The European Banking Authority (EBA) has unveiled a new ESG dashboard aimed at improving the monitoring and assessment of climate-related risks.
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 reveals 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.
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.
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