6 December 2019
On 6 December 2020, the European Banking Authority (EBA) published its Action Plan on Sustainable Finance outlining its approach and timeline for delivering mandates related to environmental, social and governance (ESG) factors. The Action Plan explains the EBA’s sequenced approach, starting with key metrics, strategies, risk management and moving towards scenario analysis and evidence for any adjustments to risk weights. The Action Plan also aims to communicate key messages on the EBA’s policy direction and the expectations from financial institutions on areas where action is needed now to support the move towards more sustainable finance in the EU. Significantly, the EBA insists that banks should act now to tackle climate change by measuring green lending on their books and creating sustainable business strategies. Specific reference is made to EMF-ECBC led Energy Efficient Mortgages Initiative (EEMI) on page 21 of the Action Plan.
In launching the Action Plan, Jose Manuel Campa, the EBA Chairperson, highlighted the importance of acting now on sustainable finance and said:
“The urgent need to act explains why we have also set out early expectations for interim measures, including the identification of simple metrics that can foster market discipline and allow banks to set clear green strategies”
Further information on the EBA Action Plan can be accessed here.
The European Covered Bond Council (ECBC) is the platform that brings together covered bond market participants including covered bond issuers, analysts, investment bankers, rating agencies and a wide range of interested stakeholders.
