EBA Revises ESG Disclosure Requirements for Banks Under Pillar 3

The EBA is simplifying ESG risk disclosure requirements for European banks, reducing reporting obligations for larger institutions while extending disclosure requirements to a wider range of banks.

On 12 October 2026, the European Banking Authority (EBA) published Reporting Framework 4.4, an updated technical framework supporting banks' regulatory reporting and public disclosures, including information on environmental, social and governance (ESG) risks.

The October update follows the final draft Implementing Technical Standards (ITS) published by the EBA in June 2026, which aim to simplify ESG risk disclosures under Pillar 3 while extending the requirements to a wider range of banks. The June document sets out the proposed changes, while the October release provides the technical specifications needed to implement them.

What is Changing in ESG Risk Disclosures?

Pillar 3 is part of the EU banking regulatory framework. It requires banks to publicly disclose information about their financial risks, capital adequacy and risk management, helping investors and other stakeholders assess their financial stability.

These disclosures also cover ESG risks, including how environmental, social and governance factors may affect a bank's financial position. For example, climate-related risks may affect borrowers' ability to repay loans or reduce the value of assets used as collateral.

The revised Pillar 3 requirements introduce a more proportionate approach to ESG risk disclosures, taking into account the size and complexity of banks. Larger institutions would continue to provide more detailed information, while smaller banks would face simplified disclosure requirements.

One of the main changes is a reduction in the amount of information that large banks must disclose. Under the proposed amendments, large institutions would report approximately 37% fewer ESG-related data points, reducing the total from 2,614 to 1,648.

The revised requirements would also remove several existing disclosures, including:

• Disclosures related to the Green Asset Ratio (GAR) and Banking Book Taxonomy Alignment Ratio (BTAR), which assess the alignment of banks' activities and financial exposures with the EU Taxonomy.
• The requirement to disclose banks' exposures to the 20 most carbon-intensive firms.

These changes are intended to reduce reporting complexity and avoid duplication with other EU sustainability disclosure requirements. Banks would still need to report relevant ESG risks, but the amount and detail of information required would depend more closely on their size and characteristics.

What is Reporting Framework 4.4?

Reporting Framework 4.4 is an updated version of the EBA's technical framework for banking reporting and public disclosures. It provides the templates, data definitions and technical specifications that support consistent reporting across European banks.

The version published on 12 October 2026 includes updates to support the revised Pillar 3 ESG disclosure requirements outlined in the June draft Implementing Technical Standards (ITS).

These include changes to the Data Point Model (DPM) and XBRL taxonomies, which standardise how reporting information is organised and exchanged. They support the consistent preparation and comparison of information disclosed by different banks.

Reporting Framework 4.4 also covers other areas of banking reporting, including changes related to IFRS 18 (the accounting standard on presentation and disclosure in financial statements).

When Will the Revised Requirements Apply?

The amended Pillar 3 disclosure requirements are expected to apply from the reporting reference date of 31 December 2026.

For small and non-complex institutions (SNCIs), the proposed first reference date is 31 December 2027. These institutions would also benefit from simplified requirements limited to quantitative ESG risk disclosures.

The revised ITS published in June 2026 were submitted to the European Commission for adoption. Their application remains subject to the completion of the regulatory adoption process.

The changes would therefore affect banks differently. Larger institutions would benefit from fewer disclosure requirements, while banks newly brought within the scope of Pillar 3 ESG disclosures would need to prepare for their first reporting obligations.