What Changed
- Narrowing the mandatory operating expenditure (OpEx) KPI to non-capitalised research and development expenditure.
- Simplifying group Taxonomy reporting, including the removal of the weighted-average KPI.
- Coordinating with other European Supervisory Authorities on voluntary counterparty OpEx usage and group reporting measures.
The European Securities and Markets Authority (ESMA), acting as the European Union’s financial markets regulator and supervisor, has published a Final Report delivering technical advice to the European Commission. The report contains specific proposals aimed at simplifying key performance indicators (KPIs) under the Taxonomy Disclosures Delegated Act in order to reduce administrative burdens while maintaining disclosure quality.
**Proposed KPI and Group Reporting Simplifications**
ESMA’s recommendations target several key areas of the current reporting regime. First, ESMA recommends narrowing the mandatory operating expenditure (OpEx) KPI specifically to non-capitalised research and development expenditure. Second, the authority proposes simpler group-level Taxonomy reporting mechanisms, which include removing the requirement for the weighted-average KPI. Furthermore, the final report outlines targeted measures designed to make sustainability disclosures more proportionate, clearer, and easier for market participants to implement and analyze.
**Inter-Agency Coordination and Strategic Objectives**
The technical advice was developed in close coordination with the other European Supervisory Authorities (ESAs). This collaborative effort specifically addressed the voluntary use of counterparties’ OpEx information and the alignment of group-level Taxonomy reporting rules.
According to ESMA, these proposals directly advance its broader objectives regarding regulatory simplification and burden reduction. The overall intention is to focus reporting requirements on information that is genuinely useful for investor decision-making, while simultaneously safeguarding the relevance, comparability, and reliability of overall EU Taxonomy disclosures.
**Next Steps for Market Participants**
The proposed changes will directly impact financial market participants and companies subject to EU Taxonomy reporting obligations. ESMA has formally submitted the Final Report and its technical advice to the European Commission for consideration in its upcoming review of the Taxonomy Disclosures Delegated Act. Specific timelines, including publication and application dates, were not provided in the source material.
Who May Be Affected
Financial market participants, issuers, and corporations subject to EU Taxonomy disclosure requirements under the Taxonomy Disclosures Delegated Act.
Cross-Border Context
Applies at the EU level, affecting European market participants and foreign entities operating within or raising capital under EU financial market transparency frameworks.
What to check next
- European Commission review and potential legislative adoption regarding the Taxonomy Disclosures Delegated Act.
This article provides general information and does not constitute legal advice. Consult the official text and obtain advice appropriate to your circumstances where needed.