ESMA targets lighter EU Taxonomy burden for asset managers
European markets supervisor targets lighter EU Taxonomy reporting burden
The European Securities and Markets Authority (ESMA) is consulting on proposals to narrow and simplify EU Taxonomy disclosures for asset managers and non-financial undertakings. The work will inform technical advice to the European Commission on selected key performance indicators (KPIs) under the Taxonomy Disclosures Delegated Act, with ESMA focusing on reducing the reporting burden while preserving investor-relevant information.
ESMA said the consultation builds on the European Commission’s Omnibus simplification package and supports the wider review of Taxonomy reporting. The consultation is therefore a technical advice process, not a final amendment to binding disclosure requirements.
Asset-manager taxonomy ratios
The asset-manager strand is the most directly relevant part of the consultation for investment disclosures because it would affect how portfolio Taxonomy alignment is measured and reported.
- Portfolio KPI: ESMA proposed that asset managers use a KPI based on the ratio of eligible investments that are Taxonomy-aligned. The numerator would combine the value of green bonds that comply with the EU Green Bond Standard with a weighted average of investments in Taxonomy-aligned activities of investee companies.
- OpEx in manager disclosures: ESMA’s preliminary preference is to limit the operational expenditure (OpEx) calculation to research and development (R&D) expenditure and to recommend that asset managers do not use OpEx to measure Taxonomy alignment in asset-manager disclosures.
- Counterparty calculations: ESMA is seeking views on a voluntary, case-by-case approach that would combine OpEx and capital expenditure (CapEx) KPIs for specific counterparties, while the standard mandatory KPI would remain based on Turnover and CapEx only.
Operational expenditure for non-financial undertakings
OpEx is a central simplification target because ESMA is responding to stakeholder concerns about complexity and the reporting burden in the current KPI. The proposed approach would shift mandatory reporting towards a narrower expenditure base while allowing additional voluntary disclosure.
- Mandatory OpEx scope: ESMA’s preliminary preference is to limit mandatory OpEx exclusively to R&D expenditure, reducing the range of operating costs that undertakings must calculate for the mandatory KPI.
- Voluntary OpEx+: ESMA suggests pairing the R&D-only mandatory KPI with an optional voluntary “OpEx+” KPI, allowing undertakings to report additional operating costs separately.
Mixed-group reporting
Mixed groups and financial conglomerates are another focus because a single group can contain entities subject to different Taxonomy disclosure models. ESMA is testing whether the parent undertaking’s reporting model should determine the main structure, supplemented by transparency for other undertaking types in the same group.
- Parent reporting model: ESMA is seeking feedback on a pragmatic group-level reporting solution for mixed groups based on the parent undertaking’s reporting model. Under that approach, the group would select the main reporting regime according to the parent undertaking’s type and add transparency for other undertaking types.
- Non-financial parent: Where the parent is non-financial, group reporting would apply Taxonomy Disclosures Delegated Act rules for non-financial undertakings across Turnover, OpEx and CapEx. Relevant KPIs for other undertakings would be disclosed using materiality thresholds such as the 10% cumulative threshold in the Omnibus Delegated Act.
Templates, reliefs and materiality
ESMA is also seeking feedback on broader simplification of KPIs, templates and disclosure requirements, including sector-specific proposals. It is seeking views on alignment with European Sustainability Reporting Standards (ESRS), reporting reliefs and materiality.
The consultation sits within a coordinated review across the European Supervisory Authorities (ESAs), after the European Commission asked each ESA to advise on targeted issues within its remit and horizontal topics of common interest.
Legislative path
ESMA published the consultation paper on 1 July 2026; the consultation runs for six weeks until 12 August, with an online public hearing scheduled for 22 July from 14:00–15:30 Paris time.
ESMA will deliver final technical advice by the end of October, while consultations by the European Banking Authority (EBA) and EIOPA run in parallel.
--- Sources: https://www.esma.europa.eu/press-news/esma-news/esma-consults-simplifying-eu-taxonomy-disclosure-framework https://www.esma.europa.eu/press-news/consultations
