Large EU banks, beginning 2024, will be required to show their impact on climate goals
The European Banking Authority (EBA) has set out annual environmental, social and governance (ESG) templates for the largest 150 banks, according to a recent Reuters report. The list includes Deutsche Bank, SocGen and UniCredit.
EU banks must to disclose their exposure to “carbon intensive activities and assets that may experience risks like floods and fires as a result of climate change” from 2023. Disclosure requirements also include details on exposure to fossil fuel clients and alignment with 2050 net zero goals.
These disclosures will enable both investors, bank clients and other bank stakeholders to compare each bank's exposure to polluting and ESG-friendly companies as well as to monitor how fast lenders shift to sustainable business practices.
The EU is a model for the rest of the world. Working across borders, banks and financial institutions globally can share and compare disclosure rules, with the goal of reaching industry-wide, global disclosure requirements.
We all deal with banks on some level, be it for personal or business requirements. So yes, we are all in this together.