The EBA has released its final Environmental Scenario Analysis Guidelines under CRD/CRR, strengthening how institutions assess environmental risks within ESG frameworks.
Key points:
✅ EU-wide consistency in environmental scenario analysis;
✅ Integration of climate and environmental risks into stress testing;
✅ Clear distinction between short-term stress tests and long-term resilience analysis;
✅ Proportionate expectations based on institutions’ size and risk exposure.
Effective 1 January 2027, the Guidelines expand the 2024 ESG framework and set clearer expectations—especially for IRB institutions—on analysing transition and physical risks across different time horizons.
👉 Continue reading to find out the implementation steps and supervisory expectations.