Featured Product

    ECB Consults on Guide for Managing Climate and Environmental Risks

    May 20, 2020

    ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy. The guide also outlines how ECB expects banks to become more transparent by enhancing their climate-related and environmental disclosures. The consultation on this guide ends on September 25, 2020. ECB expects that comments on this consultation document will provide valuable input for the finalization of the guide, which it then intends to also use in the supervisory dialog.

    The guide aims to raise industry awareness of climate-related and environmental risks and to improve the management of such risks. The guide explains that ECB expects significant banks to use (stress) scenarios to assess if climate-related and environmental risks are material with regard to their business strategy and to inform their decisions. Furthermore, ECB expects institutions with material climate-related and environmental risks to evaluate whether their bank-internal stress testing is appropriate, with a view to incorporating those risks in their baseline and adverse scenarios. ECB wants banks to account for these risks, given that they drive existing prudential risk categories and can substantially impact the real economy and banks. Banks are expected to assess whether their current practices are safe and prudent in the light of the expectations and, if necessary, to start adapting them. 

    The guide was drafted in close cooperation with the national competent authorities to ensure that high supervisory standards are applied consistently across the euro area. It also draws on the experience gained from assessing banks’ current practices and their approaches to climate-related and environmental risks. The guide is designed to fit within the boundaries of applicable EU and national law. It aims to foster banks’ preparedness for managing climate-related and environmental risks under current prudential rules, in accordance with the EC Action plan on financing sustainable growth and the EBA Action plan on sustainable finance. ECB acknowledged that banks face significant challenges as a consequence of the COVID-19 pandemic. While the immediate attention of ECB is on the pandemic, it remains committed to further advancing the management and disclosure of climate-related and environmental risks in the banking sector.

     

    Related Links

    Keywords: Europe, EU, Banking, ESG, Sustainable Finance, Climate Change Risk, Disclosures, Stress Testing, CRD, Basel, ECB

    Featured Experts
    Related Articles
    News

    EC Regulation Sets Out Standards for Reporting and Disclosure of MREL

    EC published the Implementing Regulation 2021/763 that lays down implementing technical standards for supervisory reporting and public disclosure of the minimum requirement for own funds and eligible liabilities (MREL).

    May 12, 2021 WebPage Regulatory News
    News

    APRA Decides to Standardize Submission Date for Quarterly Reporting

    APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.

    May 11, 2021 WebPage Regulatory News
    News

    ECB Working Group Publishes Recommendations on EURIBOR Fallbacks

    The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).

    May 11, 2021 WebPage Regulatory News
    News

    Bundesbank Publishes Supporting Documentation for Reporting by Banks

    Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.

    May 11, 2021 WebPage Regulatory News
    News

    EBA Publishes Phase 1 of Reporting Framework 3.1

    EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).

    May 10, 2021 WebPage Regulatory News
    News

    APRA to Finalize Capital Adequacy Standard Revisions by January 2022

    Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA

    May 10, 2021 WebPage Regulatory News
    News

    ESMA Issues Guidelines on Outsourcing to Cloud Service Providers

    ESMA published the final guidelines on outsourcing to cloud service providers.

    May 10, 2021 WebPage Regulatory News
    News

    EBA Publishes Data on Deposit Guarantee Schemes

    EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.

    May 10, 2021 WebPage Regulatory News
    News

    OSFI Sets Out Plan for Future Guidance on Managing Technology Risk

    OSFI has set out the schedule for release of draft guidance on the management of technology risks by federally regulated financial institutions and private pension plans.

    May 10, 2021 WebPage Regulatory News
    News

    MAS Updates Housing Loan Rules, Proposes Corporate Governance Guidance

    MAS updated rules for new housing loans by banks and finance companies.

    May 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6964