The ECB wants to put banks on schedule to meet climate goals | Techy Kings

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FRANKFURT, Nov 2 (Reuters) – Eurozone banks are still largely failing to meet the European Central Bank’s climate disclosure and management expectations, and laggards who continue to miss deadlines could be forced to hold more capital, the ECB said on Wednesday.

Overseeing the eurozone’s biggest banks, the ECB has pushed lenders to start factoring climate issues into the way they do business, but boards have been slow to recognize the issue and adapt their business models.

“The glass is slowly filling but it’s not half full yet,” ECB board member Frank Elderson said in a blog post. “Too many banks are still hoping for the best while not preparing for the worst.”

“We detected blind spots in 96% of banks in identifying climate and environment-related risks in terms of key sectors, regions and risk drivers,” he added.

In an effort to force action, the ECB put banks on a schedule, and they will have until the end of 2024 to meet all supervisory expectations.

By next March, lenders will have to adequately categorize climate and environmental risks and must carry out a full assessment of their impact.

Then by the end of 2023, the ECB expects banks to include climate and environmental risks in their governance, strategy and risk management. All other criteria must be met by the close of 2024.

“The deadline will be closely monitored and, if necessary, enforcement action will be taken,” said Elderson, vice-chairman of the ECB’s supervisory board.

The ECB has already imposed “binding qualitative requirements” on more than 30 non-compliant banks in its annual supervisory review and for a small number of banks, this affects their final score, which then affects the amount of capital lenders have to hold, the ECB added . .

Report by Balazs Koranyi; Editing by Hugh Lawson

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