business burden — The European Securities and Markets Authority (ESMA) has launched a public consultation aimed at reducing business burden through proposed revisions to the Disclosures Delegated Act (DDA) under the European Union Taxonomy Regulation. This consultation is active until August 12, 2026, and seeks to gather feedback from various stakeholders.
- Contributions to the consultation can be submitted via an online survey, where respondents are advised to indicate any information they wish to keep confidential.
This initiative was prompted by a request from the European Commission on March 4, 2026, with the objective of enhancing the usability and relevance of the current reporting framework. A significant focus of the consultation is on the OpEx Key Performance Indicator (KPI), which ESMA’s preliminary analysis suggests is not providing sufficient value to stakeholders. The existing OpEx KPI is often viewed as complex and less informative compared to Turnover or CapEx metrics.
To tackle this issue, ESMA is proposing four potential approaches, with a particular inclination towards narrowing the mandatory OpEx KPI to Research & Development expenditures. Additionally, the authority plans to introduce an optional OpEx+ ratio for companies that wish to report extra green procurement costs, thereby offering more flexibility in reporting.
Another critical topic under consideration is Group Taxonomy Reporting. ESMA has coordinated with other European Supervisory Authorities to identify challenges related to the aggregation of KPIs for mixed groups and financial conglomerates. The authority proposes shifting from the current practice of weighted-average KPIs to a regime where the principal reporting requirements are dictated by the parent company’s business type. This would be augmented by targeted disclosures designed to mitigate any material information gaps.
Efforts to lessen the reporting burden on businesses are also a priority in this consultation. Proposed measures include specific reliefs akin to those in the European Sustainability Reporting Standards (ESRS). These include exemptions for restating comparative information and a phased-in approach for new requirements. The aim is to clarify the interaction between IFRS 8 operating segments and Taxonomy materiality, providing greater legal certainty for preparers.
Furthermore, the consultation explores the possibility of optional reporting for specific complex metrics, including CapEx Type C and Turnover linked to internal consumption. Establishing a clearer list of data points is also part of the initiative, which will support the development of a digital taxonomy.
ESMA has highlighted that this consultation paper is particularly relevant to issuers, financial institutions, institutional investors, audit and assurance providers, and is also open to other market participants. This includes trade associations, industry bodies, retail investors, consultants, academics, and civil society organisations. The authority encourages all interested parties to participate, with the feedback collected set to inform ESMA’s final technical advice to the European Commission. A final report is anticipated by the end of October 2026.
Contributions to the consultation can be submitted via an online survey, where respondents are advised to indicate any information they wish to keep confidential.
