This note provides an analysis on ESG information published in 2024 by a sample of Italian and European banks in the context of Pillar 3 and non-financial reports; a specific insight into the Green Asset Ratio (GAR), for the first time published by intermediaries, is also provided.
The evidence gathered confirms a widespread difficulty that most banks encounter in obtaining ESG information on their counterparties, in many cases due to difficulties in accessing databases containing data on the energy consumption of companies and households. However, Italian banks show a gradual improvement in retrieving and processing quality data, reflecting a greater ability to measure the transition risk tied to real estate collateral than in the previous year. The share of exposures of all banks to non-financial companies operating in highly contributing to climate change sectors remains high. The amount of exposures subject to physical risk is also considerable, while the initial GAR values are very low and lead to reflections on the need for improvements in the construction of the indicator to increase its meaningfulness; discussions on this are also taking place at European level.
