EBA consults on ITS for ESG disclosures

2021/03/01 

The European Banking Authority (EBA) launched a consultation (to run until 1 June 2021) on draft implementing technical standards (ITS) on Pillar-3 disclosures on environmental, social and governance (ESG) risks according to Art. 434a of the Capital Requirements Regulation (CRR) in accordance with Part Eight of the CRR. The ITS were developed considering the recommendations of the Financial Stability Board Task Force on Climate-related Financial Disclosures (FSB-TCFD), the European Commission’s (EC’s) non-binding guidelines on climate-change reporting, the EU Taxonomy, and the EBA’s advice to the EC on disclosures under Article Eight of the Taxonomy Regulation. They propose

• comparable quantitative disclosures on climate-change related transition and physical risks, including information on exposures towards carbon-related assets and assets subject to chronic and acute climate-change events;
• quantitative disclosures on institutions’ mitigating actions to support counterparties in the transition to a carbon-neutral economy and in the adaptation to climate change;
• a green-asset ratio (GAR), which identifies institutions’ asset financing activities that are environmentally sustainable according to the EU taxonomy, such as those consistent with the European Green Deal and the Paris agreement goals; and
• qualitative information on how institutions are embedding ESG considerations in their governance, business model and strategy, and risk management framework.