On 8 January 2026, the Joint Committee of the European Supervisory Authorities (ESAs) issued their Final Report on Joint Guidelines to ensure that consistency, long-term considerations and common standards for assessment methodologies are integrated into the stress testing of environmental, social and governance (ESG) risks pursuant to Article 100(4) of the Capital Requirements Directive IV (CRD IV) and Article 304c(3) of the Solvency II Directive.

The Joint Guidelines should be read in conjunction with the CRD IV and Solvency II Directive which sets out obligations to Member State competent authorities’ (NCAs), procedural rules and prudential assessment criteria on how NCAs perform supervisory stress tests, either as part of the relevant regulatory framework or as an ad hoc assessment.  The Joint Guidelines do not include a new requirement for NCAs to carry out ESG supervisory stress tests. Rather, the Joint Guidelines have two main objectives which are to:

• Improve the legal certainty, clarity and transparency of the supervisory approval process with regard to the integration of ESG risks into NCAs stress testing frameworks and scenario analysis frameworks.

• Ensure consistency, long-term considerations and common standards for assessment methodologies throughout the EU and across sectors

Next steps

The Joint Guidelines will be translated into the official languages of the EU and published on the websites of the ESAs. The deadline for NCAs to notify the respective ESA whether they comply or intend to comply with the Joint Guidelines will be two months after the publication of the official translations.

The Joint Guidelines apply from 1 January 2027.