After the European Taxonomy and the non-financial reporting directive (NFRD), the EBA is moving a step forward in its action plan on sustainable finance. Until the 16th of October, the market participants can answer a survey to develop draft implementing technical standards (ITS) on Pillar 3 disclosure of prudential information on ESG risks.
A very welcomed initiative in order to define specific metrics, including a green assets ratio, that provide transparency on how they are embedding climate change related risks into the organisation. We are glad to observe a trend to implement uniform disclosure format to collect comparable and comprehensive information. It will allow market participants to include ESG metrics in their risk profile alongside with the risk measures covered by Pillar 3 requirements.
In this trend, the regulator is filling its promise made 2 years ago to promote awareness and reinforce market discipline on the ESG topic. A very welcome move that feed our expectation regarding the metrics that will be expected to be applied!
News of the EBA
Final draft of the ITS
Link of the survey