Europe wants to monitor and analyse every citizen from day to day and maybe has justifiable reasons to do so (sometimes this is outsourced to companies). Yet the question is whether collecting all this detailed financial data, also called ‘microdata’ or ‘granular data’, is wise.

Household data in the Taxonomy Disclosures Delegated Act
An example of financial microdata can be found in a delegated act by the European Commission in the field of sustainable finance, the so-called Taxonomy Disclosures Delegated Act [1]. According to this act credit institutions, like banks, have to provide a ‘Green asset ratio for retail exposures‘ to the Commission [2]. The following types of microdata are mentioned:

• the retail lending portfolio, in particular the mortgage lending portfolio;
• residential real estate or house renovation loans;
• credit consumption loans for car loans.

EBF: taxonomy data from retail clients are not available or cannot be documented
Recently the European Banking Federation (EBF) in response to a consultation on amendment of the Taxonomy Disclosures Delegated Act commented that it is not practically possible to provide the requested Green asset ratios (GARs) on households (‘retail clients’):

While no reporting is going to be required from and on midcaps, banks are still expected to collect EU Taxonomy data from retail clients (mortgage, car loans etc.), including on DNSH and MS which, in most instances are not available or cannot be documented by the retail customers.

EBF asks to remove retail exposures from the GARs.

More information:
read my articles on microdata for Europe, microdata & AFM and DNB and microdata in general.

Notes:

[1] Taxonomy Disclosures Delegated Act, Commission Delegated Regulation (EU) 2021/2178.
[2] See paragraph 1.2.1.3. of the delegated act. According to paragraph 1.2.1.6. of the delegated act there will be the following green asset ratios (GARs) based on household data:

(c) GAR for residential real estate exposures, including house renovation loans, for the objectives of climate change mitigation, climate change adaptation, and circular economy;
(d) GAR for retail car loans, for the objective of climate change mitigation;