Sustainable finance

Sustainable finance aims at integrating Environmental, Social or Governance (ESG) criteria into financial services, and at supporting sustainable economic growth. It also aims at increasing financial actors' awareness and transparency about the need to mitigate ESG risks via an appropriate management, considering in particular the longer-term nature of such risks and the uncertainty on their valuation and pricing.

In March 2018, the European Commission published its Action plan on Financing Sustainable Growth, setting an EU strategy on sustainable finance and a roadmap for future work across the financial system. On the back of this plan, the EBA prepared its own work plan and identified its key priorities. These include considerations on how ESG can be incorporated into the regulatory and supervisory framework of EU credit institutions. The EBA also has an important role in monitoring  market practices related to sustainability, and engaging with relevant stakeholders and the industry.

The sections below include relevant news and events related to the EBA's involvement in sustainable finance as well as any publication on this topic.

 

News and events

  • In June 2018, to advance the work on sustainable finance, the European Commission has set up a Technical Expert Group (TEG) and the EBA is a member of the group. The role of the TEG is to assist the Commission in the development of a unified classification system for sustainable economic activities ("EU Taxonomy"), an EU green bond standard, methodologies for climate benchmarks and disclosures for benchmarks, and to provide guidance to improve corporate disclosure of climate-related information.

    On 18 June 2019, the TEG on sustainable finance published three new reports:

    - Report on the EU taxonomy
    - Report on an EU Green Bond Standard
    - Interim report on climate benchmarks and benchmarks' ESG disclosures

    The Commission has also published the new guidelines for companies on how to report climate-related information. These guidelines are built on the proposals made by the TEG in January 2019.

    To accompany these reports and provide a venue for an open exchange with stakeholders, the Commission organised a Stakeholder dialogue on sustainable finance on 24 June 2019. The event also featured a session on the future of sustainable finance, with the ESAs participation. Click here to access the video of the event.

  • On 4 April 2019, the EBA and the European Banking Federation held a workshop on sustainable finance. This workshop highlighted the willingness of EU supervisors, regulators and banks to move forward on the various challenges related to sustainable finance and engage in a structured dialogue for incorporating sustainability into EU banks' frameworks and risk management.

    Click here to access the agenda.
    Click here to access the presentations.
    Click here to access the summary.

  • In December 2018, the EBA joined the Network for Greening the Financial System (NGFS) , i.e. a network of central banks and supervisors whose purpose is to help strengthen the global response required to meet the goals of the Paris agreement  and to enhance the role of the financial system to manage environmentally and climate-related risks.

    Click here to access the NGFS website.
    Click here to access the first NGFS comprehensive report.