CSRD Readiness for Banks

In brief

• The framework is fixed in law. Omnibus I (Directive (EU) 2026/470) set the scope. The revised ESRS (Delegated Regulation (EU) 2026/1563) set the content.
• Scope is narrower, but most large banks remain in. Mandatory reporting applies above 1,000 employees and €450m net turnover, tested at entity or group level.
• The report gets shorter; its centre of gravity does not move. Mandatory datapoints fall by more than 60%. Financed emissions, physical-risk exposure and transition planning remain the core of a bank’s report.
• FY2026 is a choice year. Banks already reporting may use the 2023 ESRS, the 2023 ESRS with selected reliefs, or the revised ESRS early. Make the choice, and minute it, before 31 December.
• Supervision has not slowed. The EBA ESG risk guidelines have applied to large institutions since 11 January 2026. CRD VI requires prudential transition plans. The ECB is imposing periodic penalty payments. Lighter disclosure does not mean lighter supervisory exposure.

1. Where the rules stand

The instruments that now govern a bank’s sustainability reporting and risk management, with their status on 4 November 2026.

One implication is easy to miss. With the CSDDD transition-plan obligation gone, the binding transition-planning requirement for EU banks now sits in prudential law (CRD VI), not in due-diligence law.

2. Where does your bank sit?

Find your position in the first column. The right-hand column is the step that should already be under way.

3. What the revised ESRS change for a bank

• Materiality can be assessed top-down. Banks may conclude at topic or sub-topic level where materiality is evident, use sector or regional averages for value-chain data, and update the assessment only when something significant changes. Conclusions of non-materiality need the strongest evidence; assurance providers will test them first.
• Financed emissions stay in. Scope 3 category 15 remains part of E1. One bank-specific relief: financial institutions with intensity-based financed-emissions targets are no longer required to disclose the equivalent absolute values.
• The GHG boundary becomes a choice. Financial control, operational control or equity share replaces the combined approach of the 2023 standards. Choose once and keep it consistent with Pillar 3 and your PCAF methodology.
• Managed investments can fall outside the assessment. Assets managed under client mandates, where the bank does not retain the risks and rewards of ownership, are exempt from materiality assessment and reporting. This matters for private banking and asset management arms; eligibility needs case-by-case analysis.
• Anticipated financial effects are deferred, with one exception. Banks reporting since FY2024–26 may omit all such information before FY2028 and quantitative information before FY2030. New reporters get two and four years. The core E1 datapoints on assets at material physical and transition risk are not deferred.
• Data gaps can be disclosed rather than estimated. Where reliable data would involve undue cost or effort, a bank may limit the scope of a metric, provided it says so.
• Value-chain requests have a ceiling. You cannot require more than the voluntary standard from counterparties with 1,000 employees or fewer. GHG emissions data are outside the cap, so requests to SME borrowers for Scope 1–3 data remain possible. How far the downstream value chain extends for lending is not fully settled; document your interpretation.

4. Three decisions to take before 31 December 2026

Decision 1 — Your FY2026 reporting route

Artamis view: for most Wave 1 banks, Route B or C costs less over two reporting cycles than Route A. Whichever route you take, state it explicitly in the report.

Decision 2 — Re-run the double-materiality assessment

Do it on revised ESRS 1 before FY2027 data collection begins. A 2023-vintage assessment carried forward will drive over-reporting (cost) or under-reporting (assurance findings). Build the evidence file at the same time: every topic judged non-material needs a documented rationale.

Decision 3 — Fix the counterparty data request

Set the scope of what you will ask borrowers and investees for, designed to the value-chain cap and its GHG exception, and time it to the 31 December 2026 reference date for Pillar 3. Counterparty data is the long-lead item: typically 12 to 18 months from first request to assurance-ready.

5. One data build, four outputs

The EBA designed the amended Pillar 3 templates to cross-refer to ESRS, and expects Pillar 3 and supervisory reporting to draw on the same data. Banks that build counterparty-level data once, to an assurance standard, serve all four regimes below from one source.

6. Five pitfalls we see

• Reading simplification as a stand-down. Disclosure became lighter; supervision did not. The ECB’s penalty decisions concerned materiality assessments, the same analysis that underpins a CSRD report.
• A top-down materiality assessment without an evidence trail. The revised standards allow shortcuts in method, not in documentation.
• Assuming the Wave 1 exemption before your member state grants it. The directive permits it; only national law delivers it.
• Two transition plans that contradict each other. The CSRD disclosure and the CRD VI prudential plan must tell the same story. Supervisors and investors will read both.
• Data requests that ignore the cap, or under-use its GHG exception. The first creates friction with borrowers; the second leaves financed-emissions estimates weaker than they need to be.

7. Ten questions for your next risk or sustainability committee

1. Which FY2026 ESRS route have we chosen, and is the rationale minuted?
2. Has our double-materiality assessment been re-run on revised ESRS 1, with evidence for every non-material conclusion?
3. Does our member state’s transposition give us the Wave 1 exemption, and has legal confirmed it?
4. Which GHG boundary will we use, and is it consistent with Pillar 3 and our PCAF methodology?
5. Do our financed-emissions targets use intensity metrics, and are we applying the new relief?
6. What share of the loan book has reported, rather than estimated, counterparty emissions?
7. Can we quantify loans and collateral at material physical risk, by location, today?
8. Is our CRD VI prudential transition plan consistent with what our CSRD report will say?
9. Are our data requests to smaller borrowers within the value-chain cap?
10. Which nature-related dependencies are material for our portfolio, and how would we evidence that to the ECB or FINMA?

8. What to watch over the next twelve months

Key sources

Directive (EU) 2026/470 (Omnibus I), OJ 26 February 2026.

Commission Delegated Regulations (EU) 2026/1563 (revised ESRS) and (EU) 2026/1560 (voluntary standard), OJ 21 September 2026.

Commission Delegated Regulation (EU) 2026/73 amending the Taxonomy Disclosures Delegated Act.

EBA, Final draft ITS on Pillar 3 ESG disclosures (EBA/ITS/2026/02), 22 June 2026; Report on Taxonomy disclosures (EBA/REP/2026/19), October 2026; Guidelines on the management of ESG risks, January 2025.

ECB Banking Supervision, Good practices for climate and nature risk management, May 2026; penalty decisions of November 2025 and 13 February 2026.

FINMA Circular 2026/01, Nature-related financial risks.

This briefing is general information on the regulatory position at the date shown. It is not legal advice. National transposition and supervisory practice vary; confirm your bank’s position with counsel.