EU bank regulators release stricter ESG guidelines (2025)
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The European Banking Authority released new guidance last week outlining additional measures for banks to assess their climate risks.
The guidelines highlight the increasing divide between American and European banks. While American banks continue to leave net-zero organizations and have moved away from ESG approaches, European regulators are promoting increased ESG financial considerations.
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'ESG risks, in particular environmental risks through transition and physical risk drivers, pose challenges to the safety and soundness of institutions and may affect all traditional categories of financial risks to which they are exposed,' the European Banking Authority said in a statement on Thursday. Banks should employ scenarios to identify, prepare for and mitigate potential risks from individual exposures as well as at a portfolio level and across industrial sectors, the EBA said. Particular consideration should be given to the fossil fuel industry, and measures should include quantitative targets for financed emissions. … Regulators and policymakers in Europe have been tightening requirements for disclosing and preparing for potential ESG risks. In its new guidelines, which have been months in the making, the EBA said banks should look at least 10 years into the future, assess customers’ dependency on fossil fuels, and review their net zero transition plans.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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