Paradoxically, the planned easing of ESG reporting requirements through the Omnibus Package could lead to considerable additional work for banks. This is shown by the ESG Data Monitor 2025, the largest study on the use of ESG data in financial institutions in German-speaking countries. Around 70 percent of the 165 experts surveyed from financial institutions with total assets of over €6 trillion expect additional burdens in meeting regulatory requirements for banks when lending to non-reporting corporate customers and small and medium-sized enterprises.
ESG firmly established despite political headwinds
ESG firmly established despite political headwinds
Despite political headwinds, financial institutions are sticking to their plans for ESG integration: 86 percent already use ESG scoring or plan to use it by the end of 2027. The study thus confirms a fundamental change – ESG has moved from the hype phase to operational banking practice. The study shows that financial institutions recognize the long-term relevance of the issue regardless of short-term political discussions and are independently developing their ESG risk management systems.
The study, conducted by openESG, PPA Group, and CredaRate Solutions in collaboration with the Frankfurt School of Finance and Management, also shows a marked decline in the current influence of ESG on credit decisions. While ESG risks still influenced an average of 40 percent of credit decisions in 2024, this figure will fall to only 23 to 34 percent in 2025, with the sharpest decline of 17 percentage points in the SME segment. By the end of 2027, however, the experts surveyed predict a medium-term increase to over 40 percent for large companies and over 30 percent for SMEs.
Omnibus will exacerbate data problem instead of solving it
The European Central Bank had already pointed out the danger of regulatory imbalance in a letter to the EU Commission in August 2025. In it, it emphasized that climate change had a “profound impact on price stability” and required a sufficiently robust database to manage financial risks. The ECB believes that the planned reduction of up to 80 percent in the number of companies subject to reporting requirements under the Omnibus package could jeopardize this very data basis.
This creates a conflict of objectives for banks: while the ECB and EBA are further tightening their ESG risk management requirements, there is a simultaneous threat of information gaps at the company level. 70 percent of the experts surveyed see the Omnibus initiative as an obstacle that will make it more difficult to comply with regulatory requirements, particularly when financing non-reporting corporate customers and SMEs. In the future, banks could resort more frequently to industry averages or estimates – a practice that already dominates the SME segment today. In this segment, around 63 percent of credit decisions are already made on the basis of averages rather than individual data. From a risk management perspective, this is a highly uncertain basis for a sound assessment of company-specific ESG risks.
data availability remains the Achilles heel
The study confirms that missing or unreliable ESG data remains the biggest operational hurdle, especially in the SME segment. 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. What is striking here is the perception gap between management and the operational level: while those responsible for the area consider the deficits to be critical, top management views the issue as significantly less urgent.
Large institutions with total assets of over €30 billion already take ESG risks into account in 40 percent of their lending decisions, while smaller institutions with total assets of less than €1 billion only reach 22 percent. However, smaller institutions plan to partially make up this shortfall by the end of 2027 and increase their rate to an average of 30 percent.
60 percent continue to see ESG as a business opportunity – despite political headwinds
Despite increasing political controversy and regulatory uncertainty, 60 percent of the experts surveyed continue to view sustainable finance as a business opportunity. This figure is virtually unchanged from the previous year. Cooperative banks are particularly optimistic at 62 percent, while private institutions, at 48 percent, tend to fear the additional expense. The assessment of transition risks has also shifted: 64 percent of respondents currently consider their relevance to be declining – a view that is consistent with that of BaFin, but stands in stark contrast to that of the European Central Bank.
ESG scoring is becoming established as the standard
Nevertheless, the integration of ESG criteria into bank management is progressing: 86 percent of respondents already use ESG scoring or plan to use it within two years. However, these scores only directly influence the credit margin for around 30 percent of respondents – with significantly higher relevance for large institutions (45 percent) than for smaller ones. The collection of necessary data remains fragmented: large institutions primarily rely on their own customer advisors, while smaller ones rely on questionnaires and external service providers.
“The study shows that ESG data has long since become a central component of risk management, meaning it is not only necessary for regulatory purposes, but also relevant from a business perspective,” says Michael Sindram, Managing Director of openESG GmbH. “Despite regulatory uncertainties, banks are integrating the topic into their practices with pragmatic approaches. This impressively confirms the relevance of these comparatively new ESG risk drivers.”
Impact of ESG scores and omnibus legislation on banks' lending practices
Source: ESG Data Monitor 2025 press release