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?

We appreciate the EBA’s efforts in proposing simplifications to Pillar 3 ESG disclosures as outlined in the Consultation Paper. However, we believe that the current proposals do not adequately achieve the intended simplification goals. Instead of reducing complexity, they appear to introduce additional granularity and intricacy, particularly for large institutions.

Generally speaking, we recommend that the EBA apply a consistent materiality approach, set in the Guidelines on the management of environmental, social and governance (ESG) risks, to these disclosures in order to reduce the reporting burden on institutions and ensure that only material information is disclosed.

In addition, we have noted that under article 433a (paragraph 2) of CRR 3, large non-listed institutions are expected to publish ESG disclosures annually. Yet, in the EBA consultation, a semi-annual frequency is proposed for these institutions, which represents a tightening of the framework.

We believe that the frequency for large non-listed institutions should be revised back to annual to ensure consistency with CRR 3. It seems essential to remain aligned with CRR 3 to avoid unnecessary complexity and reporting burden for these institutions.

2. Do you have any comments on the simplified set of information for Other listed institutions and Large subsidiaries?

For the template 5, subsidiaries already provide information through their contribution to the consolidated reporting of the parent company. Consequently, disclosing a new template 5A for these entities is an additional requirement with the implementation of a new template which a different granularity level (NUTS 3 vs. NUTS 2). We propose to consider the simplified set of information as a regulatory minimum, and it should be possible to disclose either the same template as their parent company (template 5A for instance) or the simplified template (template 5 for instance) at the entity's discretion.

3. Do you have any comments on the simplified set of information proposed for SNCI and other non-listed institutions?

Simplified reporting for smaller entities: The lighter templates for these entities deviate from the templates planned for large institutions. Given that small and other institutions, as well as large subsidiaries, are included in the scope of consolidation of the bank, the information is already available at the terminals of these institutions. It therefore appears more complex, in terms of configuration and operational management, to produce a light report than a complete report, particularly in terms of access to information. 

The French Banking Federation recommends to specify that the light publication of the Pillar 3 ESG templates is a minimum obligation and to allow institutions to publish a full Pillar 3, regardless of their size.

5. Do you have any comments on the transitional provisions and on the overall content of section 3.5 of the consultation paper?

We appreciate the inclusion of the transitional provisions to adapt to the revised ESG disclosure requirements. 

We are grateful for the EBA's confirmation during their hearing that institutions may begin applying the transitional provisions right away, without needing to wait for the forthcoming no-action letter that the EBA will still provide.

However, we wish to highlight two specific areas of concern:

• Firstly, regarding columns: Since EU Taxonomy alignment data is required within Templates 1 and 4 (in the column labeled 'of which environmentally sustainable CCM'), we formally request that the EBA confirm these specific data fields/columns fall within the scope of the established transitional arrangements.
• Secondly, all digital frameworks should be coherent (and also updated) with the templates requested during the transitional period. For instance, we seek confirmation that ESG-related ad hoc XBRL reporting for templates 6-10 will not be mandatory until at least the first quarter of 2027.

Additionally, we would like to request an 18-month delay from the publication of the Implementing Technical Standards (ITS) to implement the changes in template 5 of the disclosure requirements, as they are challenging especially the distinction between the types of risks.

8. Do you have any comments on the proposed additions and deletions to the sector breakdown?

We seek clarification on the rationale behind the inclusion of ETH Zurich classification, as it appears to duplicate the existing framework concerning PAB excluded exposures. This overlap not only raises questions about the necessity of this proposal but also adds further complexity to its implementation.

9. Do you have any views with regards to the update of the templates to NACE 2.1?

As acknowledged by the EBA in its press release, the harmonisation of NACE codes is essential to reduce costs for banks and to enhance the analytical quality of reported data.

Moreover, we would like to highlight that it is important for banks to implement the revised NACE codes at the same time across all the reporting framework and to avoid sequential changes that would require banks to maintain several versions of NACE codes in parallel and consequently, that would imply additional undue operational costs.

Following the JRBC- Advice on the implementation of the NACE Rev2.1, it appears that the revision of the NACE codes will start from 1 January 2026. The NACE Rev2.1 is currently being implemented in our information systems, to be compliant with this opinion, as the ECB and EBA confirm that they will follow this advice and that banks subject to reporting under ECB regulations and/or the EBA supervisory reporting framework will apply the new NACE Rev. 2.1 classification as of January 1, 2026. Therefore, what nomenclature should be applied for the P3 reports concerning the financial years closed on 31/12/2025 and 30/06/2026? NACE 2.0 following the current templates 1 & 5, or NACE 2.1?

11. Do you have any comments on the inclusion of row “Coverage of portfolio with use of proxies (according to PCAF)”?

Row 57 of template 1 seems to be a duplicate of column K and does not provide additional information. It should be deleted.

