The European Banking Authority, together with the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority, has launched a public consultation on draft Joint Guidelines on ESG stress testing. The draft guidance sets out how banking and insurance competent authorities should integrate environmental, social and governance risks when conducting supervisory stress tests, with the aim of harmonising approaches across the EU while ensuring proportionality. The draft Guidelines propose a common framework for ESG-related stress testing methodologies and standards, covering the design and key features of stress tests with ESG elements and the organisational and governance arrangements expected to support them. This includes expectations around human resources and expertise, data collection and management systems to access high-quality ESG data, and appropriate timelines for scenario analysis, while accommodating future methodological and data developments. The guidance is addressed to competent authorities and does not introduce new requirements for them to carry out ESG-focused supervisory stress tests. Feedback is requested via an online survey by 19 September 2025, with responses to be published on the ESAs’ websites unless otherwise requested. An online public hearing is scheduled for 26 August 2025 from 10:00 to 12:00 CEST.
European Banking Authority 2025-06-27
European Banking Authority and other ESAs launch consultation on joint guidelines for integrating ESG risks into supervisory stress tests
The European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority have initiated a public consultation on draft Joint Guidelines for ESG stress testing. The guidelines aim to harmonize supervisory stress test approaches across the EU by integrating environmental, social, and governance risks, proposing a common framework for methodologies and standards. The guidance targets competent authorities without imposing new requirements for conducting ESG-focused stress tests.