On 9 March 2023, the European Commission published a letter addressed to the Chairs of the European Supervisory Authorities (ESAs) regarding an assessment of the EU financial system’s resilience to stress in the transition to the EU’s 2030 goals for the reduction of greenhouse gas emissions.

The letter invites the ESAs to conduct a one-off climate risk scenario analysis in order to assess, in cooperation with the European Central Bank (ECB) and European Systemic Risk Board (ESRB), the resilience of the EU’s financial system on the way to the EU’s targets for 2030. This one-off exercise should go beyond the usual climate stress test, as a cross-sectoral exercise looking at contagion and second round effects, thereby giving the Commission a better understanding of the vulnerabilities in the EU financial system. Furthermore, the Commission would appreciate any insight into the EU financial system’s capacity to support green investments under stress.

The Commission also asks for any policy-relevant conclusions no later Q1 2025, in order to provide input into the work of the new Commission.