No. 744 - ESG disclosure: regulatory framework and challenges for Italian banks

Vai alla versione italiana Site Search

by Tommaso Loizzo and Federico SchimpernaDecember 2022

The paper examines the regulatory framework being finalized in the European context regarding climate risk requirements for banks and non-financial firms. An illustration of the Pillar 3 disclosure requirements for large banks and those found in the preliminary versions of the sustainability standards being prepared by EFRAG is followed by a discussion of the results of the main supervisory initiatives undertaken by the Bank of Italy and the ECB and the main challenges for the Italian banking system.

Based on the new regulatory requirements, banks will be required to provide numerous disclosures on their degree of exposure to climate and environmental risks. The main challenge relates to the ability to access climate data of an adequate quality about their customers; the greatest difficulty relates to information about small and medium-sized companies, since ESG disclosure requirements only apply to listed or large companies.

Full text