EBA updates Pillar 3 disclosure requirements on ESG risks and exposures

The European Banking Authority (EBA) has published its final draft Implementing Technical Standards (ITS) amending the Pillar 3 disclosure framework regarding environmental, social, and governance (ESG) risks.

The standards introduce disclosure requirements on equity and shadow banking exposures and align with the Capital Requirements Regulation (CRR 3). They aim to streamline existing requirements, improve usability, and ensure consistency, in line with the EU’s simplification agenda and the Omnibus package.

The ITS are aligned with the European Sustainability Reporting Standards (ESRS) and the EBA draft ITS on ESG reporting, which are currently under consultation. Stakeholders are encouraged to review both documents together for a comprehensive understanding of the ESG framework.

The standards facilitate interoperability with the ESRS under the Corporate Sustainability Reporting Directive (CSRD), enabling institutions to cross-reference disclosures and reduce duplication. The EBA will cooperate with the European Commission to strengthen alignment and support adoption.

The amendments extend ESG disclosure requirements to all institutions in a proportionate manner, with a ‘core plus’ approach for large institutions. Large institutions will disclose 37% fewer data points, medium institutions 17%, and small/non-complex institutions 84%. The EBA will pre-fill ESG data for SNCIs in the Pillar 3 Data Hub based on supervisory reporting.

The EBA will submit the final draft ITS to the European Commission for adoption, develop a Data Point Model (DPM), and publish an updated mapping tool in 2026. The standards are expected to apply with a reference date of December 31, 2026, for large institutions, and December 31, 2027, for SNCIs.

This publication supports the EBA’s broader initiative to simplify and enhance the efficiency of the EU prudential and supervisory framework, as outlined in its ‘Simplifying to strengthen’ campaign and related reports. It reflects the implementation of CRR 3 reforms, including disclosures on equity exposures, shadow banking, and ESG risks, and the repeal of previous non-performing and forborne exposures guidelines.