The European Banking Authority (EBA) has unveiled a new ESG dashboard aimed at improving the monitoring and assessment of climate-related risks across the EU/EEA banking sector.
Developed using data from banks’ Pillar 3 ESG disclosures, the tool offers centralised access to comparable indicators covering both transition and physical climate risks.
The dashboard highlights that more than 70% of EU/EEA banks’ corporate exposures are concentrated in sectors that significantly contribute to climate change. This suggests that banks could face considerable transition risks if these industries come under pressure from new sustainability policies, technological shifts, or evolving consumer demands. However, the EBA noted that aggregate data cannot fully capture the variations among individual companies or their current efforts to transition towards greener practices.
On the physical risk side, the data show that in most countries, less than 30% of banks’ exposures are linked to areas facing elevated physical climate risks, such as those prone to extreme weather events. Yet, the EBA pointed out that inconsistencies in geographical disclosure and risk assessment methodologies among banks warrant cautious interpretation of the figures.
Another key insight from the dashboard relates to real estate lending. Around 50% of property-backed loans across the EU fall into the top two energy efficiency buckets, with properties consuming less than 200 kWh/m². This could indicate relatively low transition risk from property portfolios. Still, banks often rely on proxies and estimates for energy efficiency data, limiting the certainty of these findings.
The EBA’s dashboard also includes indicators on the alignment of banks’ lending with the EU Taxonomy. The Green Asset Ratio (GAR) remains low, at slightly below 3% on average across EU/EEA banks, although the computed loan GAR — a more tailored measure — reflects somewhat higher levels. The EBA stressed that the low GAR figure partly stems from the early stage of the economic transition, where few activities currently meet the stringent Taxonomy criteria.
The ESG dashboard’s development is part of the EBA’s broader mandate under Article 29(f) of its founding regulation, supporting the European Commission’s goal to systematically monitor climate-related financial stability risks. It builds on ESG data disclosed by banks as of 31 December 2023 and 30 June 2024, with the EBA planning regular updates to reflect evolving standards and regulatory changes, particularly around Taxonomy alignment indicators.
The EBA has also been busy in other areas this year. Back in February, the Authority revised its Guidelines on ICT and security risk management to align with DORA, which came into force on 17 January 2025.
The revisions aim to simplify the ICT risk management framework and offer legal clarity to the market. The EBA has narrowed the scope of these Guidelines, specifically focusing on the entities covered by DORA, including credit institutions, payment institutions, and account information service providers. This will eliminate potential overlaps with existing regulations while ensuring consistent ICT risk management practices.
One significant change is the narrowing of the entity scope of the Guidelines to only those organisations directly impacted by DORA. The Guidelines now specifically cover credit institutions, payment institutions, exempted payment institutions, and exempted e-money institutions, while excluding other types of payment service providers (PSPs) not covered under DORA.
Elsewhere, the EBA announced a public consultation on new draft Guidelines intended to standardize reporting requirements under the Markets in Crypto-assets Regulation (MiCAR).
These guidelines are designed to aid competent authorities and the EBA in overseeing compliance and conducting significance assessments of crypto-assets.
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