EBA Releases Sustainable Finance Roadmap
The European Banking Authority (EBA) has released a roadmap for sustainable finance in the next three years to explain EBA’s follow-up measures and planned tasks in ESG. This roadmap is the second version released by EBA. The first version was released in December 2019 (planning from 2020 to 2022). Compared with the previous roadmap, it has more content and wider coverage.
EBA’s plan for sustainable finance mainly includes three aspects: market discipline, supervision and prudential requirements. Specifically, it can be divided into five aspects:
- Establish transparent rules and market rules for ESG matters;
- Robust supervision and management of ESG related risks;
- Reassess ESG disclosures on the principle of prudence;
- Formulate ESG standards and solve the problem of green bleaching;
- Continuous supervision by means of stress testing and scenario analysis;
Eight Goals of EBA Sustainable Finance
EBA has set eight goals in the roadmap, namely:
- Transparency and disclosures: establish information access standards and market rules;
- Risk management and supervision: incorporating ESG factors into the regulatory framework;
- Prudential treatment of exposures: improve the identification and improvement of ESG factors;
- Stress testing: introduce ESG into the bank’s stress test, especially the climate test;
- Standards and labels: develop evaluation methods for sustainable financial products;
- Greenwashing: analyze the phenomenon of greening in detail and propose solutions;
- Supervisory reporting: establish an integrated reporting system for ESG factors;
- ESG risks and sustainable finance monitoring: continuous tracking of the development of ESG and sustainable finance;
For each objective, EBA lists the current work progress and plans for the next three years. EBA also announces that it will work with several other European financial regulators to jointly formulate relevant requirements on important issues.
References:
The EBA publishes its roadmap on sustainable finance | European Banking Authority (europa.eu)
