ESAs publish joint Guidelines on ESG stress testing

The European Supervisory Authorities (ESAs) have released joint guidelines on ESG stress testing today, January 8, 2026. These guidelines offer clear direction to national insurance and banking supervisors on integrating environmental, social, and governance (ESG) risks into stress tests. The document provides a framework for both established stress tests and complementary assessments. The guidelines establish common standards for incorporating ESG risks into stress testing methods across the EU’s financial system. They offer specific guidance on how to design these ESG-inclusive tests, as well as necessary organizational and governance arrangements. These standards will support a consistent, long-term approach to ESG stress testing while providing flexibility for future advances. Notably, the guidelines do not introduce any new requirements for competent authorities to conduct ESG-focused supervisory stress tests. National Competent Authorities will implement the guidelines under a "comply or explain" procedure. The guidelines will be translated into all official EU languages by the end of the first quarter of 2026. This publication followed a public consultation, and the final document includes an assessment of comments received. These guidelines are compliant with Article 100(4) of the CRD and Article 304c (3) of Solvency II.