Public consultation by ESMA until 12 August 2026 on simplifying EU Taxonomy disclosure framework
Executive Summary
ESMA has launched a public consultation (via CSSF notification) on its technical advice to the European Commission for simplifying the EU Taxonomy disclosure framework, focusing on selected KPIs under the Taxonomy Disclosures Delegated Act and reducing reporting burdens. This matters for compliance teams because it is the first formal step in the review of Article 8 Taxonomy disclosure KPIs that will likely change how financial and non‑financial undertakings calculate and disclose Taxonomy‑related indicators from around Q3 2027.
What Changed
- - ESMA is consulting on technical advice to the European Commission specifically targeting selected KPIs under the Taxonomy Disclosures Delegated Act (Article 8 of the Taxonomy Regulation), including operational expenditure (OpEx) KPIs for non‑financ
- The stated policy objective is simplification of the EU Taxonomy disclosure framework while preserving decision‑useful information for investors and supervisors.
- ESMA aims to reduce reporting burdens for market participants, notably corporates and financial institutions subject to Taxonomy Article 8 disclosures.
- The consultation covers selected KPIs under the Taxonomy Disclosures Delegated Act, with the European Commission having requested focused advice on: OpEx KPI of non‑financial firms; Commissions and Fees KPI and Trading Book KPI for credit institution
- ESMA is proposing more pragmatic approaches to group‑level reporting for mixed groups, including reporting at parent‑undertaking level to reduce complexity for conglomerates.
- ESMA’s work is part of a coordinated ESA package, with EBA and EIOPA conducting parallel consultations on Taxonomy disclosures within their respective remits and common horizontal topics.
Suggested Considerations
- Conduct an internal impact assessment of current Taxonomy Article 8 KPI calculation and reporting processes, focusing on OpEx, Commissions and Fees, Trading Book, and Underwriting KPIs, to identify pain points and simplification priorities.
- Prepare and submit a response to ESMA’s consultation by 12 August 2026, either directly or via industry associations, articulating specific operational, data, and system challenges and concrete proposals for simplification.
- Register for and attend ESMA’s public hearing on 22 July 2026 to understand the detailed proposals, ask clarifying questions, and align internal positions ahead of submission.
- Coordinate with regulatory affairs, sustainability, risk, and finance functions to develop a unified institutional position on the desired design of revised KPIs and group‑level reporting under the Taxonomy Disclosures Delegated Act.
- Map dependencies between Taxonomy Article 8 data and other ESG reporting (including SFDR product disclosures and CSRD/ESRS reporting) to anticipate how changes to KPIs may affect cross‑framework consistency and data architecture.
- Monitor parallel consultations by EBA and EIOPA on Taxonomy disclosures to ensure that banking and insurance entities provide coherent feedback across all ESA processes.
Key Dates
Compliance Impact
In the short term, non‑participation in the consultation does not create direct non‑compliance risk but may leave firms exposed to a revised framework that does not reflect their operational realities. In the medium term (Q3 2027 onward), failure to implement the revised Taxonomy KPIs and disclosure rules will create material regulatory, supervisory, and reputational risk, given the central role o
Who is Affected
References
AI-generated analysis. May contain errors or omissions — verify with the original CSSF source before acting. Full disclaimer.
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