ESAs publish joint Guidelines on ESG stress testing

The European Supervisory Authorities (EBA, EIOPA and ESMA - the ESAs) published today their Joint Guidelines on environmental, social, and governance (ESG) stress testing. These Guidelines provide national insurance and banking supervisors with clear guidance on how to integrate ESG risks into supervisory stress tests, both when using established frameworks and when conducting complementary assessments of ESG risk impacts.

The Guidelines set common standards for embedding ESG risks into stress testing methodologies across the EU's financial system. They provide guidance on designing ESG-inclusive stress tests and outline the necessary organisational and governance arrangements.

The Guidelines are designed to support a consistent, long-term approach to ESG stress testing while allowing flexibility to accommodate future methodological advances and improvements in data availability. Importantly, they do not introduce new requirements for competent authorities to carry out ESG-focused supervisory stress tests.

Next steps

The Guidelines will be subject to a 'comply or explain' procedure by the National Competent Authorities and will be translated into all the official languages of the EU in the first quarter of 2026.

Background

The Final Report on the Joint ESAs Guidelines on ESG stress testing follows a public consultation and sets out the final text of the Guidelines, together with an assessment of the comments received during the consultation process. These Guidelines are designed to ensure consistency, long-term perspective, and common standards for ESG risk assessment methodologies in line with 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 require the publication of the joint Guidelines by 10 January 2026.