EBA Publishes Climate Risk Indicators for EU/EEA Banking Sector

The European Banking Authority (EBA) has released a comprehensive ESG dashboard to monitor climate-related financial risks in the EU/EEA banking sector.

• The dashboard covers both transition and physical climate risks based on Pillar 3 ESG disclosures with data reference dates of 31 December 2023 and 30 June 2024.
• It highlights substantial exposure of over 70% of banks to corporates in sectors contributing heavily to climate change, pointing to significant transition risks.
• Physical risk exposure is generally under 30%, with variations due to differing geographical data granularity and assessment methods.
• The Green Asset Ratio (GAR) is low, just under 3%, signaling early stages of alignment with the EU Taxonomy; banking real estate lending also shows limited transition risk based on energy efficiency indicators.

This initiative advances the European Commission’s goal of systemic monitoring of climate-related financial risks and will be regularly updated alongside evolving disclosure templates and taxonomy regulations.