peekpublishersTLDR: The European Banking Authority (EBA) has published proposed guidelines for financial institutions to assess and manage risks related to environmental, social, and governance (ESG) factors and the transition to a climate-neutral economy. The EBA’s guidelines require institutions to have effective risk management processes in place to address the impact of ESG factors on financial exposure. The proposals come as the EU pushes for net-zero carbon emissions by 2025, with the EBA indicating that various ESG factors, such as climate change and social conflict, pose significant challenges to the economy and financial sector.
The EBA is accepting public comments on its proposed guidelines until April 18, 2024. The guidelines build on previous actions taken by the EBA to transition EU institutions to net-zero, including collecting ESG data and implementing the EU Climate Law. The guidelines are part of a broader trend of regulators addressing climate change and sustainability in the financial sector and reflect the increasing expectations for financial institutions to assess and report on ESG risks.
