EACB answer to the ECB consultation on Guide on the management and disclosure of climate-related and environmental risks

We appreciate that the Guide does not impose mandatory standards but (broader) supervisory expectations. However, it should be clarified further to what degree and level of detail those expectations are binding and if so, to what degree they should be applied by different banks. In fact, the approaches to climate- and other environmental risk may differ considerably between banks due to differing size, business model and geographical situation. Banks should therefore have sufficient room to develop methods and procedure for the assessment and management of climate risk according to their needs. The ECB expectations should provide a general orientation in this respect. We believe it should be further clarified that the guide is not to be seen as imposing binding standards, but as an orientation for the supervisory dialogue.
We also see that the proposed timeline is far too short and should rather be postponed, or at least a much more phased approach should be envisaged.
In addition, we would welcome clarification from the ECB on how a proportionate application of the SSM guide looks like and especially what simplifications can be applied to LSIs.
Furthermore, we would appreciate a clearer specification that, as explicitly mentioned during the industry webinar and the hearing, the Guide would not be anticipating in any way additional capital measures across the board, but remain – as much as possible – capital neutral.