On January 18th, the European Banking Authority (EBA) published a draft of the Guidelines for the management of environmental, social, and governance (ESG) risks. These guidelines establish requirements that credit institutions must integrate into their processes for the identification, measurement, management, and monitoring of such risks.
Given the constant challenges posed to the economy by ongoing climate, environmental, and social changes, impacting the financial sector, it’s necessary to ensure the safety and resilience of institutions in the short, medium, and long term.
The draft – in line with the EBA’s sustainable finance roadmap of December 2022 – outlines principles for the development and content of institution plans to adequately monitor and address financial risks related to ESG factors. This includes risks arising from adjustment processes aimed at achieving climate neutrality in the UE by 2050.
The public consultation will run until April 18, 2024, during which observations can be submitted through the dedicated link on the Authority’s website.