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

    BoE Seeks Information Before Migrating Statistical Reporting to BEEDS

    The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.

    October 25, 2021 WebPage Regulatory News
    News

    FCA Publishes Final Rules on Investment Firms Prudential Regime

    The Financial Conduct Authority (FCA) published the final rules on the Investment Firms Prudential Regime (IFPR) to streamline and simplify the prudential requirements for solo-regulated UK firms authorized under the Markets in Financial Instruments Directive (MiFID).

    October 25, 2021 WebPage Regulatory News
    News

    CFRF Publishes Guides to Manage Financial Risks from Climate Change

    The working groups of the Climate Financial Risk Forum (CFRF) published a second round of guides (or Session 2 guides), written by the industry for the industry, to help financial firms manage climate-related financial risks.

    October 21, 2021 WebPage Regulatory News
    News

    PRA Finalizes Policy for Non-Performing Exposure Securitizations

    The Prudential Regulation Authority (PRA) published the final Policy Statement PS24/21 that contains the new Non-Performing Exposures Securitization Part of the PRA Rulebook and an updated Supervisory Statement SS10/18 on the general requirements and capital framework with respect to securitizations.

    October 21, 2021 WebPage Regulatory News
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    EU to Explore Potential of Establishing a Joint Cyber Unit

    The European Council adopted conclusions inviting the European Union (EU) and the member states to further develop the cybersecurity crisis management framework.

    October 19, 2021 WebPage Regulatory News
    News

    EC Sets Out Work Program for 2022

    The European Commission (EC) adopted the work program for 2022.

    October 19, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7598