Failing that, we would appreciate further clarifications on the definition of “proxies”. PCAF does not define the term in its methodology.

12. Do you have any further comments on Template 1?

For the template 1, the article 12.2 from Delegated Regulation (UE) 2020-1818 indicates that are excluded from the Paris agreement benchmark indices the undertakings for which it is estimated that they can significantly harm at least one of the environment goals from article 9 from Delegated Regulation (UE) 2020/852 from the European Parliament and from the European Council. However, the information that an undertaking would be detrimental to an environmental objective is not available in the URD or in the data made available by the data providers. It would therefore be appropriate not to include them.

As one of the purposes of this consultation is to avoid any burden of work for institutions and to promote simplification, we suggest withdrawing new sectors proposed such as telecommunications or digital sector. 

Regarding financed emission topic, it seems that requirements rely only partially on the PCAF Standard. Unlike CSRD that refers to PCAF explicitly as the norm to be followed. If the deviation to PCAF standard is assumed by the EBA then it should explicit the requirements that are in deviation of the Standard when it’s the case

A consistency of definition of fossil fuel sector is necessary between the more granular sector definition in template 1 (based on ETH Zurich) and in the template 3). The alignment of definition to existing publication is necessary

For a counterparty, if in the calculation of funded GHG emissions we use both actual data (on scope 1 and 2 for example) and estimated data (PCAF for scope 3 for example), then how to calculate column K "percentage of the gross book value of the portfolio according to company-specific statements"?

=> CASE 1: are the data considered estimated once we use PCAF data for 1 of the 3 scopes?

=> CASE 2: are data considered real when we use data directly from our counterparts for 1 of the 3 scopes?

=> CASE 3: should the gross book value of the portfolio be prorated according to the company’s own statements?

For large institutions, we request that the column (c) related to exposure alignment be published annually rather than semi-annually, as it is directly linked to taxonomy reporting which operates on an annual cycle. This adjustment would ensure consistency between related reporting requirements and reduce unnecessary interim reporting burdens. 

It is also important to gray this column for entities that are not subject to the Taxonomy Regulation.

Additionally, line 56 “total” requires credit institutions to disclose their total exposure: scopes 1, 2 and 3 for all sectors. This line also includes the total scopes 1, 2 and 3 of lines 53 to 55 “Exposures towards sectors other than those that highly contribute to climate change” for which credit institutions shall not disclose scope 1, 2 and 3. Can you clarify that the total expected in line 56 does not include these lines 53 to 55?

To enhance clarity, we also recommend darkening lines 1 “Exposures towards sectors that highly contribute to climate change” and 52: “Exposures towards sectors other than those that highly contribute to climate change” as we understand that no information should be reported.

16. Should Template 2 in addition include separate information on EPC labels estimated and about the share of EPC labels that can be estimated?

Please see our response to Q20.

17. Should rows 2, 3 and 4 and 7, 8 and 9 for the EP score continue to include estimates or should it only include actual information on energy consumption, akin to the same rows for EPC labels?

Please see our response to Q20.

18. Do you have any comments on the inclusion of information on covered bonds?

The regulatory requirements for covered bond disclosures are already managed through the EU Covered Bond Directive (Directive 2019/2162). To prevent scattered reporting and misaligned disclosure schedules, we believe that ESG-related data should be integrated within the specialized covered bond reporting frameworks.

20. Do you have any further comments on Template 2?

This template does not facilitate simplification; rather, it introduces additional details and complexity without delivering substantial added value.

Columns B-N, Rows 5 and 10: we propose to delete EPC labels due to the lack of available data and standardisation criteria across EU countries. Additionally, The BCBS does not mandate the use of EPC labels. Instead, it emphasizes the importance of providing information related to energy efficiency. 

If the EPC still remains as a reference for this template, banks cannot obtain EPC’s during the loan. It would be welcome from the EBA to explicitly indicate that the EPC to be considered is the EPC at origination only, with no need to request an updated version unless it is made available in specific context. 

We note that in the final Guidelines on the management of Environmental, Social and Governance (ESG) risks the reference to EPC label has been removed (Art 81 (f) for energy efficiency (A breakdown of portfolios secured by real estate according to the level of energy efficiency of the collateral).

The disclosures on ESG risks associated with covered bonds should be included in the regulatory and disclosure framework for covered bonds and not under Pillar 3 ESG. We suggest deleting it.

21. Do you have any comments on Template 3?

• The alignment metrics in Template 3 require disclosure of portfolio decarbonisation targets set for alignment purposes. We would appreciate clarifications on the term «targets», whether it is a commitment or anticipated indicator.
• We request the suppression of columns h and i : given that the 2030 targets are approaching and in order to avoid future revisions of the ITS being necessary to update this model. We recommend maintaining the columns related to additional targets (j-l) only, with precision of the date in the complementary narrative elements.
• We also ask to have a consistent materiality approach with the EBA ESG guidelines.

