Bank sustainability reporting was supposed to make capital flow toward cleaner activities. Four years into the exercise, supervisors are asking a blunter question about whether anyone actually reads the numbers.
The European Banking Authority closed its consultation on Taxonomy key performance indicators on 12 August, ending six weeks of comment on a discussion paper that opened on 1 July. The paper examines the Disclosures Delegated Act, the instrument that tells credit institutions and investment firms exactly what sustainability figures they must publish under Article 8 of the Taxonomy Regulation. The authority framed the exercise around usability, which in regulatory language means the current disclosures are not delivering.
Four issues dominate the paper. The first concerns the ‘other services’ indicator that investment firms report, a catch-all that produces figures firms struggle to explain and analysts struggle to compare. The second addresses grandfathering rules for financial instruments and whether they should align with the European Green Bond Regulation, which uses a different vocabulary for broadly similar assets. The third tackles group-level reporting, where subsidiaries and parents produce numbers that do not reconcile. The fourth deals with how banks treat the operating expenditure indicator that non-financial companies publish, a technical point with large consequences for any lender computing a green asset ratio.
None of this arrived by accident. The Commission sent the European supervisory authorities a targeted call for technical advice in March, and the responses will feed a review of the Delegated Act that forms part of the wider omnibus simplification agenda. Brussels has spent the past eighteen months trimming reporting obligations it introduced with considerable enthusiasm in the previous mandate, and taxonomy disclosure now sits firmly on that list.
Smaller institutions have a parallel process running. The EBA proposed that it should calculate and publish Pillar 3 disclosures on behalf of small and non-complex institutions, using supervisory data those banks already submit, rather than making each one build its own reporting chain. Comments closed on 20 July. If the approach survives, several thousand smaller lenders stop producing a document nobody outside their compliance department reads, and the authority produces one comparable dataset instead.
That model depends on infrastructure that only recently started working. The Pillar 3 data hub went live on 26 January after a transition that began in mid-2025, and it now serves as the single point where large institutions file prudential disclosures. Centralisation makes comparison possible for the first time. It also concentrates operational risk in one place, and the authority carries responsibility for uptime that used to sit with hundreds of individual banks.
Simplification cuts both ways, and the sustainability lobby has noticed. Every indicator the EBA drops removes a data point somebody uses to track whether banks fund the transition they describe in their annual reports. Every indicator it keeps imposes a cost that falls hardest on institutions with the smallest compliance teams. The authority cannot satisfy both constituencies, and the discussion paper does not pretend otherwise.
What follows is technical advice to the Commission, then a revised Delegated Act, then implementation dates that banks will spend another year preparing for. The direction looks settled. Europe will ask its banks for fewer sustainability numbers, and it will try to make the survivors mean something.
