EBA Pillar 3 Disclosures

The European Banking Authority’s (EBA), ESG Pillar 3 disclosure rules became effective for large Tier 1 financial insititutions at the end of 2022, necessitating that banks disclose diverse ESG-related data using XBRL for regulatory reporting.

Starting in 2025, with the implementation of Capital Requirements Regulation 3 (CCR 3), EBA Pillar 3 disclosures regarding ESG risks will be applicable to all banks operating in the EU, irrispective of their size.

Within the framework of EBA Pillar 3 disclosures concerning ESG risks for EU banks, impacted entities are mandated to disclose their operations in connection with various potential ESG related risk categories. These encompass:

• Qualitative details regarding the integration of ESG considerations into governance, strategic planning, business models, and risk management frameworks.

• Actions taken by institutions to assist their counterparties in transitioning to a carbon neutral economy and adapting to climate change.

• Risks associated with climate change related transition and physical impacts.

• Key Performance Indicators (KPIs) related to institutions’ asset financing activities that align with the EU green taxonomy, including the Green Asset Ratio and BTAR.

• Access EBA Summary of ESG Disclosures - Pillar 3 (https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Consultations/2021/Consultation%20on%20draft%20ITS%20on%20Pillar%20disclosures%20on%20ESG%20risk/963625/Infographic%20-%20Summary%20of%20ESG%20disclosures%20Pillar%203.png)

To facilitate a smoother transition to the new regime, the EBA implemented proportionality measures, including a phased implementation period spanning 2023 to 2025, which should aid institutions in making their required disclosures.

The European Single Access Point (ESAP) Platform

The updated plan encompasses the reporting of the entire set of Pillar 3 disclosures in XBRL format, extending beyond solely ESG-related data. This data will be utilised to populate EUCLID (the European Centralised Infrastructure of Data) and the EBA’s Pillar 3 hub project, which will subsequently contribute to the development of the European Single Access Point (ESAP).

The EU sees the ESAP platform as having significant potential to aid banks in gathering a substantial portion of ESG data pertaining to their counterparties. This data can then be utilised for reporting EBA ESG Pillar 3 templates and for various internal purposes.

ESAP strives to serve a comprehensive platform, providing open access to financial and sustainability –related data disclosed by EU companies and listing EU investment products in accordance with relevant European directives and regulations. Its purpose is to contribute to the overarching goals of the European Green Deal Initiative.