Regulators Told to Temporarily Suspend Enforcement of ESG Disclosure Rules for Banks by EBA
The European Banking Authority (EBA) has announced a temporary moratorium on enforcing ESG Pillar 3 disclosure requirements for banks in the European Union, as the European Commission’s Omnibus I initiative progresses through the legislative process.
Launched in early 2025, the Omnibus I initiative aims to significantly reduce and streamline sustainability reporting burdens across various regulations, including the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy Regulation, and related ESG frameworks. The initiative seeks to cut compliance costs while maintaining transparency on climate, nature, and human rights.
The EBA's decision to issue a "no-action" letter comes in response to the ongoing uncertainty regarding the final outcome of the Omnibus initiative on these regulations. This pause is intended to avoid premature or fragmented application of requirements that may soon be revised.
The EBA is currently evaluating its own proposed amendments to the banking package reporting requirements, made in light of the EU’s simplification initiative. The EBA is also conducting a public consultation on actual amendments to the Pillar 3 Implementing Technical Standards (ITS), with final standards expected by Q4 2025 and application for disclosures to start as of 31 December 2026.
The Omnibus I initiative proposes major changes to a series of regulations, including the Corporate Sustainability Reporting Directive (CSRD), which the EBA expects to have a direct impact on ESG risk-related disclosures under its banking package requirements. Meanwhile, complementary EU actions under the Omnibus package have delayed or eased reporting obligations for companies under CSRD and related EU sustainability frameworks, emphasizing proportionality and phased implementation.
The EBA is concerned about a disproportionate compliance burden on smaller institutions that may be required to comply with disclosure obligations for the first time, which could change considerably once the Omnibus is finalized. The authority is committed to delivering a coherent and streamlined ESG disclosure framework and will continue to work closely with EU institutions and stakeholders to ensure smooth implementation of the new requirements.
The EBA's no-action letter on prioritizing the enforcement of new ESG Pillar 3 disclosure requirements for banks is due to the uncertainty regarding the final outcome of the Omnibus initiative on these regulations. The impact of this decision is expected to be substantial, given the changes in the EU Taxonomy and updates to the CSRD.
In February 2025, the European Commission launched the Omnibus I initiative, aimed at reducing the sustainability reporting and regulatory burden on companies. The EU published a Banking Package (CRR3) in 2024, which includes changes to reporting requirements for banks beginning in 2025. These changes extend the scope of ESG risks-related disclosures from large institutions to all institutions, focusing on environmental physical and transition risks, social and governance risks, exposures to fossil fuel sectors, and disclosures on how institutions integrate ESG risks into their business strategy and processes.
As of August 2025, ESG Pillar 3 disclosure requirements for banks in the EU are not being strictly enforced, as the European Banking Authority (EBA) has issued a "no-action" letter instructing regulators to hold off on enforcement of these ESG disclosure rules. This pause is in place while the European Commission’s Omnibus initiative progresses through the legislative process.
[1] European Commission. (2025). Omnibus I initiative. Retrieved from https://ec.europa.eu/info/strategy/priorities-2020-2024/europe-fit-digital-age/sustainable-growth/sustainable-finance/eu-taxonomy-sustainable-activities/omnibus-initiative_en
[2] European Banking Authority. (2025). EBA's proposed amendments to the banking package reporting requirements. Retrieved from https://eba.europa.eu/regulation-and-policy/csrd-and-taxonomy/amendments-to-the-banking-package-reporting-requirements
[3] European Banking Authority. (2025). EBA's public consultation on actual amendments to the Pillar 3 Implementing Technical Standards (ITS). Retrieved from https://eba.europa.eu/regulation-and-policy/csrd-and-taxonomy/amendments-to-the-banking-package-reporting-requirements
[4] European Commission. (2024). CRR3 banking package. Retrieved from https://ec.europa.eu/info/publications/crr3-amending-regulation_en
[5] European Banking Authority. (2025). EBA's no-action letter on prioritizing the enforcement of new ESG Pillar 3 disclosure requirements for banks. Retrieved from https://eba.europa.eu/regulation-and-policy/csrd-and-taxonomy/amendments-to-the-banking-package-reporting-requirements
- The European Banking Authority's (EBA) decision to temporarily postpone enforcing ESG Pillar 3 disclosure requirements for banks ties into the ongoing policy-and-legislation changes, such as the Omnibus I initiative and the Corporate Sustainability Reporting Directive (CSRD), which aim to streamline sustainability reporting burdens in the business sector.
- As the Omnibus I initiative progresses through the legislative process, discussions within the realm of politics and general news involve evaluating the implications of its proposed changes, particularly on the finance sector, as it pertains to corporate sustainability and ESG risk-related disclosures.
- In light of the pending policy modifications under the Omnibus I initiative, various upcoming changes to regulations like the EU Taxonomy and the CSRD may necessitate updates to the EBA's current finance policies, requiring revisions to the EBA's Pillar 3 Implementing Technical Standards (ITS) and banking package reporting requirements.
