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MSCI Introduces ESG and Climate Disclosure Solution for EU Banks

Updated: Dec 21, 2022

MSCI, a provider of investment data and research, has announced the debut of a new solution designed to assist banks in meeting the forthcoming ESG and climate-related risk disclosure requirements of the European Banking Authority (EBA).

The EBA released a set of standards for "Pillar 3" disclosures on ESG risks earlier this year, providing technical details required for banks to report on issues such as how climate change may exacerbate balance sheet risks, how they are mitigating those risks, and exposure to taxonomy-aligned activities. These standards are intended to enable stakeholders to assess banks' ESG-related risks and sustainable finance strategies.

This year, the initial Pillar 3 ESG disclosure requirements take effect, with reporting on some components commencing in 2023 and others being phased in over time.

MSCI reports that the new solution fulfills the granular reporting requirements of the EBA's technical standards and can assist banks in meeting TCFD reporting recommendations and EU Taxonomy alignment criteria.

MSCI's Head of ESG and Climate, Eric Moen, stated:

"Because of the European Banking Authority's Pillar 3 ESG risk disclosure regulations and rising stakeholder demands, financial institutions are under growing scrutiny to evaluate the climate risk transparency of their entire banking book. With this new disclosure structure in place, banks must immediately ensure compliance with EBA standard regulatory standards and other regions- and country-specific frameworks. MSCI's new solutions will assist banks in understanding the EBA's expectations and disclosure responsibilities.

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