Legal & Regulatory News

ECB publishes final guide on climate-related and environmental risks for banks

27 November 2020

The European Central Bank (ECB) has published its final guide (the Guide) on climate-related and environmental risks following a public consultation earlier this year. The Guide, which is not legally binding, explains how the ECB expects banks to prudently manage and transparently disclose such risks under current prudential rules. The Guide will apply immediately.

Following the publication of the Guide, the ECB intends to:

  • ask banks to conduct a self-assessment in light of the supervisory expectations outlined and to draw up action plans on that basis in early 2021;
  • conduct a full supervisory review of banks’ practices and take concrete follow-up measures where needed in 2022; and
  • conduct its next supervisory stress test in 2022 on climate-related risks.

The ECB has also published a report on institutions’ climate-related and environmental risk disclosures, which finds that banks are lagging behind. The ECB intends to identify remaining gaps and discuss these with banks in the second half of 2021.

Click here to access the Guide.

Click here to access the report.