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mBanqueNationaleBank
OF BELGIUM
OF BELGIUM Eurosystem

Circular

Public
Brussels, 27 October 2026

Reference: NBB_2026_19
Your contact person:
Brenda Van Tendeloo tel. +32 2 221 51 74 brenda.vantendeloo@nbb.be

Prudential planning for the monitoring of ESG risks by small and non-complex institutions

Scope

Small and non-complex institutions within the meaning of Article 4(1), point 145, of the Capital Requirements Directive (CRD VI, Directive 2013/36/EU), provided that they are also less significant institutions (LSIs).

Summary/Objectives

This circular specifies the simplifications that small and non-complex institutions may apply when drawing up their prudential plans including quantifiable objectives and processes to identify, monitor and manage financial risks arising in the short, medium and long term from ESG factors.

Madam,
Sir,

The amended Banking Act requires credit institutions to draw up plans including quantifiable objectives and processes for the monitoring and management of financial risks arising in the short, medium and long term from ESG factors. This obligation stems from Article 79 of the Law of 22 July 2026, which transposes Directive 2013/36/EU (CRD VI) and inserts an Article 57/1 into the Banking Act (Law of 25 April 2014 on the status and supervision of credit institutions).

The European Banking Authority (EBA) guidelines of 8 January 2025 on the management of ESG risks, transposed in circular NBB_2025_11, include among other things guidelines on prudential plans which must contribute to the resilience of institutions to ESG risks in the short, medium and long term.

These guidelines take into account the principle of proportionality, both from the point of view of the materiality of the risks and of the size and complexity of the institutions. Small and non-complex institutions1, as well as other institutions that are not large2, must collect and monitor fewer data and indicators and may rely on methodologies

[1] As defined in Article 4(1), point 145, of Regulation (EU) No 575/2013.

[2] As defined in Article 4(1), point 146, of Regulation (EU) No 575/2013.

and simplified assumptions, both for day-to-day risk management and for scenario analyses and the drawing up of ESG prudential plans. With regard to these plans, the guidelines explicitly provide as follows:

• the complexity of the underlying scenarios must be proportionate to the size and complexity of the institution. Small and non-complex institutions may rely on simplified parameters and assumptions with regard to, among other things, risks, time horizons and geographical granularity;

• small and non-complex institutions may rely on a more limited number of indicators for setting objectives and formulate more qualitative objectives instead of quantitative objectives;

• small and non-complex institutions must update their plans only every two years, instead of once a year, except in the event of significant changes in their economic environment influencing their ESG risk profile in the meantime.

The new Article 57/1 § 2 of the Banking Act provides that the Bank shall determine in which areas a derogation or a simplified procedure may be applied by small and non-complex institutions. By this circular, the Bank therefore provides that small and non-complex institutions may:

• apply enhanced proportionality to their planning process, their objectives and their parameters;

• limit themselves to purely qualitative objectives, if the drawing up of quantitative objectives is impossible or too burdensome for them;

• update their plans only every two years, instead of once a year, except in the event of a significant change in their economic environment influencing their ESG risk profile in the meantime.

• temporarily limit their plans to climate-related risks only.

In addition, the Bank will assess the plans only from 2028 (financial year 2027).

This circular shall enter into force on 11 January 2027.

A copy of this circular is sent to the approved statutory auditor(s) of your company.

We ask you to accept, Madam, Sir, the assurance of our distinguished consideration.

Pierre Wunsch
Governor