**ESMA Launches Public Consultation to Streamline Business Reporting Requirements**
The European Securities and Markets Authority (ESMA) has initiated a public consultation aimed at revising the Disclosures Delegated Act (DDA) under the European Union Taxonomy Regulation. This consultation, which will remain open until August 12, 2026, seeks to gather feedback from stakeholders on proposed changes designed to enhance the usability, relevance, and proportionality of the existing reporting framework.
This initiative comes in response to a request from the European Commission made on March 4, 2026. The consultation focuses on several critical areas, particularly the OpEx Key Performance Indicator (KPI). Preliminary analyses by ESMA indicate that the current OpEx KPI is perceived as complex and offers limited value to stakeholders when compared to other metrics such as Turnover and Capital Expenditure (CapEx).
To address these concerns, ESMA is proposing four potential approaches to refine the OpEx KPI. The authority's preferred option is to narrow the mandatory OpEx KPI to specifically encompass Research & Development expenditures. Additionally, ESMA is considering the introduction of an optional OpEx+ ratio, which would allow companies to report additional green procurement costs if they choose to do so.
Another significant aspect of the consultation is the issue of Group Taxonomy Reporting. ESMA, in collaboration with other European Supervisory Authorities, has identified substantial challenges related to the aggregation of KPIs for mixed groups and financial conglomerates. To improve this process, the authority suggests moving away from the current practice of using weighted-average KPIs. Instead, it proposes a framework where the primary reporting requirements are dictated by the parent company’s business type, supplemented by targeted disclosures to avoid material information gaps.
In addition to these specific proposals, the consultation addresses broader measures aimed at reducing the reporting burden on businesses. Among these measures are the introduction of specific reliefs akin to those found in the European Sustainability Reporting Standards (ESRS). This includes exemptions for restating comparative information and phased-in applications for new reporting requirements, which would ease the transition for companies adapting to the revised standards.
The consultation also aims to clarify the interaction between IFRS 8 operating segments and Taxonomy materiality, providing greater legal certainty for businesses preparing their reports. Furthermore, ESMA is considering the option for companies to report on certain complex metrics, such as CapEx Type C and Turnover related to internal consumption, on an optional basis.
A key goal of this initiative is to establish a clearer list of data points that will support the development of a digital taxonomy, which is expected to facilitate more efficient reporting processes.
ESMA emphasizes that this consultation is particularly relevant to a wide range of stakeholders, including issuers, financial institutions, institutional investors, audit and assurance providers, and trade associations. However, responses are also welcomed from retail investors, consultants, academics, and civil society organizations. The authority is keen to receive diverse feedback to ensure that the final recommendations reflect the needs and concerns of all market participants.
The feedback collected during this consultation will be instrumental in shaping ESMA's technical advice to the European Commission, with a final report expected to be published by the end of October 2026. Stakeholders interested in contributing can do so via an online survey, and they are encouraged to indicate any information they wish to keep confidential.
As the consultation progresses, ESMA aims to create a more efficient and effective reporting framework that alleviates the burdens currently faced by businesses while enhancing the quality and relevance of the information disclosed under the EU Taxonomy Regulation.