The ECB has, like BaFin (the German banking supervisory authority), published a guide for the institutions under its supervision to address climate risks. The guide is significantly more demanding than all previous publications, both in terms of the level of detail and the requirements. For instance, amongst other things, it calls for the quantification of climate and environmental risks, as well as the introduction of key performance indicators (KPIs) and key risk indicators (KRIs).
Immediately after publication, a gap analysis had to be performed and an action plan developed. These are to be discussed in detail among supervisory authorities in 2021. As early as 2022, the ECB plans to undertake a detailed supervisory review of institutions’ procedures and to adopt concrete measures where necessary.