09 June 2023

EUROPEAN BANKING FEDERATION RESPONSE TO THE EUROPEAN COMMISSION HAVE YOUR SAY ON THE EU ENVIRONMENTAL TAXONOMY

1. Amendments to Delegated Regulation (EU) 2021/2178 (Article 5) - Timing
of disclosures:
• Firstly, we would like to highlight that there is a contradiction within Article
5 regarding the application of the DA for financial institutions. The new
paragraph (7) of Article 5 states that: “From 1 January 2024 until 31
December 2024, financial undertakings shall only disclose: (a) the
proportion in their covered assets of exposures to Taxonomy non-eligible
and Taxonomy-eligible economic activities […]. The key performance
indicators of financial undertakings shall cover the economic activities […]
from 1 January 2026”. On this basis, we conclude that from 1 January 2025
until 31 December 2025, financial companies will still report on the eligibility
of their exposures/assets contributing to the new activities. We request the
European Commission to correct the article as indicated: “From 1 January
2024 until 31 December 2025, financial undertakings shall only disclose: (a)
the proportion in their covered assets of exposures to Taxonomy noneligible
and Taxonomy-eligible economic activities”.
• In addition, we would like to highlight, with respect to eligibility reporting,
the following: assuming that our interpretation is correct, and i.e., that
financial institutions will be expected to report on eligibility both in 2024 and
2025, then the current draft suggests that credit institutions will need to
report eligibility (on the new environmental objectives) as of 2024, i.e., the
same year as NFCs, and therefore in the absence of data from companies.
Although eligibility does not require checking the disclosures made by
“counterparties”, asking only to understand if the counterparty is within one
of the NACE Code considered in the delegated acts, first-year eligibility
reporting with the climate DAs has proven to be extremely challenging, with
lack of meaningful comparability, in the absence of counterparties’
disclosures. The problem experienced in 2022 for the two climate objectives
would be even more significant, considering that the NACE codes on the 4...

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