The European Banking Authority (EBA) presented, on Friday 6 December, an action plan detailing its approach to sustainable finance, following the European Parliament/EU Council agreement on taxonomy in this area (see EUROPE 12384/2 and 12385/9).
Climate change has " led to an increasing relevance of environmental, social and governance (ESG) factors for financial markets", the EBA said in a statement.
The European authority encourages financial institutions to incorporate these factors into their strategies in order to identify the risks inherent in them and to monitor their evolution through ratios (i.e. 'green asset ratio'). It will also work on the publication of data on these issues by investors.
In the medium to long term, the EBA intends to develop a stress test dedicated to climate change and will analyse the opportunity to introduce a prudential treatment of green exposures.
See the action plan: http://bit.ly/2DQfH79 (Original version in French by Mathieu Bion)