European Supervisory Authorities issue joint guidelines for ESG stress testing
The European Supervisory Authorities (EBA, EIOPA, and ESMA) have published joint Guidelines on environmental, social, and governance (ESG) stress testing. These provide national supervisors with guidance on integrating ESG risks into supervisory stress tests.
Harmonizing ESG risk assessment across EU
The Guidelines establish common standards for embedding ESG risks into stress testing methodologies across the EU financial system.
They offer guidance on designing ESG-inclusive stress tests and detail the necessary organisational and governance arrangements for supervisors.
The aim is to support a consistent, long-term approach to ESG stress testing.
Legal framework for consistent assessment
The guidelines ensure consistency and a long-term perspective for ESG risk assessment, aligning with CRD Article 100(4) and Solvency II Article 304c (3).
These directives mandated the publication by January 10, 2026, following a public consultation process.