Response to discussion on Technical Advice on selected KPIs under the Taxonomy Disclosures Delegated Act under Article 8 of the Taxonomy Regulation
Q1. Please identify your organisation (if applicable) and indicate the capacity in which you are responding to this consultation:
d. other (please specify)Other (please specify)
Assurance providerQ2. Do you agree with the analysis presented?
Yes
In your response, where applicable, please assess whether voluntary disclosure of this KPI would be meaningful and feasible, and hence should be considered.
We agree that the case for the disclosure of the Fees and Commissions KPI has not been established. In our view, it is not a key indicator of a credit institution’s exposure to or support for environmentally sustainable activities.
Fees and commissions arise from a wide range of services, and the link to the Taxonomy alignment of the underlying economic activities is often indirect. As a result, the KPI may provide limited insight while relying on significant assumptions and potentially incomplete data.
In addition, the revised methodology is likely to require complex and resource-intensive processes, raising concerns about proportionality and whether the implementation effort is justified by the usefulness of the KPI. We therefore support removing the KPI and believe this should be done without introducing qualitative disclosures considering the 10% materiality threshold.
Q4. Should additional items from FINREP Template 22.1 also be included in the revised KPI? Please consider in particular that (i) have been assessed as unrelated to capital market activities, e.g. ‘custody and other related services’, and (ii) those that have not been mapped to the Fees and Commissions KPI, such as ‘structured finance’, ‘loans granted’, ‘commodities’.
See response to Q3.
Q5. Do you have evidence and/or arguments on potential costs and benefits associated with disclosing the Fees and Commissions KPI?
N/A
Q6.Do you agree with the analysis presented?
Yes
In your response, where applicable, please assess whether voluntary disclosure of this KPI would be meaningful and feasible, and hence should be considered.
As the trading book is characterised by short-term positions, we see this KPI as offering no meaningful insights into an institution’s long-term strategy on Taxonomy relevant exposure. In our view, assessing sustainability over such short time horizons is of limited effectiveness. As a result, the KPI is not justified from a cost-benefit perspective, given the effort required to calculate and disclose it compared to the value of the information provided. We therefore consider that the option to replace the Trading book KPI with qualitative disclosure requirements relating to the trading portfolio is appropriate. In addition, clarification is needed regarding the type of qualitative information that should be disclosed regarding the trading portfolios’ alignment with the Taxonomy Regulation.
Q8. Do you have evidence and/or arguments on potential costs and benefits associated with disclosing the Trading Book KPI?
N/A
Q9. Do you agree with the analysis presented and the conclusion to narrow down the investment firms’ KPI?
The wide range of investment services offered by providers makes it difficult to establish a KPI that is both practical to implement and meaningful for market participants. A single metric applied across many diverse services is unlikely to produce comparable or decision-useful information. Furthermore, any assessment of Taxonomy alignment would often rely on client-specific data that may not be available to firms.
We therefore recommend removing this KPI unless its scope could be narrowed and its usefulness clearly evidenced. If disclosures on investment services are considered necessary, they would be better addressed through targeted narrative reporting or service-specific indicators.
Please explain if you think that other services, e.g. execution of orders on behalf of clients, should be included in the revised KPI.
See response to Q9.
Q11. Do you consider it more appropriate for the KPI to reflect the value of assets covered by the investment services rather than the monetary benefits generated?
N/A
Q12. Do you agree with the analysis presented and the conclusion to align the grandfathering rules with the approach set out in EU Green Bond Regulation?
N/A
Q13. Do you agree with the analysis presented and proposed conclusions?
We support the ESAs’ objective of simplifying Taxonomy reporting for groups and improving the consistency of disclosures across different group structures. However, we believe that the revised Disclosures Delegated Act should continue to be firmly rooted in established consolidation principles, and avoid introducing additional reporting layers that are significantly costly to prepare yet provide limited decision-useful information, with the same approach applicable to both EU and non-EU groups. The framework should provide greater clarity regarding the appropriate level of consolidation at which Taxonomy disclosures are expected to be prepared.
Beyond these general considerations, we believe that further clarification is required for groups operating across different sectors or combining financial and non-financial activities, particularly regarding the appropriate level of consolidation for Taxonomy reporting. In addition, the revised framework should avoid creating unnecessary differences between prudential, accounting and sustainability reporting perimeters.
In this context, we agree with the ESAs’ proposal to remove the weighted average KPI. Combining Taxonomy KPIs that are derived using different calculation methodologies does not result in relevant, reliable or comparable information and may instead create KPIs that are difficult for users of the disclosures to understand and interpret.
Furthermore, we do not support the proposed 10% materiality threshold in the context of subsidiary-level disclosures. In our view, introducing such a threshold risks creating additional reporting layers and reintroducing disclosure obligations that are difficult to reconcile with established exemption principles. Rather than introducing additional materiality concepts for specific aspects of the framework, we believe instead that the EU Taxonomy should incorporate and place at its centre the application of a robust and transparent materiality assessment at group level.
