Article 501c
Prudential treatment of exposures to environmental or social factors
1.
EBA, after consulting the ESRB, shall, on the basis of available data, assess whether the dedicated prudential treatment of exposures related to assets or liabilities, subject to the impact of environmental or social factors is to be adjusted. In particular, EBA shall assess:
(a)
the availability and accessibility of reliable and consistent ESG data for each exposure class determined in accordance with Part Three, Title II;
(b)
in consultation with EIOPA, the feasibility of introducing a standardised methodology to identify and qualify the exposures, for each exposure class determined in accordance with Part Three, Title II, based on a common set of principles to ESG risk classification, using the information on transition risk and physical risk indicators made available by sustainability disclosure reporting frameworks adopted in the Union and where available internationally, the guidance and conclusions coming from the supervisory stress-testing or scenario analysis of climate-related financial risks conducted by EBA or the competent authorities and if appropriately reflecting the ESG risks, the relevant ESG score of the credit risk rating by a nominated ECAI;
(c)
the effective riskiness of exposures related to assets and activities subject to the impact of environmental or social factors compared to the riskiness of other exposures and the possible additional and more comprehensive revisions to the framework that should be considered, taking into consideration the developments agreed at international level by the BCBS;
(d)
the potential short, medium and long-term effects of an adjusted dedicated prudential treatment of exposures related to assets and activities subject to the impact of environmental or social factors on financial stability and bank lending in the Union;
(e)
the targeted enhancements that could be considered within the current prudential framework.
2.
EBA shall submit successive reports on its findings to the European Parliament, to the Council and to the Commission by the following dates:
(a)
9 July 2024 for the assessments required under paragraph 1, point (e);
(b)
31 December 2024 for the assessments required under paragraph 1, points (a) and (b);
(c)
31 December 2025 for the assessments required under paragraph 1, points (c) and (d).
On the basis of those EBA reports, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2026.