The EBA should clarify the relationship with TCFD sub-sectors, as we believe that, de facto, all sectors are analyzed through the lens of materiality, including the 18 TCFD sub-sectors. Therefore, we do not understand why these sub-sectors are specifically mentioned and what their particular treatment should be compared to any other sector or sub-sector. This ambiguity requires urgent clarification to ensure consistent implementation across institutions.

Finally, IAE sectors concern only energy sectors while template 3 concerns all sectors.

22. Do you have any comments with the proposals on Template 4 and the instructions?

This template requires disclosure of the top 20 carbon-emitting companies in the world. we would suggest:

1. the ITS to specify a single source to ensure comparability between banks.
2. a yearly frequency for the column on alignment on template 1, in order to be consistent with the yearly disclosure of templates in the Taxonomy) - cf. our answer to question #1

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?

We do not think that more granular information is needed. This template does not provide much information in terms of risk management. Therefore we think that any new additional information to report should be avoided. 

27. Do you have any further comments on Template 5 and on its simplified version Template 5A?

The major change to this table concerns its increased granularity: whereas previously it only covered the European Union and total exposures, it now includes ten additional tables broken down by NUTS 3 zone, i.e., at the department level in France, bringing the total to twelve tables. While we do not question the desire to move towards greater geographical precision, we believe that this increased granularity will not necessarily improve the quality of the information. In addition, the publication of 12 templates is not in line with the desire to simplify the reporting of Pillar 3. We therefore suggest limiting the number of template 5 to 3: total exposures, European Union, Top 10 NUTS 3 aggregated. Indeed, methodological practices vary greatly from one institution to another, particularly in the definition of sensitivity to physical risks (not harmonized), the time horizons considered (some going as far as 2050, others remaining short-term), or the climate scenarios chosen (some institutions using extreme scenarios, others, like ours, relying on RCP 4.5). As long as these methodological differences persist, the additional level of geographical detail will not create greater clarity and comparability. Furthermore, work carried out within the European Banking Federation (EBF) has already highlighted both common challenges between institutions and significant heterogeneity in methodological approaches, thus highlighting the need for greater clarification from the EBA on physical risk reporting requirements.

Generally speaking, with new information to be disclosed and a more detailed geographical dimension, these various developments do not simplify this table and do not contribute to comparability between institutions.

Given the number of climate hazards to be considered, it would be useful to have details to calculate the materiality of climate risks 

We believe that the requirement for banks to disclose impairment under Pillar 3 related to physical risk should be removed. This information is not directly linked to physical risk and could lead to misleading interpretations. Disclosing such impairment may create confusion among stakeholders regarding the actual impact of physical risks on financial performance, rather than providing clarity.

The same asset can be sensitive to several climatic hazards. It is essential to specify that the total of exposures subject to physical risk in column g cannot be equal to the sum of columns h-k.

Several operational points require clarification from the EBA in our view to ensure consistent implementation of the table. First, an important question concerns the location of exposures in the case of a group with multiple sites: how to determine the reference geographical area for the exposure? It would be essential for the EBA to clarify this point.

Furthermore, the distribution of exposures across several risks also needs to be clarified: if the same exposure is simultaneously affected by several physical risks (for example, both water and land), should it appear in several columns? And if so, should it be counted only once in the total? This question is crucial to avoid double counting and ensure the intelligibility of the data. This type of situation had already been raised in the context of the old table relating to acute and chronic risks, and it would be useful for the EBA to refer to the existing FAQ (2024-7080) on this point or publish new methodological guidance.

Finally, we wonder why keeping the mention of “acute” and “chronic” in the cell “Z-axis - Geographical area subject to climate change physical risk acute and chronic events”.

29. Do you have any comments on the proposal related the BTAR and to keep it voluntary?

Taxonomy disclosures, including GAR and BTAR, should be removed entirely from Pillar 3 reporting.

30. Do you have any comments regarding the adjustments to template 10?

Template 10 should be removed entirely from Pillar 3 reporting.

If it cannot be achieved, we have 3 points regarding template 10:

• There is a lack of clarity regarding which specific instruments should be included in Template 10 under the rows designated for equity exposures. Additionally, the criteria for classifying an equity exposure as a 'green exposure' remain undefined.
• The ITS incorporates a new breakdown category "Of which: small and medium-sized enterprises" under loans and advances to non-financial corporations in Template 10. This breakdown is not present in either the GAR or BTAR templates. In the interest of simplification and ensuring consistency across different templates, we propose eliminating this breakdown.
• We do not understand the line “Of which: Loans collateralised by residential immovable property” for non-financial undertakings.

