Navigating Climate & ESG Disclosure Frameworks

Sophie Rose -

BCBS D597 vs EBA Pillar 3 ESG 

As environmental, social, and governance (ESG) considerations move to the top of the regulatory agenda, banks worldwide face growing pressure to report on these non-financial risks.

Two leading frameworks have emerged: 

  1. BCBS D597 – a voluntary climate-risk template from the Basel Committee on Banking Supervision 
  2. EBA Pillar 3 ESG Disclosures (EBA/ITS/2022/01) – mandatory reporting standards for large EU banks 



Why Climate & ESG Disclosures Matter 

  • Investor demand is rising: ESG data is now essential for credit analysis and portfolio decisions. 
  • Regulator focus is intensifying: both global bodies and regional authorities expect transparent risk reporting. 
  • Risk landscape is expanding: from physical climate shocks (storms, floods) to transition risks (shifting to a low-carbon economy). 

Banks that stay ahead with robust ESG disclosures not only achieve compliance; they build trust with stakeholders and seize emerging green opportunities. 

BCBS D597: Voluntary, Global Best Practice 

  • Issuer: Basel Committee on Banking Supervision 
  • Scope: Climate-related financial risks only 
  • Nature: Fully voluntary; any bank worldwide can adopt it 
  • Structure: Five core pillars - Governance, Transition Risk, Physical Risk, Metrics, Alignment 

The BCBS template (document D597) offers a single set of tables (CRFRA/B, CRFR1–3) designed to capture consistent climate-risk data. While it’s not legally binding, it reflects global best practice and provides an excellent starting point for any bank beginning its climate-risk journey. 


EBA Pillar 3 ESG: Mandatory for EU Banks 

  • Issuer: European Banking Authority 
  • Scope: Full ESG spectrum—Environmental, Social, Governance 
  • Nature: Mandatory since April 2023 for large EU-regulated banks 
  • Structure: Multiple Implementing Technical Standards (ITS): 
  • EU TX1: Transition Risk Exposures 
  • EU TX2: Physical Risk Exposures 
  • GAR: Green Asset Ratio and other KPIs 
  • ESG GB: Governance & qualitative disclosures 

EBA’s framework sits within Pillar 3 of the EU Capital Requirements Regulation (CRR). It ensures that all banks report ESG data with the same definitions, granularity, and timing making cross-bank comparison and supervisory review far more efficient. 


 


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With increasing regulatory demands such as Basel III, PRA, and EBA requirements, banks need a scalable solution that eliminates inefficiencies and strengthens risk control. Suade delivers a seamless, automated approach to compliance, trusted by financial institutions worldwide. 

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