The European Banking Authority (EBA) has published revised Guidelines on product oversight and governance (POG) for retail banking products, explicitly targeting greenwashing risks. The updated regulatory framework clarifies the requirements for retail financial products that feature environmental, social, and governance (ESG) components when offered or sold to consumers.
The revised framework aims to ensure that financial institutions apply robust standards throughout the design and distribution phases of ESG-related retail products. The amendments are intended to reduce the risk of consumers being misled or sold financial products that do not align with their requirements.
Targeted amendments have been integrated into several key sections of the guidelines to make ESG and greenwashing considerations more explicit across the product lifecycle. These changes directly impact manufacturers’ internal control functions, the identification of target markets, distribution channels, and the information shared between product manufacturers and distributors.
Furthermore, the publication includes non-substantive updates to align with the 2020 EBA Founding Regulation, revised guidelines on internal governance under the Capital Requirements Directive (CRD), and the sound management of third-party risk (SMTPR). These updates are part of an ongoing effort to remove outdated provisions and maintain consistency across the current regulatory and supervisory framework.
First issued in 2016 to address conduct risks and enhance consumer protection, the POG Guidelines apply to both manufacturers and distributors of products within the EBA’s remit. This includes mortgages, personal loans, deposits, payment accounts, payment services, and electronic money. The EBA noted that recent legislative and market developments, specifically the growth of the ESG product sector, made the revisions necessary to maintain business conduct standards.
The updated guidelines were developed in accordance with Article 16 of Regulation (EU) No 1093/2010. The text will be published in all 24 official European Union languages later this year, with the new requirements scheduled to apply from 11 January 2027.
