The European Central Bank (ECB) has imposed periodic penalty payments totalling €187,650 ($2,17,540) on ABANCA Corporación Bancaria, S.A. for failing to comply with a key requirement of its 1 December 2023 decision concerning climate-related and environmental (C&E) risk management.
Under the decision, ABANCA was required to conduct a materiality assessment of its C&E risks by 31 March 2024, ensuring it could identify and evaluate the key environmental and climate risks to which it is, or could be, exposed. The ECB’s enforcement action follows the bank’s 65-day delay in fulfilling this obligation.
When determining the penalty, the ECB considered the seriousness and duration of the breach as well as the daily turnover of the supervised entity.
The fine is part of the ECB’s ongoing supervisory efforts to ensure that European banks appropriately identify, assess, and manage their exposure to climate and environmental risks. Since 2020, the ECB has pursued a structured escalation process, beginning with its Guide on climate-related and environmental risks, followed by stress tests in 2022 and bank-specific feedback outlining timelines for compliance.
In cases where institutions failed to meet deadlines, the ECB introduced binding requirements accompanied by potential periodic penalty payments to compel compliance. Such measures are designed to reinforce prudence and transparency in risk management across the euro area’s banking sector.
ABANCA retains the right to challenge the ECB’s decision before the Court of Justice of the European Union.
