Response to consultation on Implementing Technical Standards on amended disclosure requirements for ESG risks, equity exposures and aggregate exposure to shadow banking entities

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1. Do you have any comments on the proposed set of information for Large institutions?

Thank you for the opportunity to participate in the consultations  of the ITS document "Consultation paper on ITS on disclosures on ESG risks, equity exposures and the aggregate exposure to shadow banking entities".

In order to provide a clear understanding of the reporting included in ITS, we ask you to clarify the scope of semi-annual disclosures by large non-listed institutions. Our attention concerns the cooperative banking sector, including: associating banks and independent banks operating outside associations.

Our doubts concern the following provisions.

In paragraph 31, in Table 1 Overview of templates and tables for ESG,  the scope of information for large unlisted institutions is not presented, there is only a column – Large institutions. According to this table, Large institutions are to disclose all information required under Regulation 2024/3172 on an annual basis and some of it additionally semi-annually (templates 1, 2, 4 and 5).

The scope of information for large unlisted institutions is different than for listed ones. For unlisted persons it is based on Article 433a(2) of CRR:

"2. By way of derogation from paragraph 1, large institutions other than G-SIIs that are not listed institutions shall disclose the information set out below with the following frequency: 

  1. once a year, all information required to be disclosed under this Part;
    1. once every six months – the most important indicators referred to in Article 447."

 

Taking into account the above, as a chamber of commerce representing the cooperative banking sector, we see the need to:

  1. clarify the provisions in this regard, and additionally
  2. exempt from the obligation to report on ESG in semi-annual periods by associating banks and independent banks operating outside associations that are classified as large institutions not listed on the stock exchange.

 

In addition, we see the need to further reduce ESG reporting on an annual basis for associating banks and independent banks operating outside associations.

3. Do you have any comments on the simplified set of information proposed for SNCI and other non-listed institutions?

We see the need for further ESG reduction by small and uncomplicated institutions (SNCIs). The current requirements for local entities are too burdensome. We suggest resigning from the need to prepare Template 1A: Transition and physical risk for SNCI 

4. Do you have any comments on the proposed approach based on materiality principle to reduce the frequency (from semi-annual to annual) of specific templates (qualitative, template 3, and templates 6-10) for large listed institutions?

We see the need for an exemption from the obligation to report on ESG in semi-annual periods by associating banks and independent banks operating outside associations.

Name of the organization

KZBS