The consultation paper focuses on counterparty risks and climate change impacts for European investment firms and credit institutions.
The European Banking Authority (EBA) has published a new consultation paper in preparation for its final report on ESG risk management and supervision of investment firms and credit institutions.
Providing comprehensive proposals on how ESG factors and risks could be better included in the business models, governance, risk management, and supervisory frameworks for credit institutions and investment firms, the paper identifies common definitions of ESG risks and provides an overview of current evaluation methods.
The consultation paper follows the release of the EBA’s ‘Action Plan on Sustainable Finance’ last December, which outlines the authority’s deliverables and activities related to ESG factors and risks. The EBA’s actions are in line with the European Commission’s broader action plan, which calls on all three European Supervisory Authorities for the finance sector to provide guidance on how sustainability considerations can be effectively taken into account in relevant EU financial services legislation and help to identify existing gaps.
The consultation paper assesses both qualitative and quantitative criteria in regard to ESG risks in the short, medium and long term and elaborates on the … [continues]
Read the full article on Regulation Asia’s sister publication, ESG Investor.