EBF CONSULTATION RESPONSE
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EBF Calls for Pragmatic Simplification of European Sustainability Reporting Standards

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BRUSSELS, 6 May 2025  – The European Banking Federation (EBF) has submitted its detailed response to EFRAG’s consultation on the simplification of Set 1 of the European Sustainability Reporting Standards (ESRS). In its response, the EBF emphasizes the need for a pragmatic, principles-based approach that ensures meaningful sustainability reporting without imposing disproportionate burdens on preparers, especially within the banking sector.

The EBF’s key recommendations include:

• Practical over aspirational: Focus on mature topics with established methodologies and decision-useful data points
• Cost and effort consideration: Incorporate the “undue cost or effort” principle applied by the ISSB
• Principles-based flexibility: Allow preparers to determine what information is disclosed and how it is structured, within a clear reporting framework
• Simplification of materiality:
  – Streamline materiality assessments to focus only on topics relevant to company strategy, business models, and activities
  – Prioritize information materiality to ensure only relevant data is disclosed
  – Remove data points that no longer serve a clear materiality purpose
• Clarity and comparability: Strike a balance between principles-based flexibility and the need for consistency across disclosures
• Structural simplification: Eliminate duplications within and across standards, and align with other regulations such as Pillar 3 and annual reporting requirements
• Aggregation and alignment:
  – Allow disclosures at the key sustainability topic level (e.g. Climate, Environment)
  – Align consolidation scope with financial reporting to avoid subsidiary stand-alone reporting obligations
  – Specify that disclosures are not required if data is unreliable or no common methodologies exist

Sector-Specific Recommendations for Financial Institutions
The EBF also highlights banking-specific considerations:

• Cap the value chain for Double Materiality Assessment to tier one CSRD entities only
• Align methodologies, time frames, and definitions for materiality assessments with regulatory requirements and allow residual risk approaches
• Align time horizons and topic aggregation with standard banking practices
• Exempt banks from reporting data points irrelevant to the banking sector
• Foster close collaboration between EFRAG, EBA, the European Commission, and other stakeholders to ensure methodological alignment with related EU legislation, including SFDR and EBA supervisory requirements, avoiding duplicative reporting

The EBF stands ready to continue its active engagement with regulators and standard-setters to ensure the ESRS remains clear, relevant, and proportionate, ultimately supporting sustainable finance and transparency without compromising operational feasibility for banks.

For more information please contact:

Denisa Avermaete, Head of Sustainable Finance, D.Avermaete@ebf.eu

About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.