EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks. The survey aims to support the policy work of EBA on Pillar 3 disclosures and its wider efforts to develop a robust policy framework in the area of sustainable finance. The survey is addressed to institutions that will be required to disclose prudential information on ESG risks as per Article 449a of Capital Requirements Regulation (CRR). The inputs can be provided until October 16, 2020.
The survey consists of three parts:
- General questions on the current status of ESG disclosure. This part includes general questions on ESG issues. For the environmental aspects, the questions cover several initiatives such as the EBA action plan on sustainable finance, EU Taxonomy, and the non-binding guidelines of EC on reporting of climate-related information.
- Questions on the interaction between Pillar 3 disclosures and policy initiatives. The focus of these questions is the interaction of institutions’ current practices with other policy initiatives such as the non-financial reporting directive (NFRD) and the non-binding guidelines of EC on non-financial information, including the supplement on climate-related reporting.
- Forward-looking questions on the implementation of upcoming disclosure requirements under CRR. These questions focus exclusively on climate change, including transition and physical risks, and cover aspects on exposure classification, metrics, and data availability.
The feedback to the survey will be used to inform and support the development of the implementing technical standards on Pillar 3 disclosures on ESG risks. The disclosure of information on ESG risks is one of the key components in the policy framework for sustainable finance. The survey will help EBA to understand the type of actions institutions are implementing following the policy messages and expectations on disclosures included in the EBA action plan on sustainable finance (published in December 2019), including the disclosure of a green assets ratio. In parallel, ESAs are preparing to launch a joint survey seeking public feedback on presentational aspects of financial products that promote environmental and/or social characteristics or have a sustainable objective.
Keywords: Europe, EU, Banking, ESG, Climate Change Risk, Disclosures, Pillar 3, CRR, Sustainable Finance, Reporting, NFRD, Basel, EBA
Previous ArticleRBNZ Releases Results of COVID-19 Stress Test on Largest Banks
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.