31. Do you have any further comments on the Consultation Paper Pillar 3 disclosures requirements on ESG risk?

• Regarding the templates 6 to 10: Taxonomy disclosures, including GAR and BTAR, should be removed entirely from Pillar 3 reporting.  While aligning with EU Taxonomy templates is beneficial, the current complexity of computing EU Taxonomy Key Performance Indicators (KPIs) for banks poses significant challenges.
• Interaction between taxonomy regulation and Pillar 3 ESG requirements

Following the Delegated Act amending the Taxonomy Disclosures published on 4^th July, option given to Institutions to claim (or not) that our activities are associated with environmentally sustainable activities under the Taxonomy Regulation has side effects on Pillar 3 ESG requirement especially for template 1 or 5 (e.g. template 1 column c “Of which environmentally sustainable”). A consistent approach across regulation is necessary. 

32. Are the new template EU SB 1 and the related instructions clear to the respondents? If no, please motivate your response.

Generally speaking, we wonder about the sequencing of consultations on Pillar 3 disclosures compared to the upcoming consultations on supervisory reporting (COREP and FINREP), insofar as the mapping of Pillar 3 information defined based on the existing supervisory reporting may be modified after the next consultations on supervisory reporting.

More specifically, we would like to draw your attention to the fact that ensuring consistency between regulatory reporting and the Pillar 3 disclosures regarding exposures to shadow banking entities is important for institutions to avoid undue operational costs. 

Regarding the Pillar 3 disclosures, institutions will be required to disclose the information concerning the aggregate exposure to shadow banking. We wonder about the scope of the requirement. 

Currently, the 10 largest exposures to institutions are reported in the large exposures reporting, supplemented by disclosure thresholds according to the size of the institutions. 

The proposed extension of disclosures to all exposures raises questions of implementation and operational complexity due to the numerous data to be collected compared to the relevance of the information. Therefore, for simplifying publication purposes, we suggest maintaining the current framework on exposures to shadow banking entities and limiting them to the 10 largest exposures to institutions. 

Regarding the level of aggregation, we seek confirmation that aggregated shadow banking exposures should be reported considering individual counterparty exposures, not exposures at group of connected client (used for Large exposure purpose). CRR seems to require reporting the sum of exposures identified at individual counterparty (considered as shadow banking entities) level, thus conclusion held through Final EBA Q&R - 2013_492 only applies to reporting requirements in the context of Large exposure framework.

In addition, we would like to highlight the need to align the application reference dates between supervisory reporting and Pillar 3 disclosures. The timing of the publication of the draft ITS, including the implementation deadlines, should take this into account.

As the supervisory template C37.00 and its instructions are not yet available, we cannot provide substantive feedback. We recommend that the EBA defer finalizing the mapping tool until after the C37.00 template is released.

Additionally, we seek clarification on the timeline for releasing the C37.00 template and its accompanying instructions.

33. Do the respondents agree that the new template EU SB 1 and the related instructions fit the purpose and meet the requirements set out in the underlying regulation?

Please refer to question 32.

34. Are the amended template EU CR 10.5 and the related instructions clear to the respondents? If no, please motivate your response.

We welcome the simplification provided by the reduction of rows and columns and the end of the breakdown by subclasses of equity exposures that is not strictly provided by CRR3. 

Our concern would be an adequate phasing for equity exposures for IRB approach.

Moreover, as only one mapping is proposed regarding equity exposures, the question arises of the application of mapping for IRB equity exposures that are in the transitional phase. 

We expect some modification in the mapping tool proposal to taking into account phasing of IRB equity exposure (link with COREP C10 in addition of C07). 

Besides, following clarifications given at the public hearing, we would like the EBA to clarify in the instructions that the total amount of equity exposures subject to Article 133(3) to (6) and to Article 495a(3) of the CRR 3 is only required instead of amounts broken down by categories.

Finally, we advocate to apply the targeted template EU CR10.5 as soon as possible to benefit from the simplification provided by the new requirements without waiting to report the template with the reference date as of 31.12.2026.

35. Do the respondents agree that the amended template EU CR 10.5 and the related instructions fit the purpose and meet the requirements set out in the underlying regulation?

Please refer to question 34.

36. Do the respondents consider that the “mapping tool” appropriately reflects the mapping of the quantitative disclosure templates with supervisory reporting templates?

The current DPM is not updated to reflect the changes in the templates made in the consultation. For instance, template 3 still contains the 8 mandatory sectors as rows. However, the table has been modified and no longer includes mandatory rows (now focusing on sectors relevant to the institution). We request clarification that the DPM should be modified accordingly and should no longer include mandatory sectors as it does currently.

This inconsistency between the DPM structure and the revised table format needs to be addressed to ensure proper implementation and reporting.

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