EU Taxonomy 2025: Key Changes for Financial Institutions
With the renewed 2025 Delegated Act, the European Commission introduces key simplifications: a new materiality threshold, fewer ESG reporting KPIs, and optional disclosures. These changes will apply from January 1, 2026, and help banks and financial service providers in the EU streamline their taxonomy compliance. Early action enables a strategic advantage in ESG risk management and regulatory readiness.
The EU taxonomy is getting an update – and it could be the most significant yet! With the Delegated Regulation of July 4, 2025, the European Commission is announcing comprehensive simplifications for financial and non-financial companies. Financial companies in particular can look forward to less reporting effort, more flexibility and practical leeway. Specifically, the draft amendment is intended to modify three existing legal acts:
- Delegated Regulation (EU) 2021/2178 on the disclosure of environmentally sustainable activities,
- Delegated Regulation (EU) 2021/2139 on the technical assessment criteria for climate targets and
- Delegated Regulation (EU) 2023/2486 on other environmental targets.
Old world vs. new world: Planned changes for financial companies
The following overview illustrates the main changes that financial companies can expect from 2026 as part of the EU taxonomy. It presents a comparison between the current practice (“Old World”) and the planned changes (“New World”).
| Innovation | Old World | New World (in 2026) |
|---|---|---|
| Disclosure requirement | Full disclosure of all activities regardless of their significance | Introduction of a materiality threshold (“de minimis”): Activities below 10% of the KPI denominator can be omitted |
| Templates / Data points | Extensive, complex reporting forms with many data points | Simplified templates, up to 89% fewer data points |
| Composition of the KPI denominator | Full inclusion of exposures to non-reportable entities in the denominator | Exceptions possible, especially for non-reportable counterparties |
| Date of publication | Uniform reporting date for all KPIs | Flexibility and staggered publication of individual KPIs |
Innovations in detail
1. Less obligation due to materiality threshold (“de minimis”)
In future, financial companies will no longer have to carry out a taxonomic review of every item, no matter how small. Economic activities or exposures that together account for less than 10% of the respective nominal value of the taxonomy key figures (e.g. the green asset ratio) can be excluded from the taxonomy assessment.
2. Templates thinned out – data points reduced by up to 89%
Taxonomy reporting will be more compact in future: data points will be reduced and irrelevant information (“0” values) will be omitted. This simplifies data processing and supports automated reporting solutions.
It is important to note that the simplifications only apply to external disclosure. Internally, financial companies must continue to ensure a complete, consistent data inventory – also for answering audit questions.
3. Composition of the denominator of the KPIs – informative value
Green Asset Ratio exposures to non-reporting counterparties no longer have to be included in the denominator in future. This will enable a more differentiated presentation of the KPIs, particularly with regard to the actual taxonomy relevance of the portfolios.
4. Publication date: opt-out possible for 2026–2027
Financial companies do not have to publish detailed taxonomy figures until the end of 2027 if they state in the management report that they do not make any statements about a link between their activities and environmentally sustainable economic activities within the meaning of the Taxonomy Regulation. At the same time, financial companies are given the option of disclosing individual key figures on a staggered or staggered basis.
Strategic advantage for pioneers
For many financial companies, taxonomy reporting was previously primarily a regulatory obligation. However, the simplifications now planned open up new opportunities: efficiency gains through reduced data volumes Better communication with stakeholders through clearer KPIs Competitive advantages through early adaptation of processes and systems.
Timetable and entry into force
The regulation is currently still in the formal adoption process. Following publication by the EU Commission, there will be a four-month review period. The new regulations will then apply from January 1, 2026 – they will therefore directly affect the disclosure requirements for the 2025 reporting year.
Acting is worth while
The Delegated Regulation 2025 is an invitation to rethink the topic of taxonomy – not as a bureaucratic burden, but as a strategic ESG management tool. Even if the new regulations are not mandatory until January 1, 2026, financial companies should not waste any time. Those who set the course now can streamline reporting processes, reduce regulatory risks and continue to position themselves as pioneers in sustainability reporting.
Would you like to know what specific impact the changes will have on your institution - and how you can best adapt your processes? Feel free to contact us. Together we will design your taxonomy strategy efficiently and future-proof.
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