- Question ID
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2023_6821
- Legal act
- Regulation (EU) No 575/2013 (CRR)
- Topic
- Transparency and Pillar 3
- Article
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430
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Regulation (EU) 2022/2453 - ITS on ESG disclosures
- Article/Paragraph
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n.a.
- Type of submitter
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Credit institution
- Subject matter
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ESG P3 - NACE sector breakdown in Pilar III reporting (templates 1 and 5 and, partially 3)
- Question
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Should NACE activity codes be consistent between FINREP and Pilar III ESG reporting, or can P3 ESG templates breakdowns be adjusted to differ from FINREP but better align with sustainability linked info?
- Background on the question
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P3 Templates have been designed as a mix of financial information (being the key metric the GCA - Gross Carrying amount) and Sustainability-linked information (such as CCM, CCA, alignment metrics, etc.).
In some countries a company can only take part in those activities included in its founding statutes. Companies therefore tend to give themselves flexibility when selecting options, but then choose for statiscal purposes the one to be more relevant which is known as the statutory economic activity. This classifications can be extracted from public records (no expert judgement needed) and is unique for each of the individual companies that form part of a consolidated group, even the holding company has its own NACE.
Credit institutions distinguish between the statutory economic activity ( see previous explanation ) and the main economic activity. The 2nd is , generally, the result of an analysis of the different sectors, economic activies or the subsidiary that best represents the whole group. Therefore this classification relies on expert judgements by the bank´s personnel.
Both attributes are generally available in the bank´s systems. While the references to FINREP are clear and must be used the direct counterparty NACE (understood as statutary) other reports as Pilar III ESG also mention the direct counterparty NACE as well. However, for ESG Taxonomy criteria are not clear and we assume it has to be similar to Pilar 3.
To summarize the question is whether only a NACE must be used in all the reportings (i.e. NACE statutary) or both attributes should be used depending on the specific report.
As the goal of the information is for Pilar III & Taxonomy disclosures to be comparable across credit institutions, clear guidance would help participating institutions when fulfilling their regulatory obligations. Therefore to understand whether NACE Pilar III & Taxonomy must be the same or they could be different from the one used in FINREP in order to assurance the main activity for climate management (i.e. Paris Agreement, etc). - Submission date
- Rejected publishing date
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- Rationale for rejection
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This question has been rejected because the requirements in relation with the usage of NACE codes are specified in both Regulation (EU) 2021/2178 and in Regulation (EU) 2022/2453.
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- Status
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Rejected question