EBA publishes the annual EU-wide Transparency Exercise and Risk Assessment Report
On 29 November 2024, the European Banking Authority (EBA) published the results of the 2024 EU-wide Transparency Exercise (TE) and Risk Assessment Report (RAR). The TE and RAR are key elements of the EBA’s ongoing efforts to enhance transparency and comparability of information on banks’ exposures to environmental, social and governance (ESG) risks.
The TE assesses the level of ESG-related information disclosure by banks in the EU. The RAR assesses the level of ESG risks faced by banks in the EU. The 2024 TE and RAR cover a sample of 105 banks from 27 EU Member States.
The TE results show that there has been some improvement in the level of ESG-related information disclosure by banks since the 2023 TE. However, there is still room for further improvement. In particular, banks could provide more information on their exposure to climate-related risks and on their policies and practices for managing ESG risks.
The RAR results show that ESG risks are a growing concern for banks in the EU. Climate-related risks are the most significant ESG risks faced by banks, followed by social risks and governance risks.
The EBA is concerned about the growing level of ESG risks faced by banks. The EBA believes that banks need to take steps to manage these risks effectively. The EBA will continue to work with banks to enhance their disclosure of ESG-related information and to improve their management of ESG risks.
Key findings of the TE
- The level of ESG-related information disclosure by banks in the EU has improved since the 2023 TE.
- However, there is still room for further improvement. In particular, banks could provide more information on their exposure to climate-related risks and on their policies and practices for managing ESG risks.
- The most commonly disclosed ESG-related information by banks is on climate-related risks.
- The least commonly disclosed ESG-related information by banks is on social risks.
Key findings of the RAR
- ESG risks are a growing concern for banks in the EU.
- Climate-related risks are the most significant ESG risks faced by banks, followed by social risks and governance risks.
- Banks are taking steps to manage ESG risks, but more needs to be done.
- The EBA is concerned about the growing level of ESG risks faced by banks.
EBA’s response to the TE and RAR results
The EBA is concerned about the growing level of ESG risks faced by banks. The EBA believes that banks need to take steps to manage these risks effectively. The EBA will continue to work with banks to enhance their disclosure of ESG-related information and to improve their management of ESG risks.
The EBA has identified a number of areas where banks can improve their disclosure of ESG-related information. These areas include:
- Providing more information on their exposure to climate-related risks.
- Providing more information on their policies and practices for managing ESG risks.
- Disclosing their ESG-related targets and performance.
The EBA has also identified a number of areas where banks can improve their management of ESG risks. These areas include:
- Developing and implementing a comprehensive ESG risk management framework.
- Integrating ESG risks into their risk management processes.
- Monitoring and reporting on their ESG risks.
The EBA will continue to monitor the level of ESG-related information disclosure and risk management by banks in the EU. The EBA will also continue to work with banks to enhance their disclosure and risk management practices.
Additional information
- The full TE and RAR reports are available on the EBA website.
- The EBA’s ESG Risk Assessment Framework is available on the EBA website.
- The EBA’s Guidelines on Disclosure of ESG Risks are available on the EBA website.
EBA publishes the annual EU-wide Transparency Exercise and Risk Assesment Report
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