meta_id 3093029

On the date of publication, Norway's Financial Supervisory Authority (Finanstilsynet) announced the implementation of new guidelines on environmental scenario analysis issued by the European Banking Authority (EBA). The guidelines (EBA/GL/2025/04) provide direction on how financial institutions should use scenario analysis to assess resilience against environment-related risks, particularly climate risk. The guidelines establish a framework for financial institutions to test their resilience against environmental risks through scenario analysis. This includes assessment of both physical and transition risks associated with climate change. Physical risks encompass direct impacts from climate-related events such as extreme weather, while transition risks relate to the economic impacts of the shift towards a low-carbon economy. The guidelines aim to ensure that financial institutions have robust processes in place to identify, measure, and manage climate-related financial risks across their operations and portfolios. The guidelines will come into force on January 1, 2027. Finanstilsynet expects all financial institutions operating in Norway to comply with the guidelines upon their effective date. Financial institutions should begin preparing their environmental scenario analysis frameworks and processes in advance of the implementation deadline to ensure full compliance by the required date. REFERENCES: Financial Supervisory Authority (Finanstilsynet): https://www.finanstilsynet.no/