ESBG remains committed to ensuring a clear and effective regulatory framework. In line with this commitment, ESBG has responded to the recent Commission consultation on developing or revising technical screening criteria for a given economic activity of the EU Taxonomy.

The Commission, seeking insights from stakeholders, opened discussions on the potential development or revision of technical screening criteria for specific economic activities within the EU Taxonomy. ESBG has seized this opportunity to contribute perspectives and emphasize key points relevant to the evolving financial landscape.

One primary concern highlighted by ESBG pertains to the lack of clear guidance and specifications in the Disclosures Delegated Act (Commission Delegated Regulation (EU) 2021/2178 and its subsequent amendments). This deficiency is causing financial undertakings:

Legal Uncertainty and Implementation Effort: The absence of clear guidance is leading to legal uncertainty and unnecessary implementation efforts.

Lack of Comparability: The current state of the Taxonomy templates in Annex V and XII results in a lack of comparability in the disclosed Taxonomy information.

To address these issues, ESBG recommends the publication of:

Formulas and Validation Rules: Clear formulas for calculating each datapoint of the quantitative templates and validation rules.

Guidance Documents: A minimum set of guidance documents, akin to the approach taken by the European Banking Authority (EBA) for FINREP and COREP reporting.

ESBG emphasizes that the publication of templates, validation rules, arithmetic calculations, and relationships between datapoints is crucial for the utility of financial undertakings.

ESBG also draws attention to the issue of legal fragmentation concerning Green Asset Ratio (GAR) Key Performance Indicators (KPIs). These KPIs are being developed by two different regulators: the European Commission (management report) and the EBA (Pillar 3 report). This situation introduces overlaps, inconsistencies, and coordination challenges between two sets of reporting requirements that, in essence, should be identical. ESBG stresses the need for enhanced coordination and consistency to streamline reporting obligations for financial institutions.

In addition to regulatory concerns, ESBG highlights challenges faced by banks in financing projects related to sectors such as water. Clients in these sectors often encounter difficulties, including a lack of information on energy consumption and the inability to calculate certain impact metrics. These challenges hinder clients from financing themselves under the Taxonomy umbrella. ESBG encourages further guidance and support in addressing these issues to facilitate smoother financing processes.