The European Banking Authority (EBA) responded to the European Commission’s (EC’s) call for advice (CfA) on key performance indicators (KPIs) and related methodology for the disclosure by credit institutions and by investment firms of information on how and to what extent their activities qualify as environmentally sustainable in accordance with the EU Taxonomy. The EBA underlines the importance of the green asset ratio (GAR) to understand how institutions are financing sustainable activities and meeting the Paris agreement targets and suggests supplementary KPIs on taxonomy-alignment of institutions’ services other than lending and investing. In the opinion, report, and annexes, the EBA elaborates on the KPIs that institutions should disclose, on the scope and methodology for the calculation of those KPIs, and on the qualitative information they should provide. In addition, the EBA includes some policy recommendations to the EC to facilitate institutions’ disclosures and the eventual extension of the KPIs to all relevant assets, including sovereign and central banks exposures.

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