ESG data as the key to financing: use the stop-the-clock time now

Against this backdrop, interactions with external stakeholders – such as financial institutions, credit providers, and ESG rating agencies – highlight the increasing importance of reliable, decision-useful ESG data. Expectations around data quality, consistency, and auditability continue to rise and are already influencing access to capital, lending conditions, and ESG ratings. 

This trend is reinforced by key European supervisory bodies. The European Central Bank (ECB), the European Banking Authority (EBA), and the European Securities and Markets Authority (ESMA) have each published opinions, supervisory statements, and technical guidance emphasizing the materiality of sustainability-related disclosures for the financial sector. In the following, we outline selected regulatory positions and discuss their implications for corporate practice. 

In its opinion, the ECB acknowledges the European Commission’s objective to reduce reporting burdens and foster competitiveness and innovation as part of the Omnibus initiative. However, it emphasizes that such simplification must not come at the expense of the objectives of the European Green Deal and the Sustainable Finance Action Plan. The overarching message of the opinion is that consistent, comparable, and reliable sustainability-related disclosures are essential for the effective assessment and management of ESG risks by financial market participants – and thus for safeguarding financial stability. A reduction in ESG data coverage or scope must therefore be avoided. 

The ECB argues that companies with between 500 and 1,000 employees – as well as all credit institutions – should remain subject to mandatory reporting requirements, albeit in a simplified format. In the context of the ESRS simplification, the ECB stresses that disclosures related to climate (ESRS E1) and biodiversity (ESRS E4) should remain mandatory. Voluntary reporting, in the ECB’s view, is not a substitute for mandatory disclosure obligations, as it may lead to selective transparency and risks of greenwashing. 

The ECB further calls for the timely implementation of mandatory limited assurance requirements for sustainability disclosures, while maintaining the option for reasonable assurance in the medium term. Finally, it underlines that climate transition plans under the CSDDD must not only be published but also effectively implemented. 

In its Final Report of 8 January 2025, the European Banking Authority (EBA) sets out comprehensive expectations for financial institutions regarding the internal management of ESG risks – focusing in particular on climate-related risks. The Guidelines clarify the role of credit institutions and other financial institutions in supporting the transition to a carbon-neutral and sustainable economy within the European Union. 

Financial institutions are expected to develop processes for identifying and assessing ESG factors, integrate them into their existing internal risk management frameworks, and recognise their potential to act as drivers of traditional risk categories. Considering the long-term resilience of institutions and overall financial stability, climate and environmental risks may affect key elements of financial institutions’ business models, such as credit granting, liquidity, or capital adequacy.  

The Guidelines provide detailed specifications on the required content of ESG risk assessments and transition plans, particularly from the perspective of risk management and credit-granting processes. They will apply from 11 January 2026 to large and complex financial institutions, and from 11 January 2027 to small and non-complex institutions.  

The ESG Rating Regulation aims to enhance the transparency, comparability and integrity of ESG ratings issued by providers established in the EU as well as by third-country providers offering ESG ratings within the Union. It was adopted on 27 November 2024 and entered into force on 1 January 2025. It will apply in full from 2 July 2026. Under the new framework, ESG rating providers must obtain authorisation from the European Securities and Markets Authority (ESMA), which becomes the central supervisory authority for ESG rating activities. The Regulation introduces significant transparency and disclosure requirements. All information subject to disclosure must be made publicly accessible via the European Single Access Point (ESAP). The Regulation seeks to prevent greenwashing, social washing and other forms of misleading sustainability claims, while strengthening investor and corporate trust in ESG assessments. 

For companies, this means that ESG ratings used in investor communications, sustainability reporting or credit negotiations must in future be based on clearly defined methodologies, transparent data sources and publicly disclosed assessment criteria. Consequently, companies will be required to ensure that their ESG data is consistent, traceable and verifiable, in order to enable reliable third-party evaluations.

In May 2025, the ESMA published a Consultation Paper containing draft Regulatory Technical Standards (RTS) developed in the context of the ESG Ratings Regulation mentioned above. The consultation focused on three main areas. First, it addressed the information to be included in applications for authorisation and endorsement. Second, it examined the measures and safeguards designed to prevent and mitigate conflicts of interest, particularly where ESG rating providers also offer other services. Third, it covered the disclosure obligations towards the public, the rated entities and issuers, and the users of ESG ratings. The objective of the consultation is to ensure a high level of transparency, independence and accountability in relation to the methodologies, organisational arrangements and governance of ESG rating providers. The consultation phase ran until 20 June 2025. The final drafts of the RTS are expected to be submitted to the European Commission in October 2025.

The collection and provision of sustainability-related information in the corporate context is essential in light of an expanding group of stakeholders – including financing partners, financial institutions and ESG rating agencies. Regardless of regulatory obligations, ESG data management has become a strategic imperative. ESG data now serves as a key decision-making input for banks, particularly in credit allocation, risk assessment and asset management. 

Companies should therefore already begin collecting “no-regret” ESG data points – information whose relevance is clear, regardless of the final shape of the regulatory framework. These include, in particular, a structured double materiality assessment, the measurement of Scope 1–3 greenhouse gas emissions, core ESG indicators (e.g. on energy consumption, diversity or waste), as well as documented transition pathways. 

At the same time, reliable, transparent and verifiable processes should be established for managing ESG data, so that the time gained can be used to prepare the organisation strategically, in a data-driven and resilient manner, for future ESG requirements. ​