Publication date: 9 June 2020
EBF responded to the European Commission consultation on the Review of the Non-Financial Reporting Directive (NFRD).
- Regulation instead of Directive
- Consistency of disclosure requirements across EU legislation (alignment with EU Taxonomy Regulation, Disclosure Regulation, CRR2 Pillar 3 requirements, June 2019 EC Non-Binding Guidelines on Climate Reporting, ECB guidance) and as much as possible and appropriate in the EU context with widely adopted frameworks
What data is needed and for what purposes?
- Banks need robust, comparable and reliable data
- To identify and assess sustainability risks in lending activities
- To comply with the new disclosure obligations
- To steer portfolios towards the objectives PA and EGD
Who should report?
- All listed companies given the application of the taxonomy to all financial investments in the capital/financial market
- All large companies. The criteria for banks should be modified to include banks with more than 250 employees and more than 5 billion in total assets.
- Companies from sectors with a high transition risk (for example mining, carbon, smaller utilities ….for material risks (e.g. climate only), regardless of the size of the
- All remaining companies based on a simplified minimum reporting framework taking into account materiality, proportionality in a structured manner and possible gradual implementation (sectors with high risks first).
What should be reported?
- More detailed requirements on environmental matters
- Clear link to taxonomy (Harmonized data collection with a clear nomenclature to allow automatization; data collection templates for each economic activity)
- Standardized scenario analysis following TCFD for large companies in polluting sectors
- Alignment of strategies with 2 degrees
- Number of Key KPIs aligned with the disclosure requirements that will be specified in the Delegated Act of the Taxonomy Regulation
- Gradually, associated revenues and expenses of eligible products or activities and the associated sustainable assets (both as a percentage of the total).
- Greater focus on information and data related to societal aspects
- Governance issues as in TCFD
Need for EU central data register to facilitate disclosure
- EU to adopt strategic infrastructure project in the context of European Green Deal dataspace
- EU to build or supports, based on existing solutions and infrastructure, a central European ESG data register that would:
- Collect periodically, with the help of new reading technologies, existing climate change mitigation and adaptation data of companies under the NFRD.
- Collect other available relevant information, ESG metrics and relevant data points
- Interconnect the relevant EU and MS databases collecting ESG information (government, CB, statistical bodies)
- Enable to upload information to the register on a voluntary basis
- Data to be provided to users of non-financial information for free or at reasonable cost
European Banking Federation
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The federation 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.
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