ESMA Recommends Simplifying EU Taxonomy Reporting KPIs

The European Securities and Markets Authority (ESMA) has recommended changes to simplify key performance indicators (KPIs) reported under the EU Taxonomy Disclosures Delegated Act. The EU financial markets regulator submitted its technical advice to the European Commission for consideration in the Commission’s review of the act. ESMA proposes narrowing the mandatory operating expenditure (OpEx) KPI to non-capitalised research and development expenditure. For group-level Taxonomy reporting, it recommends removing the weighted-average KPI and introducing other simplifications intended to make disclosures more proportionate, clearer and easier to use. The advice was coordinated with the other European Supervisory Authorities, particularly on the voluntary use of counterparties’ OpEx information and reporting at group level. ESMA said the proposed changes aim to reduce reporting burdens while keeping disclosures focused on decision-useful information and preserving their relevance, comparability and reliability. The recommendations are technical advice, not changes to the reporting requirements already in force. The European Commission will consider them as part of its review of the Taxonomy Disclosures Delegated Act.