background image

Bank watchdog moves ahead with new ESG rule feared across Europe

author image

By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on Bloomberg or enjoy below

🗞️ Driving the news: European banks are being urged to stop resisting new ESG reporting requirements and accept the upcoming implementation of the green asset ratio (GAR) rule
• The GAR rule requires mandatory disclosure of a bank’s green asset ratio to provide stakeholders with transparency about their sustainable financing activities

🔭 The context: The green asset ratio, supported by the European Central Bank (ECB) but criticized by the finance sector, reflects the percentage of a bank's balance sheet that adheres to the EU’s sustainable business activities criteria
• Some banks fear these ratios will be low, potentially casting them in a negative light while other banks, like DNB of Norway, have begun sharing their ratios.

🌍 Why it matters for the planet: The financial sector's transparency regarding sustainable investments is essential in the global fight against climate change
• As investor pressure mounts, the industry is urged to be proactive in assessing environmental risks and supporting climate-friendly policies

⏭️ What's next: With the mandatory disclosure of the green asset ratio set to commence from January, banks are making a last ditch attempt to align their portfolios with environmentally sustainable activities and prepare for rigorous data reporting
• The larger aim is to ensure banks adequately understand and respond to environmental and social risks

💬 One quote: "The exercise is necessary... it will trigger actions to get better information," (Jose Manuel Campa, Chairman of the ECB)

📈 One stat: Preliminary figures hint that the GAR will likely be in single digits for most banks

Click for more news covering the latest on sustainable finance

Did you enjoy this illuminem voice? Support us by sharing this article!
author photo

About the author

illuminem's editorial team - providing you with concise summaries of the most important sustainability news of the day.

Follow us on Linkedin, Twitter​ & Instagram

Other illuminem Voices

Related Posts

You cannot miss it!

Weekly. Free. Your Top 10 Sustainability & Energy Posts.

You can unsubscribe at any time (read our privacy policy)