The EBA guidelines require EU financial institutions to integrate ESG risks into governance, risk management frameworks, and strategy. By January 11, 2026 (2027 for small institutions), they must adopt methodologies to measure, monitor, and manage ESG risks across credit, market, operational, and liquidity domains. Materiality assessments and transition plans must align with the EU’s climate neutrality goals by 2050. Robust data collection processes, internal training, and capital and liquidity adequacy measures are required to mitigate ESG vulnerabilities and comply with EU sustainability directives.
Source: ESGNews
