Learnings from the first EU-wide pilot exercise on climate risk
The European Banking Authority (EBA) published on the 21st of May its first EU-wide pilot exercise on climate risk, whose main objective is to map banks exposures to climate risk and provide an insight into the green estimation efforts banks have carried out so far. The results give a clear picture of banks data gaps and highlight the sense of urgency to remedy them if they are to achieve a meaningful and smooth transition to a low-carbon economy. They also show big differences in banks application of the EU taxonomy.
In this alert you will read more about how the exercise was conducted including approaches to classify exposure under climate risk, scenario analysis and how to calculate green asset ratio.