The EU has been working to perfect its sustainability investing laws for some time now. The EU Taxonomy and the SFDR have been imperfect tools, proving to be burdensome to companies. The Taxonomy was amended as part of the Omnibus simplification package, but questions still remain about how to further streamline the law. The EU has now issued a call to the European Supervisory Authorities (ESAs) to review the Taxonomy. In the call for technical advice they state:
“The current effort to complete the review of Taxonomy reporting would focus on targeted simplification and improvement measures, which were not included in the Omnibus Delegated Act due to their technical nature. This work on Taxonomy reporting will take place alongside the Commission’s efforts to scale up transition finance as provided in the SFDR proposal and to ensure greater simplification, consistency, interoperability and clarity across the sustainable finance framework, in line with the simplification process initiated by the Omnibus I package. With this call for targeted advice, DG FISMA is seeking technical input in the context of its efforts to complete the review and simplification of the Taxonomy reporting provided in the Disclosures Delegated Act.”
The advice sought from the ESAs particularly pertains to certain key performance indicators required to be disclosed under the taxonomy, including:
“the operational expenditure (OpEx) KPI of non-financial firms, Commissions and Fees KPI and Trading Book KPI of credit institutions, and the underwriting KPI of insurance/re-insurance undertakings.”
Final advice from the ESAs is expected on these matters by October 2026.
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