18.02.2025
EBA published its Guidelines on the management of ESG risks
The European Banking Authority has published its final Guidelines to support institutions in managing ESG risks, aiming to enhance financial stability and resilience.
On 9 January 2025 the European Banking Authority (EBA) published its final Guidelines on the management of Environmental, Social and Governance (ESG) risks. The Guidelines set out requirements for institutions for the identification, measurement, management and monitoring of ESG risks, including through plans aimed at ensuring their resilience in the short, medium and long term.
The Guidelines specify requirements regarding the internal processes and ESG risk management arrangements that institutions should have in place in accordance with the Capital Requirements Directive (CRD VI).
The Guidelines specify the content of plans to be prepared by institutions with a view to monitoring and addressing the financial risks stemming from ESG factors, including those arising from the adjustment process towards the objective of achieving climate neutrality in the EU by 2050. These plans will support the preparedness of institutions for the transition and should be consistent with transition plans prepared or disclosed by institutions under other pieces of EU legislation.
The Guidelines will apply from 11 January 2026 except for small and non-complex institutions for which the Guidelines will apply at the latest from 11 January 2027.
The Guidelines are based on Article 87(a)5 of the CRD. They will be complemented by Guidelines on ESG scenario analyses. The Guidelines on the management of ESG risks have been developed in line with the EBA’s roadmap on sustainable finance and as part of the EBA actions outlined in the roadmap on the implementation of the EU banking package.
Leaseurope contributed to the development of the EBA Guidelines ensuring that the new rules take into account the high expertise on the asset management by lessors. In our communications with the EBA we highlighted the importance of leasing for the financing of the green transition and the role of the leased asset to mitigate environmental risks.
The final EBA Guidelines consider our main messages which include the instrumental role of leasing in the green transition, the strong risk management techniques applied by our industry to manage asset risks including climate related risks, and the importance of not adding additional reporting burden to SMEs that are seeking financing through leasing.
