Bank Valuations at Stake as EU Splits With US Over ESG Risk
- ECB studies banks’ inclusion of ESG in loan-loss provisions
- EU is fast diverging from US in enforcement of ESG regulations
A coal-fired power plant, in Germany.
Photographer: Krisztian Bocsi/BloombergThis article is for subscribers only.
The European Banking Federation says lenders in the region won’t be able to compete with their US rivals if regulators continue to pile on ESG rules that Wall Street remains free to ignore.
The warning from the bloc’s main bank lobby comes as the European Central Bank puts pressure on lenders to capture environmental, social and governance risks, including in loan-loss provisions, marking a new frontier in ESG reporting standards.