European Banking Authority Issues No Action Letter On ESG Rules

The European Banking Authority (EBA) announced that regulators should not prioritise the enforcement of upcoming environmental, social, and governance (ESG) Pillar 3 disclosure requirements for banks. This pause will remain in place pending clarity from the European Commission’s Omnibus initiative.

The move follows changes introduced in the EU’s 2024 Banking Package, which expanded disclosure obligations beginning in 2025, including details on environmental, social, and governance risks, fossil fuel exposures, and integration of ESG factors into strategy and risk management. With the European Commission now reviewing major sustainability rules through the Omnibus initiative, the EBA said ongoing changes may directly impact ESG disclosure structures.

The EBA highlighted timing concerns, warning that enforcement under current rules could create conflicting requirements and add compliance burdens, particularly for smaller institutions.