Latest Insights

Are climate change risks properly captured in the prudential framework?

In March 2021, the European Banking Authority (EBA) was mandated through Article 501c of the Capital Requirements Regulation (CRR) to “assess […] whether a dedicated prudential treatment of exposures related to assets or activities associated substantially with environmental and/or social objectives would be justified”. More simply put, the EBA was asked to investigate whether the current prudential framework properly captures environmental and social risks. In response, the EBA published a Discussion Paper (DP) [1] in May 2022 to collect input from stakeholders such as academia and banking professionals.

Regulatory timelines ESG Risk Management

With the recent avalanche of ESG-related guidance and regulations, it is easy to lose track of the corresponding timelines.

The ECB’s thematic review on climate risks and the focus areas for 2023

The European Central Bank (ECB) recently completed another important step in the supervisory process to assess the management of climate-related and environmental (C&E) risks by European banks. On 2 November, they published the results of their thematic review on C&E risks performed earlier this year.

ESG-related derivatives: innovation or fad?

Part I

Over the past years, more and more corporates have implemented a sustainability framework, incorporating specific KPIs that can be used as a basis to arrange sustainability-linked funding instruments.
Next to sustainable funding instruments, including both green and social, we also see that these KPI’s can be used for other financial instruments, such as ESG (Environmental, Social, Governance) derivatives. These derivatives are a useful tool to further drive the corporate sustainability strategy or support meeting environmental targets.

How can treasury become a sustainable function?

There is more than green financing

As sustainability is gaining momentum as a business priority, numerous corporates are re-assessing their business models and strategic goals. One of the key subjects in this re-assessment is the implementation of tangible and transparent Environment, Social, and Governance (ESG) factors into the business.