Regulatory Alerts2026-06-08
Banks' Management of ESG-Related Credit Risks Requires Attention, Knowledge, and Systematic Approach
The Danish Financial Supervisory Authority issued this June 2026 report following 2025 inspections, requiring financial institutions to strengthen the identification, analysis, and management of credit risks related to Environmental, Social, and Governance (ESG) factors. The regulator mandates that institutions integrate physical and transition risks into credit policies, conduct scenario analyses, and distinguish material credit risks from broader sustainability elements. Institutions must ensure effective internal controls, staff training, and customer dialogue to align with the Management Decree and EBA guidelines.
Share