ESAs’ Final Report on ESG Stress Testing establishes a harmonised EU framework for supervisors to embed climate and ESG risks into banks’ and insurers’ stress tests with consistent methods and scenarios

It guides supervisors on selecting ESG risks, designing scenarios, allocating resources, and assessing resilience over both short‑ and long-term horizons, initially focusing on climate and environmental risks without imposing new legal obligations. These guidelines operate under a “comply or explain” framework, supporting harmonised supervisory practices under the Capital Requirements Directive and Solvency II, with full application expected by 1 January 2027…