Background
2024 marked the publication of the new EU banking package, which includes in particular Regulation (EU) 2024/1623 of the European Parliament and of the Council amending Regulation (EU) No 575/2013, known as CRR 3, as well as Commission Implementing Regulation (EU) 2024/3172 laying down the details of the CRR Pillar 3 disclosures framework.
As part of the second step in the European Banking Authority's (EBA) "Roadmap on Strengthening the Prudential Framework", on 22 May 2025, the EBA published a consultation paper relating to its proposed draft implementation technical standards (ITS) amending the CRR Pillar 3 disclosures framework to incorporate the CRR 3 requirements on ESG-related risks, equity exposures and aggregate exposure to shadow banking.
In line with the EU Commission's Omnibus package, which aims to reduce reporting costs and simplify sustainability reporting, the draft ITS suggest a proportionate approach to ESG disclosures, based on the institution's type, size and complexity, with simplified disclosures for smaller or non-listed banks.
Key proposals
The proposed amendments to the CRR Pillar 3 disclosures rules aim to enhance transparency and consistency of disclosures, while simplifying the reporting process for institutions. The proposal covers streamlined new requirements for shadow banking and equity exposures and clarifies the application of the guidelines on non-performing exposures and forbearance.
As far as ESG risk disclosures are concerned, the main proposals include:
- a simplified approach to disclosures with only essential information depending on the size and complexity of institutions: the EBA proposes a tailored approach, offering a different set of templates based on institution type;
- no new requirements but greater clarity on the disclosures of large institutions, notably via improved templates for both transition risks (e.g. carbon-intensive exposures) and physical risks (e.g. climate-related natural disasters);
- a simplified reporting process by introducing materiality considerations regarding the frequency of some of the disclosures;
- full alignment of the CRR Pillar 3 disclosures with the Taxonomy Regulation: the EBA seeks to ensure that the CRR Pillar 3 disclosure templates are directly linked to the Taxonomy Regulation, thereby ensuring that the information to be disclosed is identical under both frameworks and avoiding the need for amendments to the existing texts;
- an extended timeframe and transitional provisions for gradual ESG disclosure adoption: to address timing uncertainties due to ongoing consultations on related legislative proposals, the EBA proposes a phased approach for the implementation of the draft ITS;
- flexibility during the interim period: the EBA recommends that competent authorities allow some flexibility to institutions if they choose to apply the transition rules.
The consultation paper further specifies that:
- large listed banks will continue to apply the current rules until the end of 2026, except for certain reports related to the Green Asset Ratio (GAR) and the Taxonomy Regulation, for which disclosure is proposed to be suspended until that date;
- institutions newly brought into scope under CRR 3 because of the introduction of the new disclosure obligations on ESG risks in Articles 433b and 433c will begin applying the new ITS from the end of 2026.
Next steps
The consultation on the proposed draft ITS is open for a three-month period (i.e. until 22 August 2025). All contributions received will be published after the consultation closes, unless requested otherwise. The EBA will assess the feedback received during the public consultation before submitting the final draft ITS to the EU Commission.
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