ESG reporting obligations

ESG reporting frameworks enable companies to disclose their sustainability and ethical performance. These frameworks provide a structured approach to evaluate ESG-related risks, opportunities, and impact. They promote transparency, accountability, and responsible business practices, covering factors like climate change, human rights, and diversity.

By using ESG frameworks, companies demonstrate their commitment to sustainable growth and provide stakeholders with a comprehensive view of their initiatives.  

ESG reporting involves publicly disclosing progress, metrics, objectives, and milestones in environmental sustainability, social issues, and corporate governance.

ESG reporting frameworks and standards are evolving and consolidating.

Here are some prominent frameworks: 

• IFRS Sustainability Disclosure Standards
  Developed by International Sustainability Standards Board (ISSB), the standards aim to create a common language for disclosing the effect of climate-related risks and opportunities on a company’s prospects. 
• GRI Standards
  Developed by the Global Reporting Initiative (GRI), the standards report on economic, environmental, and social impacts. 
• Task Force on Climate-related Financial Disclosures (TCFD)
  Established by the Financial Stability Board, it provides recommendations for climate-related financial risk disclosure. 
• BCBS Principles
  The Basel Committee on Banking Supervision (BCBS) has published principles for managing and supervising climate-related financial risks in the banking sector.

Regulatory overview and classification of Pillar 3 disclosures in the European sustainable finance regulation 

The EU has established four core frameworks for sustainable finance regulation.
These frameworks include: 

• EU Taxonomy
  This framework stands in the center of the regulation of sustainable finance and directs investments towards activities which are essential for the transition to a low-carbon economy, aligning with the objectives of the European Green Deal. 
• SFDR (Sustainable Finance Disclosure Regulation)
  SFDR requires financial market participants to disclose ESG information regarding their investment decisions and products, irrespective of their sustainability classification. 
• NFRD/CSRD (Non-Financial Reporting Directive/Corporate Sustainability Reporting Directive)
  These directives mandate companies to report on the environmental and social impacts of their activities and introduce audit requirements for reported information. NFRD will transition into CSRD from 2024. 
• EBA's updated Implementing Technical Standards (ITS) on Pillar 3 ESG Disclosures

  The European Banking Authority (EBA) has significantly revised its Implementing Technical Standards (ITS) for Pillar 3 disclosures on ESG risks, establishing a more streamlined and proportionate framework set to apply from 31 December 2026. Key updates include extending the disclosure requirements to all EU credit institutions, not just large banks, based on their size and complexity. The new ITS simplifies the reporting process by removing duplicative templates, such as those for the Green Asset Ratio (GAR), to better align with other EU sustainability regulations.

  On 12 October 2026, the EBA released the final technical package for Reporting Framework 4.4 Phase 1. This package includes the Data Point Model (DPM) and XBRL taxonomy needed to submit the updated Pillar 3 ESG disclosures to the Pillar 3 Data Hub. Institutions should prepare for a first Pillar 3 ESG disclosure reference date of 31 December 2026.

  In addition, new ESG supervisory reporting, including the integration of stress-test data, is planned for Reporting Framework 4.4 Phase 2, with an expected first reference date of September 2027.