FIN.

EBA report: management and supervision of ESG risks for credit institutions and investment firms

The EBA has published its Report on Environmental, Social and Governance (ESG) risks management and supervision.

The report provides institutions with common definitions of ESG risks and their transmission channels and identifies the evaluation methods required for effective risk management.

The report, which is a key component of the EBA’s broader ESG work, provides a comprehensive proposal on how ESG factors and ESG risks should be included in the regulatory and supervisory framework for credit institutions and investment firms.

The report recommends integrating ESG risks into business strategies, governance and risk management and sets the foundations for future EBA guidelines on the topic.

Hannah Frost