ISDA and the Association for Financial Markets in Europe (AFME) have submitted a joint response to the European Banking Authority’s (EBA) discussion paper on environmental, social and governance (ESG) risk management and supervision.
The main focus of this discussion paper is on the risks to which institutions are exposed via the impact of ESG factors on their counterparties. The discussion paper provides details on the risks stemming from environmental factors, especially climate change, and illustrates ongoing initiatives and progress achieved on this topic over recent years. The paper also proposes to enhance the existing supervisory reviews with ESG factors and to introduce a new area of supervisory analysis and evaluation of the long-term resilience of the business model against the time horizon of the relevant public policies or broader transition trends.
This paper forms part of the EBA’s Sustainable Finance Action Plan, and will provide further insight to the final report the EBA will produce on the management and supervision of ESG risks for credit institutions and investment firms in 2021. This work will also be taken into consideration to produce a number of Capital Requirements Regulation standards and guidelines related to ESG risks.
The industry sets out its general comments as part of the consultation response.
Documents (1) for ISDA, AFME Respond to EBA Discussion paper on ESG Risks for Credit Institutions and Investment Firms
Latest
Expanding Legal Agreement Coverage in the CDM
This paper examines the recent extension of the Common Domain Model (CDM)1 to represent two of the most significant, and previously undeveloped, areas of its legal agreement model: umbrella agreements and contract amendments. Umbrella agreements are widely used to document...
ISDA Omnibus Canadian Representation Letter
On September 2, ISDA published the Omnibus Canadian Representation Letter, which combines previously published representation letters drafted to assist firms in compliance with Canadian trade reporting, business conduct, regulatory margin and clearing classification rules. The Omnibus Canadian Letter is designed...
Joint Response on Cross-margining
On August 31, ISDA and FIA submitted a letter to the US Commodity Futures and Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) on the agencies’ joint request for comment on the implementation of portfolio margining and cross-margining...
Accounting for Carbon Credits: Latest Developments
This paper updates and extends the analysis set out in ISDA’s October 2023 paper on accounting for carbon credits. While preserving the original focus on the accounting treatment of voluntary carbon credits (VCCs) and compliance carbon credits (CCCs), it expands...