ESAs publish joint Guidelines on ESG stress testing
The European Supervisory Authorities (EBA, EIOPA and ESMA) published new guidelines today. They explain how national banking and insurance supervisors should include ESG risks in their stress tests, using both existing methods and additional ESG assessments.
The Guidelines set common standards for embedding ESG risks into stress testing methodologies across the EU’s financial system. They provide guidance on designing ESG-inclusive stress tests and outline the necessary organisational and governance arrangements.
The Guidelines are designed to support a consistent, long-term approach to ESG stress testing while allowing flexibility to accommodate future methodological advances and improvements in data availability. Importantly, they do not introduce new requirements for competent authorities to carry out ESG-focused supervisory stress tests.
The Guidelines will be subject to a ‘comply or explain’ procedure by the National Competent Authorities and will be translated into all the official languages of the EU in the first quarter of 2026.