The European Banking Authority (EBA) has published final guidelines on environmental, social and governance (ESG) risk management. The guidelines set out requirements for financial institutions to identify, measure, manage and monitor ESG risks, including through plans to ensure their resilience in the short, medium and long term.

These regulations target EU financial institutions, which need strong governance to mitigate risks from climate change, social issues and governance structures.

Effective Date:

Financial companies big must comply by 11 January 2026and smaller banks have time to prepare until 11 January 2027.

Internal processes and ESG risk management arrangements

The guidelines specify the requirements on internal processes and ESG risk management arrangements that financial institutions should have in place in accordance with the Capital Requirements Directive (CRD6). These will help to ensure the safety and soundness of institutions as ESG risks intensify and the EU moves towards a more sustainable economy.

The guidelines specify the content of plans to be prepared by institutions to monitor and address the financial risks arising from ESG factors, including those arising from the adjustment path towards the objective of achieving climate neutrality in the EU by 2050. These plans will support the preparation of institutions for the transition and should be consistent with transition plans prepared or disclosed by institutions under other EU legislation.

The Guidelines will apply from 11 January 2026, with the exception of small and non-complex institutions for which the Guidelines will apply from 11 January 2027 at the latest.

Legal basis and background

The guidelines are based on Article 87(a)5 of the CRD. They will be complemented by Guidelines on ESG scenario analyses.

The ESG risk management guidelines have been developed in line with  EBA roadmap on sustainable financing and as part of the EBA actions outlined in  roadmap on the implementation of the EU banking package.