EBA publishes Pillar 3 disclosure requirements on ESG risks

The European Banking Authority (EBA) has finalized amendments to the Pillar 3 ESG disclosure framework under CRR3, extending ESG disclosure requirements beyond large listed banks and introducing a more proportionate approach based on the size and complexity of institutions.

Key Changes for ESG Disclosure Reporting

✅ ESG disclosures will apply to all institutions
Under CRR3, ESG risk disclosures are no longer limited to large listed banks. Large non-listed institutions, large subsidiaries and Small and Non-Complex Institutions (SNCIs) will also fall within scope, although disclosure requirements will differ depending on the institution’s profile.

✅ Proportionality is at the centre of the new framework
The EBA has introduced simplified ESG disclosure requirements for smaller and less complex institutions. While large institutions will continue to provide comprehensive climate and ESG disclosures, SNCIs and other non-listed institutions will disclose a reduced set of key ESG indicators and qualitative information.

✅ Updated ESG templates
The revised framework updates the existing ESG templates and instructions, including:

Climate transition risk disclosures
Climate physical risk disclosures
Information on financed emissions and carbon-intensive sectors
ESG risk management and governance disclosures
Alignment with updated NACE 2.1 classifications
Streamlined reporting requirements to reduce operational burden and improve comparability across institutions.

✅ Transitional measures and supervisory flexibility
To facilitate implementation, the EBA has introduced transitional provisions and encourages supervisory flexibility during the initial application period.

What Does This Mean for Banks?

Large institutions will continue to provide detailed ESG risk disclosures across the full suite of Pillar 3 ESG templates.

Large non-listed banks and subsidiaries will become subject to ESG disclosure requirements for the first time, although some requirements are simplified.

Small and Non-Complex Institutions (SNCIs) will use a significantly reduced disclosure package focused on the most relevant ESG risk indicators and qualitative information.

Why It Matters?

The revised framework is expected to apply from 31 December 2026 reporting date and represents a significant expansion of ESG Pillar 3 disclosures across the European banking sector. Banks should assess their ESG data availability, reporting processes, governance arrangements and climate risk methodologies well ahead of the first reporting cycle.