The European Banking Authority has issued its final Guidelines on the management of environmental, social and governance (ESG) risks, setting requirements for how institutions identify, measure, manage and monitor ESG risks and how they should use plans to support resilience over the short, medium and long term. The Guidelines specify internal processes and ESG risk management arrangements expected under the Capital Requirements Directive (CRD6) and set out the required content of institutions’ plans to monitor and address financial risks stemming from ESG factors, including those linked to the transition towards the EU objective of climate neutrality by 2050. These plans should be consistent with transition plans prepared or disclosed under other EU legislation. The Guidelines apply from 11 January 2026, with small and non-complex institutions required to apply them at the latest from 11 January 2027. They are issued under Article 87(a)5 of the Capital Requirements Directive and are expected to be complemented by separate Guidelines on ESG scenario analyses.
European Banking Authority 2025-01-09
European Banking Authority publishes final ESG risk management Guidelines with phased application from January 2026
The European Banking Authority has released final Guidelines on managing environmental, social, and governance (ESG) risks under the Capital Requirements Directive (CRD6). These Guidelines outline processes for identifying, measuring, managing, and monitoring ESG risks, specifying plans to address financial risks related to ESG factors, aligning with the EU's climate neutrality goals by 2050. They take effect on 11 January 2026, with small and non-complex institutions required to comply by 11 January 2027.