EBA Proposes Green Asset Ratio as KPI for Banks Under EU’s Sustainable Disclosure Requirements

On March 1, 2021, the European Banking Authority (EBA) published advice to the European Commission on the disclosure requirement on environmentally sustainable activities in accordance with Article 8 of the EU’s Taxonomy Regulation. The EBA recommends key performance indicators (KPIs) and related methodology for the disclosure by credit institutions and investment firms of information on how, and to what extent, their economic activities are environmentally sustainable in accordance with the Taxonomy Regulation.

In particular, the EBA recommends a “green asset ratio” as a KPI, and that credit institutions disclose their green asset ratio to show the extent to which the financing activities in their banking book (including loans and advances, debt securities and equity instruments) are aligned with the Taxonomy Regulation, Paris Agreement the UN SDGs.

Continue reading on MayerBrown.com for more detail on the EBA’s advice and the recommended green asset ratio.

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