The EBA publishes its final Guidelines on the management of ESG risks

The European Banking Authority (EBA) today 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 (CRD6). They will contribute to ensuring the safety and soundness of institutions as ESG risks intensify and the EU transitions towards a more sustainable economy.

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.

Legal basis and background

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.