EU Bank Climate Risk Indicators Hold Steady as ESG Data Quality Improves, EBA Finds
EU Bank Climate Risk Indicators Hold Steady as ESG Data Quality Improves, EBA Finds #
The European Banking Authority has published the latest edition of its ESG risk dashboard, covering banking data through the second quarter of 2025. The update shows broad stability across the climate-related financial risk metrics tracked for EU and European Economic Area banks.
The dashboard is published twice a year and draws on Pillar 3 ESG disclosures from nearly 120 large EU/EEA banks. Exposures and risk indicators are aggregated at country and anonymised institution level to allow comparison across the sector.
Bank exposures to corporate sectors considered significant contributors to climate change held at approximately 62% of non-financial corporate portfolios. The EBA said the figure is consistent with previous readings, indicating stability rather than deterioration.
The authority reported further improvements in the availability and quality of environmental data, including energy efficiency assessments of mortgage portfolios. The EBA described better environmental data as a building block for more robust supervisory monitoring of climate risk.
Not all sections of the dashboard were updated. Following an EBA no-action letter issued on 5 August 2025, the tabs covering Taxonomy Alignment and exposures beyond the Green Asset Ratio and Banking Book Taxonomy Alignment Ratio have not been refreshed past Q4 2024. The EBA has not given a timeline for resuming updates to those sections.
Physical risk metrics measure the share of bank exposures tied to geographies vulnerable to extreme weather. Those figures have historically shown fewer than 30% of loan books in most countries fall into high physical-risk zones.
The EBA said it will continue publishing the dashboard twice yearly and plans to broaden its bank sample in successive editions. The authority said headline indicators are stable but that concentrations in climate-sensitive sectors remain high enough to warrant continued investment in risk management tools and monitoring frameworks across the European banking system.
Copy link