The European Banking Authority (EBA) has published its final guidelines on the management of ESG risks, aimed at ensuring that financial institutions develop robust governance, risk management, and strategic planning frameworks to address environmental, social, and governance (ESG) risks. These guidelines represent a critical step in the EU’s efforts to align the financial sector with the European Green Deal, achieving sustainability objectives such as net-zero emissions by 2050, as set out in Regulation (EU) 2021/1119.
Continue reading for an overview of the guidelines’ key takeaways, timelines, scope of applicability, and practical implications for banks, referencing critical components such as the role of materiality assessments, plans under Article 76(2) of Directive 2013/36/EU, and methodologies for ESG risk measurement.