The European Securities and Markets Authority (ESMA), the regulator and supervisor of EU financial markets, has published its Final Report providing technical advice to the European Commission on the simplification of key performance indicators under the Delegated Act on Taxonomy Disclosures.
ESMA recommends limiting the mandatory key performance indicator (KPI) for operating expenses (OpEx) to non-capitalised research and development expenses. It also proposes a simpler group taxonomy reporting framework, which includes the removal of the weighted average KPI, and specific measures to ensure that the disclosed information is more proportionate, clear and easy to use.
The technical advice was coordinated with other European supervisory authorities, particularly regarding the voluntary use of information on counterparties' operating expenses and the presentation of group-level taxonomy reports.
The proposals support ESMA's objectives of simplification and reduction of administrative burden, while focusing reporting on information useful for decision-making and preserving the relevance, comparability and reliability of Taxonomy disclosures.