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

27 November 2020, Frankfurt:

• ECB publishes final guide after considering comments from public consultation
• Banks to perfom self-assessment on ECB expectations in early 2021
• ECB to fully review bank's practices in 2022
• Next supervisory stress test in 2022 to also focus on climate-related risks
• Separately, new ECB report shows that bank's climate-related and environmental risk disclosures lag behind significantly

The European Central Bank (ECB) today published it's final and amended guide on climate-related and environmental risks following a public consultation. The guide explainshow the ECB expects banks to prudently manage and transparently disclose such risks under current prudential rules.

The ECB will now follow up with banks in two concrete steps. In early 2021 it will ask banks to conduct a self-assessment in light of the supervisory expectations outlined in the guide and to draw up action plans on that basis. The ECB will then benchmark the banks' self-assessments and plans, and challenge them in the supervisory dialogue. In 2022 it will conduct a full supervisory review of banks' practices and take concrete follow-up measures where needed.

The guide will apply immediately.

You can download the guide here.

Access the ECB press release.