EBA and ECB urge caution on proposed ESRS amendments
Two of Europe’s key financial authorities have weighed in on proposed changes to the European Sustainability Reporting Standards (ESRS), welcoming simplification but warning against any loss of substance.
The European Banking Authority (EBA), in an Opinion addressed to the European Commission, recognises progress in streamlining the draft amended standards developed by EFRAG. However, it raises concerns about the permanent nature of certain reliefs and calls for time limits in several areas. The EBA cautions that the cumulative effect of the proposed alleviations could significantly reduce quantitative disclosures, shift the burden onto users such as banks, and weaken interoperability with international standards.
The European Central Bank (ECB) echoes these concerns in its staff opinion. While welcoming simplification and efforts to enhance interoperability, the ECB warns that wide-ranging permanent reliefs and extended phase-ins risk creating “blind spots” in areas such as climate and biodiversity reporting. It recommends time limits on key reliefs, safeguards to preserve fair presentation, and stronger protections for value chain disclosures — particularly for banks, whose sustainability risks are concentrated in their financed activities.
Both authorities stress that, with the revised Corporate Sustainability Reporting Directive (CSRD) now focused on the largest companies, proportionality arguments for extensive reliefs are less compelling. The debate goes to the heart of digital sustainability reporting: too much voluntary reporting, or prolonged data gaps can weaken the consistency and comparability that structured digital sustainability reporting is designed to support. Stable, comparable, and decision-useful standards for meaningful data collection remain essential for a reliable European sustainability data ecosystem.
