September 30 2020

Comments on ECB Guide on climate-related and environmental risks

The German Banking Industry Committee (GBIC) has issued its comments to the public consultation of the European Central Bank (ECB) on the Guide on climate-related and environmental risks. In general, GBIC welcomes the ECB's commitment to closely follow international and European developments in the field of sustainable finance and to support the financial sector on its path towards a sustainable economy. Even though the ECB's Guide merely formulates supervisory expectations, form the point of view of GBIC it should be emphasized more clearly that the Guide provides primarily a longer-term vision or guidance for the supervisory dialogue. The question of whether and to what extent climate-related and environmental risks should be taken into account depends on their materiality. Therefore, GBIC calls for the principle of proportionality to be more firmly anchored in the Guide, both at institutional and transactional level. In addition, GBIC considers the scheduled date of application from the institutions' perspective to be unrealistic, also against the background of the COVID-19 pandemic, which is currently tying up considerable resources, particularly in risk management at the institutes. Rather, a suitable transition period should be allowed. All things considered, GBIC demands a significantly streamlined and substantively balanced version of the Guide that also synchronizes with future policies issued by EBA and with the EBA mandates.

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