Green Asset Ratio (GAR) key performance indicator (KPI) under the Taxonomy Regulation shows the proportion of exposures related to Taxonomy-aligned activities compared to the total assets of those credit institutions.

 

The GAR should relate to the credit institutions’ main lending and investment business, including loans, advances and debt securities, and to their equity holdings to reflect the extent to which those institutions finance Taxonomy-aligned activities.

 

The Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 defines a Green Asset Ratio for the disclosure by institutions of information on the level of taxonomy alignment of their exposures.

 

The definition of the GAR is based, to a great extent, on the European Bankin Authority (EBA) Advice of 1 March 2021 and on the respective GAR proposal (ESA’s Final draft of 24 January 2022 implementing technical standards on prudential disclosures on ESG risks in accordance with Article 449a CRR, EBA/ITS/2022/01, p. 9), nevertheless, there are some important differences, notably:

 

1. The Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 delays the date of application of the GAR disclosure by one year, until 2024 for data as of end-2023 (EBA is also delaying the date of application of the GAR disclosure in the Pillar 3 ESG ITS until end-2023 as the first disclosure reference date);

 

2. The Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 excludes from the numerator of the GAR exposures to undertakings that are not obliged to publish non-financial information pursuant to Article 19a or 29a of Directive 2013/34/EU (these exposures are nevertheless included in the denominator of the GAR, which means that in practice the GAR is defined as if these exposures are always 0% Taxonomy-aligned);

 

3. The EBA in the final ITS is asking institutions to replicate the GAR as defined in the Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 and to disclose extended information on the level of taxonomy alignment of exposures towards non-financial corporates not subject to NFRD disclosure obligations, for the calculation of an Banking Book Taxonomy Alignment Ratio (BTAR).

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Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and presentation of information to be disclosed by undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure obligation

Recital 5


The main activity of credit institutions is the provision of financing to and investments in the real economy. The exposures of credit institutions to undertakings that they finance or invest in are reflected as assets in the credit institutions’ balance sheet. The main key performance indicator for credit institutions that are subject to the disclosure obligations laid down in Articles 19a and 29a of Directive 2013/34/EU should be the green asset ratio (GAR), which shows the proportion of exposures related to Taxonomy-aligned activities compared to the total assets of those credit institutions. The GAR should relate to the credit institutions’ main lending and investment business, including loans, advances and debt securities, and to their equity holdings to reflect the extent to which those institutions finance Taxonomy-aligned activities.

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Annex VII(2)

INVESTMENT FIRMS DEALING ON OWN ACCOUNT

Investment firms dealing on their own account shall disclose the following KPIs:

2.1. KPIs related to their assets as:
– proportion of assets associated with Taxonomy-eligible economic activities within total assets;
– proportion of assets associated with Taxonomy-aligned economic activities within assets associated with Taxonomy-eligible economic activities, and
– proportion of assets associated with Taxonomy-aligned economic activities within total assets (GAR).

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Annex VII(3)

INVESTMENT FIRMS NOT DEALING ON OWN ACCOUNT

Investment firms not dealing on their own account shall disclose the following KPIs:

3.1. KPIs related to revenue, including fees, commissions and other monetary benefits as:
– proportion of revenue from services and activities associated with Taxonomy-eligible economic activities within total revenue from investment services and activities;
– proportion of revenue from investment services and activities associated with Taxonomy-aligned economic activities within revenue from investment services and activities associated with Taxonomy-eligible economic activities; and
– proportion of revenue from investment services and activities associated with Taxonomy-aligned economic activities within total revenue from investment services and activities (GAR).