In 2021, De Nederlandsche Bank (DNB) analysed the identification, measurement and management of climate-related and environmental risks by 22 medium-sized and small banks. The study revealed that all banks still have some way to go in this respect.
Since 2021, DNB has applied the ECB Guide on climate-related and environmental risks for banks in its prudential supervision of banks. The Guide describes 13 supervisory expectations on how banks should formulate and implement climate-related and environmental risks in their business strategies, governance, risk management and disclosures.
We asked a total of 22 medium-sized and small banks to complete a self-assessment consisting of a materiality assessment, a survey on meeting supervisory expectations and an action plan. We then analysed and evaluated these self-assessments. The results of our analysis show that all banks could step up their efforts and improve the identification, measurement and management of climate-related and environmental risks. The results are similar to those published by the ECB, who conducted the same study for significant banks in 2021: “The state of climate and environmental risk management in the banking sector”.
The small group of banks that conducted a materiality assessment consider the materialisation of climate-related and environmental risks through credit risk most likely in the long term (see Figure 1). For most of these banks, however, the materiality assessment cannot be considered sufficiently sound and comprehensive.
The analysis also shows that almost all banks recognise climate-related and environmental risks, but that they still have a long way to go in order to meet all 13 expectations (see Figure 2). On average, banks score best on the expectations regarding scenario analysis and stress testing.
Most banks have developed plans to improve the identification, measurement and management of climate-related and environmental risks. However, in most cases we assessed these plans as inadequate or partially inadequate.
In 2022 we will continue our dialogue with the banks and encourage them to make progress in identifying and managing climate-related and environmental risks.
DNB has reviewed the identification and buffer requirements for systemically important banks and maintains the current requirements.
Read more DNB maintains buffers for systemically important banks
On Tuesday 5th November from 3:00-4:45 PM CET DNB will organize a physical information session about fit and proper assessments.
Read more Information session about fit and proper assessments DNB
On 30 September 2024, DNB published the amendments to the two policy rules for the deposit guarantee scheme (DGS). These amendments were publicly consulted in June 2024.
Read more Adoption of the 2024 amendments to the Policy Rules for the Deposit Guarantee Scheme
As at 30 June 2024, Dutch households held some €15 billion in bank deposits in other euro area countries, the latest figures from DNB and the European Central Bank (ECB) show. This means foreign savings keep growing.
Read more Dutch households see foreign bank deposits double in two years
