ECB and ESAs Call for Enhanced ESG Disclosure for Securitised Assets

ECB and ESAs Call for Enhanced ESG Disclosure for Securitised Assets

By Prathamesh 17 March, 2023

This week the European Supervisory Authorities (ESAs), together with the European Central Bank (ECB) published a statement encouraging disclosure standards for climate-related data on securitised assets.

The ECB and ESAS argue that there is a lack of climate-related data on the assets underlying structured finance products, posing an obstacle to the proper assessment of climate-related risks and effective investment in climate-friendly products.

To address this the ESAs are working towards disclosure standards for securitized assets that will include climate-related information and reviewing regulation to promote robust disclosure requirements for financial products. While disclosures are voluntary at present, the ESAs are calling on originators to collect the data that investors need via existing securitization disclosure templates. The aim is for securitisation repositories to offer seamless access to climate-related data to support transparency and clarity for investors.

And for the future? Potentially, new climate change related disclosure requirements for similar funding instruments could provide consistent, comparable, harmonised data – ideally, in digital format!

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