EBA · 2023_6878 Final Q&A

ITS ESG P3 - Annex II, Templates 10

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
434a
Topic
Credit risk
Submitted by
Credit institution
Submitted
2023-09-07
Answered
2023-12-15
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

1. Are general-purpose loans to pureplay companies in the scope of Template 10? 2. How sustainability linked loans with multiple sustainable performance targets be treated?

Background

1. If a credit institution provides working capital financing for an existing wind farm or an electric vehicle manufacturer that is not in the scope of NFRD or is not taxonomy-aligned, would the loan be covered in the scope of Template 10? Can these be considered to contribute to climate change mitigation since their product/services help in the overall transition towards a low carbon economy? 2. Sustainability-linked loans often have more than one sustainable performance target. These may include KPIs related to GHG emission reductions along with other ESG KPIs. In the case of multiple KPIs where one of them is related to climate change mitigation, should credit institution report the loan in Template 10?

Answer

Template 10 in Annex XXXIX of Regulation (EU) 2021/637 covers bonds and loans (including general-purpose loans to pureplay companies) provided they are related to climate-change mitigating actions defined by other standards than the EU ones, as explained in paragraph 1 under Template 10 in Annex XL of the same regulation. Following paragraphs 1 and 2 under Template 10 in Annex XL, in the case of sustainability-linked loan with more than one sustainable performance targets, where one of them is related to climate change mitigation, institutions should disclose the loan in Template 10 only if the sustainability-linked loan contributes to climate-change mitigation and/or adaptation according to other standards than the EU ones. Additionally, in the narrative accompanying the template and in column f, institutions shall provide detailed explanations on the nature and type of mitigating actions considered.

Original source: European Banking Authority, Q&A ID 2023_6878

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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