Bloomberg: Banks Told to Review Clients in Historic ESG Crackdown in EU
October 16, 2023 The European Banking Authority (EBA) is incorporating environmental and social risks (ESG) into the capital requirements framework for European banks. This revision will require banks to update their risk assessments for clients, particularly affecting high-emission sectors like oil and gas. The changes include immediate obligations and gradual implementations, potentially leading to new legislation. This initiative is part of a global trend, with organizations like the Basel Committee on Banking Supervision also planning to introduce similar frameworks for climate-related financial risks. The EBA’s action is a pioneering step in integrating ESG considerations into the prudential framework for banks.