Overall, we strongly believe that greater clarity regarding the appropriate level of consolidation, the treatment of mixed groups and the interaction with existing exemption regimes would significantly enhance the consistency and usability of Taxonomy disclosures while reducing implementation burden.
i. Should the KPI disclosed by the parent undertaking, reflecting the group’s main or prevalent activity, be used? If not, what alternative methodology should be applied?
N/A
ii. In the case of a credit institution-led group, such as a financial conglomerate, should the consolidated KPI disclosed by the parent undertaking also incorporate the assets of the insurance (and non-financial) undertaking, rather than accounting for the insurance (and non-financial) undertaking solely through the equity method? Please justify your answer in terms of feasibility, usability and transparency of sustainability information.
N/A
Q15. Which KPIs you do think are necessary and should be required for groups with mixed activities where the credit institution is the parent company such as credit institution-led financial conglomerates, credit institution-led financial holding companies and relevant mixed financial holding companies?
N/A
Q16. Do you agree with the analysis presented and the conclusion that OpEx financing should not be explicitly incorporated in the methodology for calculating financial undertakings’ KPIs? Please provide your rationale for supporting the explicit inclusion of provisions allowing financial undertakings, on a voluntary basis, to use the OpEx KPI disclosed by their counterparties when calculating their own KPIs.
We do not believe that extending, refining or otherwise promoting the use of the OpEx KPI for financial institutions would provide meaningful benefits to users of the Taxonomy reporting, even on a voluntary basis.
Turnover and CapEx KPIs are most used by financial institutions currently, as they provide information on existing sustainable activities and transition-related investments. By contrast, the OpEx KPI provides limited additional insight and does not appear to be actively used by market participants in practice. As a result, the availability and comparability of the underlying information may be more limited than for the Turnover KPI and the CapEx KPI.
Moreover, financial institutions generally have limited ability to influence counterparties’ operational expenditure. As a consequence, introducing additional reporting requirements relating to OpEx would increase complexity without generating a commensurate increase in decision-useful information.
For these reasons, we believe that any future revisions of Taxonomy KPIs related to the financial sector should prioritise simplification rather than expansion and therefore, we do not support the introduction of voluntary use of OpEx by financial undertakings.
Q17. Should the credit institution’s AuM KPI (Annex V) and the KPI for asset managers (Annex II) be merged? Please explain why and how, including the content of the information that should be retained in a potential merged KPI.
N/A
Q18. What are your views on the design of off-balance sheet item reflecting financial guarantees to financial and non-financial undertakings in a potential merging of the asset management activities as presented?
N/A
Q19. Do you have any additional comments or suggestions to improve, simplify or clarify the disclosure requirements within the scope of this Call for Advice, including through redrafting of instructions, and clarification of definitions, or the streamlining of terminology?
Overarching materiality principle
We strongly support the introduction of an overarching materiality principle applicable to Taxonomy reporting.
Such a principle should apply to eligibility assessments, alignment assessments and reporting requirements as a whole. It should allow undertakings to consider both quantitative and qualitative factors and should not rely on fixed thresholds. This approach would be consistent with established financial reporting practices and would support more decision-useful disclosures while reducing unnecessary reporting effort.
Legal uncertainty arising from FAQs
We believe that interpretative positions should not be established through non-binding FAQs when they effectively change reporting obligations, introduce additional reporting layers or create new operational expectations. A further complication is that in the past, new FAQs have been issued without rescinding existing ones on a similar matter. Such approaches can create legal uncertainty and contribute to diverging practice among preparers, users and assurance providers.
Where substantive interpretative matters are identified, they should be addressed through formal legislative instruments following appropriate consultation and due process. Clear requirements remain one of the most important preconditions for reducing the reporting burden. Simplification should therefore focus not only on reducing disclosure requirements but also on improving clarity and legal certainty. As a result, we strongly recommend the need for a review of the existing FAQs to assess those that should be revised, withdrawn, or incorporated into the regulation, including in consideration of recent and forthcoming regulatory changes.
Need for sufficient implementation time
We emphasise the importance of providing undertakings with sufficient implementation time for revised Taxonomy reporting requirements as an essential aspect of a robust due process. Changes to reporting obligations have direct implications across multiple functions within an organisation. It is therefore essential that any amendments are accompanied by adequate lead time between finalisation and mandatory application. Sufficient implementation time helps to ensure that undertakings can appropriately embed new requirements, maintain the quality and consistency of reported information and avoid unnecessary operational disruption. This is particularly important when legislative proposals remain subject to a scrutiny period, when preparers should be provided with certainty on the final requirements before being expected to apply them in practice.