Crédit Agricole fined for climate risk identification failures
The European Central Bank has imposed periodic penalty payments of €7,551,050 on Crédit Agricole for failing to conduct a required materiality assessment of its climate-related and environmental risks by the May 31, 2024 deadline.
Penalty for climate risk assessment failure
The European Central Bank has imposed periodic penalty payments amounting to €7,551,050 on Crédit Agricole, S.A. The decision stems from the bank's non-compliance with a requirement set out in an ECB decision of February 8, 2024. This earlier decision mandated Crédit Agricole to conduct a materiality assessment of its climate-related and environmental (C&E) risks and to reinforce its identification of such material risks.
The deadline for compliance was May 31, 2024. Crédit Agricole failed to meet this requirement for a period of 75 full days in 2024. The ECB's determination of the penalty amount considered the materiality of the infringement, the duration of the breach, and the daily turnover of the supervised entity, in line with its established enforcement criteria.
Years of supervisory warnings ignored
The ECB's enforcement action is part of an escalating supervisory process for climate-related and environmental (C&E) risks, initiated in 2020. This process included a guide, a 2022 climate risk stress test, and a thematic review identifying shortcomings.
Banks received feedback letters with specific timelines.
Failure to meet these led to binding requirements with periodic penalty payments.
Crédit Agricole may challenge the decision before the Court of Justice of the European Union.
Supervision with real teeth
This penalty marks a significant escalation in the ECB's approach to climate risk supervision, moving beyond guidance to concrete enforcement.
It sends a clear message to all supervised entities that compliance with climate-related requirements is non-negotiable and will be met with financial consequences.
The reputational impact and precedent set are far more substantial than the monetary fine itself.