EU: Weakening of CSRD could present challenges to banks, warns EU banking regulator
"EU banking regulator says CSRD key to improving access to ESG data"
The European Banking Federation (EBF) is warning that the sheer scale of a proposed rollback of the bloc’s environmental, social and governance (ESG) rules will make it harder for lenders to analyse credit risk.
Banks in Europe have been waiting for years for their clients to start providing hundreds of data points under new ESG reporting rules.
But as the European Union now looks set to dramatically water down planned regulations, banks fear they will be left without the necessary tools to conduct proper credit risk analyses, according to the EBF, whose members include BNP Paribas, UniCredit and Deutsche Bank.
The EBF’s warning comes as the European Commission prepares to unveil its long-awaited omnibus proposal on Feb 26.
The EU’s executive arm is proposing that key ESG rules, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive, be scaled back so that 85 per cent of the companies originally intended to be in scope will no longer be required to comply, Bloomberg reported earlier this week...
The commission’s proposal “could be bad news for the financial industry”, said Ms Eva-Maria Segur Cabanac, global lead sustainability partner for the financial institutions group at Baker McKenzie...
The European Banking Authority (EBA), which is the bloc’s main watchdog for lenders, said in a report on Feb 24 that banks are currently struggling to gather information on parameters such as how a customer’s exposure to environmental risks like flooding may affect their ability to pay off a loan...