- Sustainability
- ESG Regulation
ESG Regulation
ESG regulation is evolving rapidly and the complexity of its requirements affects banks and financial institutions across different areas.
On this page you will find an overview of the key regulations related to ESG.
ESG is used to refer to the environmental, social and governance criteria that generally make up the three pillars of non-financial analysis. ESG criteria can be used to assess a company's responsibility towards the environment and its stakeholders (employees, partners, subcontractors or clients).
In 2019, the European Union presented the The European Green Deal, a comprehensive policy package representing a Strategy Document for meeting climate goals, which aims to steer the EU towards climate neutrality by 2050. In the context of this initiative, a number of regulatory provisions have been put in place to achieve climate neutrality.
SFDR: The Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector aims to increase the transparency and comparability of sustainability disclosures across financial markets. The SFDR sets out obligations for financial market participants and financial advisers to disclose information on the integration of sustainability risks into their risk management or remuneration processes, on the consideration of the principal adverse impacts (PAIs) of investing on sustainability, as well as sustainability-related information in relation to financial products. It introduces a classification of financial products according to three levels (according to Articles 6, 8 and 9), in relation to the different levels of sustainability of the products concerned.
Taxonomy: Regulation (EU) 2020/852 establishes a classification system that defines a framework for companies to determine whether an economic activity can be classified as 'environmentally sustainable'.
MiFID II ESG framework: the MiFID II Implementing Regulation (EU) 2021/1253 incorporates sustainability factors, risks and preferences into the organizational requirements and operating conditions of investment service providers. Furthermore, the MiFID II Implementing Directive (EU) 2021/1269, transposed into Decree No 308/2017 incorporates sustainability factors into product governance obligations.
EBA ESG Pillar 3: The EBA Action Plan for Sustainable Finance of December 2019 is central to the area of bank prudence. It addresses all three pillars of capital adequacy. Under EBA Pillar 3, it is a set of reporting requirements for disclosures on capital and risk exposures of banks and financial institutions. EBA ESG Pillar 3 covers disclosures on environmental, social and governance (ESG) risks under Pillar 3. It also defines templates for reporting information and key performance indicators, including the Green Asset Ratio (GAR) and the Bank Book-to-Asset Ratio (BTAR).
CSRD (formerly the NFRD): Directive (EU) 2022/2464 replaces the existing Non-Financial and Diversity Disclosure Directive (NFRD) and significantly increases the disclosure requirements for non-financial information for companies falling under its scope and also expands the scope of sustainability disclosures for covered entities.
In compliance with Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (SFDR), Komerční banka discloses specific information on its approach to integrating sustainability risks and to considering adverse impacts on sustainability.
Through the publication of the following statements, we do not only enhance the transparency of our policy but also provide information on the manner in which we consider impacts on sustainability factors.
Société Générale Group (SG Group), including KB, has adopted a commitment to respect and promote human rights. Since these are one of the foundations of its Environmental and Social (E&S) Risk Management System and also constitute a sustainability factor, KB has issued a statement on human rights. KB supports respect for human rights and also addresses specific issues concerning the financial sector.
Also aware of the accelerating biodiversity loss worldwide, KB is committed to respecting and preserving biodiversity and has issued a statement on biodiversity protection. SG Group strives to comply with the laws and regulations on the protection of species, habitats and ecosystems in the countries in which it operates, and expects similar compliance from its suppliers and clients.
Since climate issues are a key area for SG Group in terms of its governance and strategy, it has committed to align its activities with the goals of the Paris Climate Agreement; KB has therefore issued a statement on climate change.
The following documents related to SFDR describe Komerční banka’s approach to the integration of sustainability risks and adverse sustainability impacts: