ESAs launch consultation on how to integrate ESG risks in the financial stress tests for banks and insurers

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.

Go to the Consultation

Background 

The draft Consultation Paper on Joint Guidelines on ESG stress testing has been prepared to ensure that consistency, long-term considerations, common methodologies and related standards are integrated into the stress testing of environmental, social and governance risks pursuant to Article 100(4) of the Capital Requirements Directive - CRD (Directive 2013/36/EU) and Article 304c(3) of Solvency II (Directive 2009/138/EC) which mandate the ESAs to develop Joint Guidelines on this matter by 10 January 2026.

The draft Guidelines are addressed to competent authorities in the banking and insurance sectors. They do not include new requirements for competent authorities to carry out supervisory stress tests focused on ESG risks.

The Joint Committee is a forum with the objective of strengthening cooperation between the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA), collectively known as the three European Supervisory Authorities (ESAs). Through the Joint Committee, the three ESAs coordinate their supervisory activities in the scope of their respective responsibilities and ensure consistency in their practices.