The Danish Financial Supervisory Authority has published a memorandum summarising good practices for how credit institutions should organise governance and risk management for environmental, social and governance (ESG)-related risks, in preparation for European Banking Authority guidelines that take effect in January 2026. The memorandum draws on a review carried out in the fourth quarter of 2024 of ESG risk governance in large Danish banks and mortgage credit institutions, followed by supervisory dialogue with the reviewed firms and other institutions, focusing on current activities and implementation plans for EBA/GL/2025/01. It highlights the need to embed ESG factors into existing risk management by monitoring external trends that create new and emerging risks, managing risks over short, medium and long horizons, strengthening the identification and collection of relevant data, and establishing plans for any transition in risk-taking and risk profile within a coherent and proportionate approach that is continuously improved. It also reiterates that institutions’ policies must include guidance on ESG-related risks under the Danish executive order on management and governance of credit institutions and others.
Danish Finanstilsynet 2025-09-22
Danish Financial Supervisory Authority publishes good practice observations on ESG risk governance for credit institutions ahead of EBA guidelines
The Danish Financial Supervisory Authority released a memorandum on best practices for credit institutions' governance and risk management of ESG-related risks, ahead of European Banking Authority guidelines effective January 2026. Based on a 2024 review of large Danish banks, it emphasizes integrating ESG factors into risk management, monitoring external trends, and improving data collection, while aligning policies with the Danish executive order on credit institutions' management and governance.