The European Banking Authority (EBA) has launched a public consultation on its draft ‘Guidelines for Environmental, Social, and Governance (ESG) Scenario Analysis’. This initiative aims to provide financial institutions with a framework for adopting forward-looking approaches to assess their resilience to ESG-related risks, including climate change and social governance challenges. The consultation is open until 16 April 2025, inviting feedback from stakeholders across the financial sector.
ESG factors—such as climate change, environmental degradation, and social issues—are increasingly impacting the global economy and, by extension, financial institutions. These risks, particularly environmental ones, arise from transition and physical factors that challenge the risk profiles and sustainability of business models.
To address these challenges, the EBA’s draft Guidelines outline principles for testing financial resilience, including capital and liquidity, against ESG shocks. Also, it aims at evaluating the sustainability of business models in scenarios such as the EU’s goal of achieving climate neutrality by 2050. It will also support institutions in making informed decisions in a rapidly evolving economic and environmental landscape.
These Guidelines build upon the EBA Guidelines on the Management of ESG Risks, published on 9 January 2024, and further the EBA’s commitment to sustainable finance.
The stakeholders can contribute to the consultation process via EBA’s official consultation page. Feedback can be submitted until 16 April 2025, and all responses will be considered when finalising the Guidelines. Contributions will be published after the consultation period unless confidentiality is requested.
To engage with the EBA, interested participants can also join a virtual public hearing on 17 March 2025, from 14:30 to 16:00 CET.
The draft Guidelines align with the EBA’s Roadmap on Sustainable Finance and are part of its efforts to implement the EU banking package. Alongside the earlier Guidelines on the Management of ESG Risks, this initiative addresses mandates outlined in Article 87(a)5 of the Capital Requirements Directive (CRD6), Directive 2013/36/EU.
This consultation represents a critical opportunity for stakeholders to shape how ESG risks are integrated into the financial sector. As the EU continues its journey towards sustainability and climate neutrality, active engagement will ensure that the guidelines are both practical and effective in supporting institutions’ resilience.
