EBA calls for time limits on sustainability reporting standard reliefs
The European Banking Authority (EBA) today published an Opinion to the European Commission on the draft amended European Sustainability Reporting Standards (ESRS). The EBA welcomes simplification efforts but highlights concerns regarding the permanent nature of certain reliefs.
Streamlining vs. substance
The EBA welcomes the progress made by the European Financial Reporting Advisory Group (EFRAG) in streamlining and clarifying the initial ESRS, supporting efforts to reduce reporting compliance costs.
However, the EBA calls for institutions to continue analyzing sustainability-related risks and recommends time-limits for alleviations in several areas.
The Opinion focuses on concerns related to proposed permanent reliefs, which could significantly reduce the quantitative information reported by undertakings.
This reduction risks contradicting the Commission's objective to prioritize quantitative data and may shift the burden onto information users, including banks, who would need to seek data bilaterally.
Granting such reliefs without adequate time-limits could also undermine interoperability with international sustainability standards.
A mandate for simplification
This Opinion is based on Article 16a(4) of the EBA founding regulation, which mandates the EBA to issue opinions as requested by the European Commission.
Additionally, Article 49(3b) of the Accounting Directive, as amended by the Corporate Sustainability Reporting Directive (CSRD), sets conditions for the Commission's adoption of delegated acts on the ESRS, including the need to request opinions from authorities like the EBA.
In 2025, the European Commission tasked EFRAG with simplifying the ESRS 'Set 1' delegated act by November 2025. EFRAG completed this exercise and published the draft amended ESRS on December 3, 2025, following a public consultation.
The Commission also requested opinions from the European Securities and Markets Authority (ESMA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Central Bank (ECB).
Simplification with a cost
The EBA's opinion highlights a critical tension between reducing reporting burden and maintaining data quality for sustainability risks.
While simplification is welcome, permanent reliefs risk undermining the very purpose of transparent reporting and shifting analytical effort.
This could ultimately hinder effective risk management and supervisory oversight, especially for financial institutions relying on this data.