Omnibus Paradox: 70% of banks expect more ESG data work despite EU simplifications

18 November 2025 • Research

ESG Data Monitor 2025

Largest ESG Data Study in the DACH Region Reveals Growing Gap Between Bureaucracy Reduction and Banking Practice – Short-Term Decline in the Impact of ESG Criteria on Lending

Frankfurt am Main, 18 November 2025 – The planned simplifications of ESG reporting obligations under the Omnibus Package could paradoxically lead to a significant increase in workload for banks. This is the key finding of the ESG Data Monitor 2025, the largest study on the use of ESG data by financial institutions in German-speaking countries. Around 70 percent of the 165 surveyed experts from financial institutions with a combined balance sheet total of over EUR 6 trillion expect additional burdens in meeting regulatory requirements for banks when granting loans to non-reporting corporate clients and small and medium-sized enterprises (SMEs).

ESG firmly embedded despite political headwinds

Despite political headwinds, financial institutions are consistently pursuing their ESG integration strategies: 86 percent already use ESG scorings or plan to do so by the end of 2027. The study thus confirms a fundamental transformation – ESG has moved from hype to day-to-day banking practice. It also shows that financial institutions recognise the long-term relevance of the topic regardless of short-term political debates and continue to develop their ESG risk management systems independently.

Conducted by openESG, PPA Group and CredaRate Solutions in cooperation with Frankfurt School of Finance & Management, the study also reveals a marked decline in the current influence of ESG factors on lending decisions. Whereas in 2024 an average of 40 percent of lending decisions were influenced by ESG risks, this figure dropped to between 23 and 34 percent in 2025 – with the lowest share in the SME segment. However, the experts surveyed expect a medium-term increase to over 40 percent for large corporations and more than 30 percent for SMEs by the end of 2027.

Omnibus expected to intensify, not solve, the data challenge

In August 2025, the European Central Bank (ECB) had already warned the European Commission about the risk of regulatory imbalance. It emphasised that climate change has “profound implications for price stability” and requires a sufficiently robust data foundation to manage financial risks. The planned reduction of reporting entities by up to 80 percent under the Omnibus Package could, in the ECB’s view, jeopardise precisely this data basis.

This creates a dilemma for banks: while the ECB and the EBA continue to tighten their ESG risk management expectations, information gaps at the corporate level are likely to widen. Seventy percent of respondents see the Omnibus initiative as an obstacle that will make it harder to meet regulatory requirements, particularly in financing non-reporting corporate clients and SMEs. Banks may increasingly rely on sector averages or estimates – a practice already prevalent in the SME segment. In this segment, approximately 63 percent of lending decisions are currently based on averages rather than individual company data. From a risk management perspective, this represents a highly uncertain foundation for assessing company-specific ESG risks.

Data availability remains the Achilles’ heel

The study confirms that missing or unreliable ESG data remain the biggest operational challenge – particularly in the SME sector. On a scale of 1 to 6, respondents rated the relevance of this issue at an average of 5.2 and data quality at 4.9. Notably, there is a perceptual gap between management and operational levels: while subject-matter experts consider the deficiencies critical, top management tends to view the issue as less urgent.

Large institutions with balance sheets exceeding EUR 30 billion already factor ESG risks into 40 percent of lending decisions, whereas smaller institutions with balance sheets below EUR 1 billion reach only 22 percent. However, smaller institutions plan to narrow this gap by the end of 2027, aiming to raise their share to an average of 30 percent.

60 percent still see ESG as a business opportunity – despite political headwinds

Despite increasing political controversy and regulatory uncertainty, 60 percent of respondents continue to view sustainable finance as a business opportunity – a virtually unchanged figure compared with the previous year. Cooperative banks are particularly optimistic (62 percent), while private banks (48 percent) tend to fear additional administrative burden. The perception of transition risks has also shifted: 64 percent of respondents currently consider their relevance to be declining – a view aligned with BaFin’s, but in clear contrast to the European Central Bank’s position.

ESG scoring becomes the new standard

The integration of ESG criteria into bank management continues to progress: 86 percent of respondents already use ESG scoring or plan to introduce it within the next two years. However, these scorings directly influence lending margins in only around 30 percent of institutions – with much greater relevance among large institutions (45 percent) than smaller ones. The collection of required data remains fragmented: large institutions primarily rely on their relationship managers, while smaller ones depend on questionnaires and external service providers.

“The study demonstrates that ESG data have become a core component of risk management – not only a regulatory necessity, but also an economic factor,” says Michael Sindram, Managing Director of openESG GmbH. “Despite regulatory uncertainties, banks are integrating the topic into their operations with pragmatic approaches. This clearly underlines the growing importance of these relatively new ESG risk drivers.”

About the ESG Data Monitor 2025

The ESG Data Monitor 2025 is the largest study on the use of ESG data by financial institutions in the German-speaking region. It provides valuable orientation for risk and credit managers by highlighting operational priorities and challenges. The third edition surveyed 165 experts from Germany, Austria, and Switzerland, representing a combined balance sheet total of over EUR 6 trillion. Respondents primarily came from risk management, back-office, and sustainability management – the key functional areas where ESG data are operationalised on a daily basis. The study was conducted by openESG, PPA Group and CredaRate Solutions between June and October 2025, with scientific support from Frankfurt School of Finance & Management.

About openESG GmbH

Based in Frankfurt am Main, openESG GmbH offers an integrated SaaS platform for the structured, institution-specific collection, management, and assessment of Environmental, Social and Governance data. openESG helps financial institutions fulfil regulatory requirements efficiently and audit-proof, with minimal administrative effort.

About PPA Group – An Acuity Knowledge Partners Company

Headquartered in Darmstadt, the PPA Group is a specialised technology and services company that has been digitising, extracting, and structuring financial and ESG data from corporate reports for more than 20 years. Its team of around 150 experts processes over 300,000 documents annually and provides financial institutions with customised solutions for the preparation of annual reports, interim statements, and ESG reports through a hybrid combination of OCR, AI algorithms, and manual quality assurance.

About CredaRate Solutions GmbH

Based in Cologne, CredaRate Solutions GmbH is a specialist in credit risk management, offering supervisory-compliant, pool-based rating and scoring models as SaaS solutions. CredaRate also operates a dedicated ESG scoring solution for the structured collection and assessment of sustainability data and has received several awards, including the ESG Transformation Award, for its innovative approach.

About Frankfurt School of Finance & Management

Frankfurt School of Finance & Management is one of Europe’s leading business schools and plays a key role in advancing sustainable and climate-resilient finance through its FS-UNEP Centre. Its multidisciplinary approach combines expertise in economics, management, law, and social sciences, enabling the School to develop innovative solutions to complex global challenges.

openESG GmbH

Michael Sindram

Geschäftsführer

Telefon: +49 173 40 38 202

E-Mail: michael.sindram@openesg.de

www.openesg.de

PPA Gruppe

Heimo Saubach

Geschäftsführer

Tel: +49 6151 7804 593

E-Mail: heimo.saubach@ppaworld.com

https://www.acuitykp.com/ppa/