The European Insurance and Occupational Pensions Authority, together with the European Banking Authority and the European Securities and Markets Authority, launched a public consultation on draft Joint Guidelines on ESG stress testing mandated under the Capital Requirements Directive and Solvency II. The draft Guidelines set out how banking and insurance competent authorities should integrate environmental, social and governance risks into supervisory stress tests, with the aim of harmonising approaches, supporting proportionality and improving the effectiveness and efficiency of ESG stress testing. The Joint Committee’s draft establishes a common EU framework for developing ESG-related stress testing methodologies and standards, covering both the design and features of tests with ESG elements and the related organisational and governance arrangements. Expectations include adequate staffing with relevant expertise, data collection and management systems that enable access to high-quality ESG data, and appropriate timelines for scenario analysis, with the framework intended to accommodate future methodological and data improvements. The Guidelines are addressed to competent authorities and do not introduce new requirements for them to carry out supervisory stress tests focused on ESG risks. Feedback is requested via an online survey by 19 September 2025, with responses published on the ESAs’ websites unless confidentiality is requested. An online public hearing is scheduled for 26 August 2025, and the ESAs are mandated to develop the Joint Guidelines by 10 January 2026.
European Insurance and Occupational Pensions Authority 2025-06-27
European Insurance and Occupational Pensions Authority and other ESAs launch consultation on joint guidelines for ESG supervisory stress testing
The European Insurance and Occupational Pensions Authority, European Banking Authority, and European Securities and Markets Authority have launched a public consultation on draft Joint Guidelines for ESG stress testing under the Capital Requirements Directive and Solvency II. These Guidelines aim to harmonize the integration of environmental, social, and governance risks into supervisory stress tests across the EU, focusing on methodology, governance, and data management. The draft seeks to enhance the effectiveness and efficiency of existing practices without imposing new requirements for ESG-focused stress tests.