need for simplified standards to be applied to SNCI and other non-listed institutions. However, we are especially worried about the current simplified templates 1A and 5A and Table 1A proposed by the EBA.
Following these, SNCI and other non-listed institutions would not provide information on their targets and underlying GHG emissions. They would also provide very limited elements on their exposure to high carbon sectors and firms, despite the high relevance of this information for ESG risk management. We therefore call on the EBA to review its proposed simplified template to include elements covering at least:
- GHG targets;
- Underlying GHG emissions;
- Exposure to high carbon sectors and companies, and/or to the fossil fuel sector.
Furthermore, we stress that the current proposal could enable high impact or high-risk LSIs that qualify as SNCIs to provide very limited information overall. We suggest EBA addresses this issue and reviews the opportunity to consider such entities like other listed and large entities.
8. Do you have any comments on the proposed additions and deletions to the sector breakdown?
Providing the high level of potential risk related to these activities, we suggest fossil fuels are also treated in a separate category distinct from other sectoral classifications.
Taking stock of the elements page 46 of the consultation document, we highlight that:
- Disclosure on financial services to fossil fuel companies is already common practice and banks provide data in aggregate terms.
- Several resources are available to banks to identify fossil fuel companies in a more precise way than NACE codes. This notably includes the free-to-use Global Coal Exit List (GCEL) and Global Oil and Gas Exit List (GOGEL).
- Fossil fuel disclosure is complementary to a disclosure based on sectoral codes. In fact, relying solely on NACE codes would not conform to a CRR3 that explicitly requires fossil fuel disclosures.
12. Do you have any further comments on Template 1?
In Template 1, the focus is solely on financed emissions. This largely replicates the focus of pre-existing EBA guidelines and financial supervision.
However, large institutions can also have very significant capital market activities whose emissions are not falling under this category. These activities often support highly emitting projects and companies. For example, data from previous Banking on Climate Chaos editions showed 61% of the support from the 6 biggest US banks to fossil fuel companies was through capital market activities from 2016 to 2022 (Banktrack, “New report: US banks’ role in capital markets reveals a hidden pipeline for fossil fuel financing”, Banktrack.org, July 2023).
In this context, it is clear that facilitated emissions are also a source of risk for large institutions. Some banks – for example HSBC and Barclays – are already reporting on it. The EBA should therefore integrate facilitated emissions reporting.
21. Do you have any comments on Template 3?
In Template 3, we highlight that no elements are specifically targeting non-GHG emission metrics used by banks. However, some such metrics have been identified as relevant for ESG risk management in the recent EBA Guidelines on the topic (EBA, Final Guidelines on the management of ESG risks, January 2025).
We strongly support this view and underline they can usefully supplement emission-based metrics Reclaim Finance, Financial institutions’ transition plans: how to drive real economy decarbonization, December 2024). We stress the Institut Louis Bachelier recently developed a methodology for one of these essential metrics, the “clean to fossil fuel” ratio (Stéphane Voisin and al, Green/Brown ratio: a zoom on the Energy Supply Ratio (ESR), Institut Louis Bachelier, April 2025). Taking these developments into account, the EBA should integrate reporting on non-GHG metrics – especially the “clean to fossil fuel” ratio.
For Other listed institutions and large subsidiaries, template 3 could be turned into a template 3A be limited to points a to i. GHG intensity disclosure could also be limited to high emitting sectors (for example the nine sectors identified by the Net Zero Banking Alliance (NZBA)).
22. Do you have any comments with the proposals on Template 4 and the instructions?
For Other listed institutions and large subsidiaries, Template 4 could be turned into a template 4A limited to points a, d and e. Such a template 4A could also be transformed to focus on fossil fuel companies, providing the fact they have been clearly identified as a source of ESG risk and concentrating climate related risk (Reclaim Finance, “European insurance authority acknowledges fossil fuel assets are high risk”, reclaimfinance.org, November 2024). This fossil fuel focus would be facilitated by the availability of the Global Coal Exit List (GCEL) and Global Oil and Gas Exit List (GOGEL).
23. Do you have any views on whether this template could be improved with some more granular information in the rows, by requesting e.g. split by sector of counterparty or other?
Providing the high level of potential risk related to these activities, we suggest template 4 also requires disclosures on fossil fuels in a separate category, distinct from other sectoral classifications.
Taking stock of the elements page 46 of the consultation document, we highlight that:
- Disclosure on financial services to fossil fuel companies is already common practice and banks provide data in aggregate terms.
- Several resources are available to banks to identify fossil fuel companies in a more precise way than NACE codes. This notably includes the free-to-use Global Coal Exit List (GCEL) and Global Oil and Gas Exit List (GOGEL).
- Fossil fuel disclosure is complementary to a disclosure based on sectoral codes. In fact, relying solely on NACE codes would not be conform to CRR3 that explicitly requires fossil fuel disclosures.
29. Do you have any comments on the proposal related the BTAR and to keep it voluntary?
On principle, we welcome the use of the BTAR. This metric potentially offers a broader view at the taxonomy eligibility and alignment of banks. However, we note that major difficulties have arisen regarding GAR disclosures, rendering existing GAR disclosures basically useless for now (AMF, Study on the taxonomy reporting of financial institutions, December 2024). This lack of integrity is likely to be reproduced for BTAR disclosures, especially as they entail the use of additional hypothesis for non-NFRD entities.
We suggest the EBA works to clarify GAR calculation, notably accounting for the differences between asset types. We also suggest the EBA investigates how BTAR disclosures are conducted and whether further guidance is needed on hypothesis and data for non-NFRD assets. If this work is completed, mandatory disclosures of BTAR could become a very relevant addition to GAR disclosures.