On 24 January 2022, the European Banking Authority (EBA) published a final report containing draft implementing technical standards (ITS) on prudential disclosures on environmental, social and governance (ESG) risks in accordance with Article 449a of the Capital Requirements Regulation (CRR).

The final report presents the EBA final draft ITS on Pillar 3 disclosures on ESG risks, which put forward tables, templates and associated instructions that specify the requirement in Article 449a of the CRR to disclose prudential information on ESG risks, including transition and physical risk, addressed to large institutions with securities traded on a regulated market of any Member State.

The Pillar 3 framework on prudential disclosures on ESG risks that these ITS implement will support institutions in the public disclosure of meaningful and comparable information on how ESG-related risks and vulnerabilities, and in particular climate change, may exacerbate other risks in their balance sheet. It will allow investors and stakeholders to compare the sustainability performance of institutions and of their financial activities. Furthermore, it will help institutions in providing transparency on how they are mitigating those risks, including information on how they are supporting their customers and counterparties in the adaptation process to e.g. climate change and in the transition towards a more sustainable economy.