The Organisation for Economic Co-operation and Development has developed a nonbinding supervisory framework for De Nederlandsche Bank to assess prudential risks arising when financial institutions’ activities and transition progress are misaligned with their net-zero commitments. The framework focuses on material economic sectors and combines quantitative assessment of emissions alignment and financial exposures with qualitative review of governance, transition planning, risk management, internal controls and engagement practices. Based on disclosures from 43 Dutch and other European financial institutions, the report finds that fragmented requirements and uneven data quality limit comparison across banks, pension funds and insurers. Large banks provide the most decision-useful information through sector-level disclosures, while pension funds and insurers rely mainly on portfolio-level measures. Supervisors should prioritize physical emissions-intensity metrics that can be compared with sector-specific net-zero pathways, using financed emissions, exposure size, maturity and credit quality to assess potential materiality. Weighted average carbon intensity can support screening where physical metrics are unavailable, but cannot directly demonstrate pathway alignment and may be distorted by valuation, inflation and exchange-rate effects. Internal supervisory holdings and exposure data can partly close public-reporting gaps, particularly for pension funds and insurers, but remain dependent on the quality of emissions and activity data. Where quantitative information is incomplete or unreliable, the framework places greater weight on transition plans, governance and risk-management controls.

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