The European Supervisory Authorities (EBA, EIOPA and ESMA - the ESAs) today launched a public consultation on their draft Joint Guidelines on ESG stress testing, as mandated by the Capital Requirements Directive and the Solvency II Directive. The draft Guidelines set out how competent authorities for the banking and insurance sectors should integrate environmental, social and governance (ESG) risks when performing supervisory stress tests. They aim to harmonise methodologies and practices among supervisors in banking and insurance, to ensure proportionality and to enhance the effectiveness and efficiency of ESG stress testing. The consultation runs until 19 September 2025.
The draft Guidelines, put forward by the Joint Committee of the ESAs, establish a common framework for developing ESG-related stress testing methodologies and standards across the EU’s financial system. They provide comprehensive guidance on the design and features of stress tests with ESG elements, as well as the organisational and governance arrangements such stress tests would need to have. These include sufficient human resources with relevant expertise, data collection and management systems that support access to high-quality ESG data and appropriate timelines for scenario analysis.
Aiming to foster a consistent and long-term approach to ESG stress testing, the draft Guidelines are designed to accommodate future methodological advancements and improvements in data availability.
Consultation process
The ESAs invite stakeholders to provide their feedback on the consultation paper by responding to the questions via an online survey no later than 19 September 2025. All responses will be published on the ESAs’ respective websites unless otherwise requested.
Public hearing
The ESAs will hold an online public hearing on the draft Guidelines on 26 August 2025, from 10:00 to 12:00 CEST. Further details, including dial-in credentials, will be provided closer to the date of the event.
