EBA consults on integrating climate risk into Systemic Risk Buffer

On January 29, 2026, the European Banking Authority launched a consultation on draft amendments to its Systemic Risk Buffer Guidelines, integrating physical and transition climate risks under CRD VI. The shift signals that climate data is becoming a direct determinant of bank capital adequacy, a precedent relevant to Indian banks facing evolving climate-risk supervision.

On January 29, 2026, the European Banking Authority (EBA) launched a public consultation on draft amendments to its Guidelines on the Systemic Risk Buffer (SyRB). Under the mandate of the updated Capital Requirements Directive (CRD VI), the revisions transform the SyRB into a macroprudential tool addressing systemic risks from climate change. The amendments enable enhanced sectoral and geographical classifications to identify vulnerability hotspots, emphasise counterparty and collateral location for physical risks, and focus on carbon intensity for transition risks. A single SyRB measure can now cover multiple exposure subsets simultaneously.

European banks, insurers exposed via the banking system, and national supervisory authorities across the Single Market are directly affected. National authorities gain power to pinpoint geographic and sectoral hotspots of vulnerability, while banks face capital requirements tied to physical risks like floods, wildfires, and rising sea levels, and to transition risks based on debtor-sector carbon intensity. The framework incorporates lessons from Member States that already implemented SyRB measures, targeting design, monitoring, and cross-border reciprocation so risks do not migrate between jurisdictions.

Financial institutions should engage with the consultation, which remains open until April 30, 2026, with a public hearing scheduled for April 9. Banks should treat climate-related data, once considered non-financial, as a direct determinant of capital adequacy and regulatory costs, and prepare data on counterparty location, collateral exposure, and debtor-sector carbon intensity. Institutions should monitor how national authorities apply granular sectoral and geographical classifications and ensure systems can supply evidence for SyRB measures covering multiple overlapping exposure subsets.

Key figure — Consultation deadline: April 30, 2026