The reporting requirements established in the new Directive will be phased in, from 2025, for these undertakings, which according to European Commission estimates number some 50,000 across the EU and which include credit institutions. For this purpose, the Commission will determine, through delegated acts to be published no later than 30 June 2023, the specific information to be reported, which will have to be based on standards published by EFRAG,16 the European Commission’s financial reporting advisory group. The considerable amount of information to be reported includes an analysis of each firm’s business model and its resilience to sustainability-related risks and a description of the specific sustainability targets with a concrete time horizon. It also includes a description of how their management bodies operate and their expertise on these matters, and information on sustainability-linked incentive systems. Importantly it also includes the transition plans needed to ensure that firms’ business models are compatible with the transition towards a sustainable economy and the aim of restricting global warming to 1.5°C. All the information should reflect not only firms’ own activity, but also that of their value chains, trading partners and supply chains. As you may have guessed, implementation will call for a major effort by the firms concerned, but it will also entail clear improvement in the granularity, comparability and quality of the non-financial information disclosed. These standards also mean that banks will have more data on the ESG risks their counterparties face, contributing to better management of these risks.

16  https://www.efrag.org/lab6  Significant headway has also been made in the strictly banking sphere. For example, the guidelines on supervisory expectations relating to climate and environmental risks published by the Banco de España17 and the European Central Bank (ECB),18 addressed to the financial institutions they supervise. These guidelines represent a clear signal from the prudential supervisors that they want banks to start taking into account the impact that these risks can have on their business. In addition, under the Pillar 3 or prudential disclosure framework, in 2023 large listed European banks will begin disclosing initial data on how climate change risk affects their balance sheets. For this purpose, they will use the templates envisaged in the implementing technical standards on the disclosure of ESG risks adopted by the European Commission on 30 November 2022.19 These templates include highly detailed information on collateral, exposures to physical and transition risks and mitigating actions, among a great deal of other information, to be reported up to 2025 under a phased-in approach owing to its high complexity. Meanwhile, the European Banking Authority (EBA) has recently published20 its roadmap on the battery of ESG regulations in progress. Over a three-year horizon, this roadmap aims to incorporate all ESG considerations into the regulatory framework for banks, supporting the EU’s efforts to achieve transition towards a more sustainable economy. In addition, over the course of this year the EBA will publish a report on how these risks should be included in banking sector prudential regulations.