EBA – Sector inquiry on classification techniques of ESG risks exposures

On January 29th, the European Banking Authority (EBA) launched an inquiry to gather feedback from credit institutions regarding their current techniques for classifying exposures to environmental, social and governance (ESG) risks, to assess the feasibility of introducing a standardized methodology.

In accordance with Article 501-quater of Regulation (EU) no. 575/2023, as amended based on the provisional agreement between the European Parliament and Council of the EU, the Authority must evaluate:

  • Availability and accessibility of reliable and consistent ESG data;
  • Feasibility of introducing a general methodology to identify and qualify ESG risks and related credit exposures, based on a common set of principles for ESG risk classification, using:
  • Information on transition and physical risk indicators;
  • Indications and conclusions from supervisory stress tests or scenario analysis of climate-related financial risks;
  • Relevant ESG score from the credit risk rating of External Credit Assessment Institutions (ECAI).

Institutions wishing to participate in the inquiry should contact the EBA at the email address esg-risks-classification@eba.europa.eu, which will provide access to the survey.
The deadline for participation is set for March 29, 2024.