The European Banking Authority (EBA) recommended, on Monday1 March, that banks publish a green asset ratio to show the extent to which their activities are considered environmentally sustainable in line with the EU taxonomy on sustainable finance.
The European Commission had asked the three European financial supervisory authorities to provide it with an opinion on the key performance indicators and methodology that companies should use to disclose information on the alignment of their activities with the European Taxonomy.
In its opinion, the EBA stresses the importance of the green asset ratio which is, in its view, the key to understanding how banks finance sustainable activities and meet the objectives of the Paris Agreement. This ratio should determine, on total assets, the percentage of loans, advances and debt securities deemed to be environmentally sustainable.
On the same day, the European Securities and Markets Authority (ESMA) also published its opinion, in which it clarifies the definitions that should be used for the calculation of key performance indicators covering turnover, equity and operations.
For its part, the European Insurance and Occupational Pensions Authority (EIOPA) proposes to measure the proportion of the insurer’s investments in relation to total investments that are intended to finance economic activities considered environmentally sustainable in the EU taxonomy and to look at the proportion of non-life gross premiums that correspond to these activities.
See the opinions of the EBA: https://bit.ly/3b6TZ0p; ESMA: https://bit.ly/2MDmWHO; and EIOPA: https://bit.ly/3q5n3cH (Original version in French by Marion Fontana)