The European Banking Authority (EBA) has introduced proposals to significantly simplify ESG supervisory reporting requirements for banks, aiming to reduce complexity while maintaining regulatory oversight of sustainability risks.

The proposed changes focus on easing the reporting burden by cutting down the number of data points, improving clarity in templates, and eliminating overlaps with existing regulatory frameworks. The move comes as part of a broader effort to make ESG disclosures more practical and cost-efficient for financial institutions across the European Union.

Under the revised approach, the EBA plans to refine key metrics related to climate risk, exposures, and transition activities, ensuring that banks can still provide meaningful insights without excessive administrative strain. The authority also aims to enhance consistency between ESG reporting and other regulatory requirements, improving usability for both banks and supervisors.

The EBA emphasized that the simplification does not dilute the importance of ESG risk monitoring. Instead, it is intended to strike a balance between robust supervision and operational feasibility, particularly as banks continue to integrate sustainability into their risk management frameworks.

The proposals are currently open for consultation, allowing stakeholders to provide input before final implementation. If adopted, the changes are expected to support more efficient ESG reporting processes while reinforcing the role of sustainability in the European banking sector.