The European Banking Authority (EBA) reported on 6 August 2026 that banks' transition and physical climate risk exposures across the EU/EEA remained broadly stable in the second half of 2025, while the availability and quality of climate-related data continued to improve, particularly for mortgage portfolios. The latest ESG risk dashboard, published by the EBA, shows that the share of exposures to sectors highly contributing to climate change held steady at 62% between June and December 2025, with the overall transition risk profile unchanged at the EU level and the most exposed countries and banks largely the same as before.
The dashboard also indicates a slight increase in the share of highly energy-efficient mortgage exposures (≤100 kWh/m²) and a marginal decline in the proportion of exposures without energy performance (EP) information or with estimated EP scores, pointing to ongoing improvements in data used to assess mortgage portfolios. Banks' exposures sensitive to physical climate risk remained unchanged across most jurisdictions, though significant cross-country differences persist, with average exposure shares ranging from below 10% in some countries to above 55% in others, reflecting variations in geographic, economic, and sectoral characteristics as well as differences in risk classification and assessment methodologies.
The EBA ESG risk dashboard, which provides a regular overview of climate-related risks in the EU/EEA banking sector based on ESG disclosure data, supports the monitoring of banks' exposures to both transition and physical climate risks and helps assess emerging vulnerabilities related to climate change. The findings for the second half of 2025 indicate stable climate-related risk exposures accompanied by incremental improvements in the availability and quality of climate-related reporting data.
The stability in risk exposures and the gradual data quality improvements are significant for several stakeholders. For EU banks, the improved data quality, especially in energy efficiency assessments, enables more robust climate risk monitoring and could reduce the administrative burden of future reporting requirements, as more accurate data may streamline compliance processes. However, the persistent cross-country differences in physical risk exposures highlight the need for banks in more exposed jurisdictions to enhance their risk management practices, potentially increasing operational costs for those institutions. For EU regulators and supervisors, the dashboard provides a more reliable basis for identifying emerging vulnerabilities and calibrating supervisory expectations, though the variations in methodologies across jurisdictions may complicate the harmonisation of risk assessment approaches. For EU consumers with mortgages, the increased availability of energy performance information could lead to more accurate pricing of climate-related risks in mortgage products, potentially affecting borrowing costs, while also supporting the EU's broader energy efficiency objectives. The EBA's continued monitoring through the dashboard is expected to inform future policy discussions on integrating climate risks into the prudential framework, though no immediate regulatory changes were announced in this publication.