In 2020 with the European Central Bank (ECB) published the ECB Guide on climate-related and environmental risks (the Guide), which explained how banks are expected to prudently manage and transparently disclose such risks.

The Guide states that institutions should ‘.. explicitly consider climate-related and environmental
changes to their macroeconomic and regulatory environment and their competitive
landscape, in particular. This is expected to be reflected in institutions’ business
strategy processes, and demonstrated by documented management body meetings
and discussions.”

and that

“.. the assessment of materiality is an institution-specific assessment, taking into account the specificities of the respective business model, operating environment and risk profile.”

In 2022, the ECB set out deadlines for banks to progressively meet all the supervisory expectations it laid out in this Guide.

On the 10th November 2025, ECB imposed periodic penalty payments amounting to €187,650 on ABANCA Corporación Bancaria, S.A. for failure to comply with ECB decision onclimate-related and environmental risks. Their press release notes that ABANCA failed to meet the materiality assessment requirement for 65 full days in 2024.

Why does it matter?

1. The ECB is demonstrating that it is serious about ensuring timely compliance and is prepared to use enforcement measures to do so. You can read about enforcement measures here.
2. Some may question the relevance of climate-related disclosures at a time when both the US and the EU (via the Omnibus proposal) are revising the scope of their ESG regulations. However, this ECB fine sends a clear message that compliance with existing requirements is still expected.
3. It is also possible that this action will prompt other institutions to re-examine the depth and sophistication of their materiality assessments, as well as their submission timelines.

You can see the full press release here: https://www.bankingsupervision.europa.eu/press/pr/date/2025/html/ssm.pr251110~3e0b6f579e.en.html