https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R1024&from=en 9  See Recitals 7 and 12 and sub-recommendation B3 of “Recommendation of the ERB of 22 December 2011 on the macro-prudential mandate of national authorities” (ESRB/2011/3): https://www.esrb.europa.eu/pub/pdf/recommendations/ESRB_2011_3.en.pdf 10  See Recital 24 of Regulation No 1092/2010 of the European Parliament and of the Council on European Union macroprudential oversight of the financial system and establishing a European Systemic Risk Board: The ECB and the national central banks should have a leading role in macro-prudential oversight because of their expertise and their existing responsibilities in the area of financial stability. National supervisors should be involved in providing their specific expertise. The participation of micro-prudential supervisors in the work of the ESRB is essential to ensure that the assessment of macro-prudential risk is based on complete and accurate information about developments in the financial system. Accordingly, the chairpersons of the ESAs should be members with voting rights. One representative of the competent national supervisory authorities of each Member State should attend meetings of the General Board, without voting rights. In a spirit of openness, 15 independent persons should provide the ESRB with external expertise through the Advisory Scientific Committee. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:C:2016:202:FULL&from=EN  5/9  the banking sector should be activated or deactivated. Accordingly, other sectoral financial regulators are given responsibilities for activating their own tools.

At European level, the European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) is also a significant step forward in terms of improving the information available to market participants and supervisors. This initiative, still in the negotiation phase, revises and strengthens the sustainability reporting standards for companies operating in Europe and establishes mandatory sustainability reporting standards for more than 50,000 firms, including all large and listed firms, although simpler standards will apply to listed SMEs.14 In January this year, the EBA published disclosure standards for environmental, social and governance (ESG) risks. These provide the basis for publication by the European banking sector of comparable quantitative information on how climate change risks affect their balance sheets. Compliance with these standards will undoubtedly require a significant effort on the part of banks, which ultimately depend on the information available on their counterparties. As a result, the EBA has introduced certain transitional features in the standards to facilitate the adaptation process. In any event, providing this information to the market will encourage banks to improve their information systems and databases. Moreover, improving public information will ultimately enhance the ability of financial market participants to discriminate. The BCBS is playing a notable role globally. In November 2021 it publicly communicated its support for the creation of the ISSB.15 At the same time it indicated its intention to explore in parallel how to use the bank disclosure framework (Pillar 3) to promote a common disclosure baseline for climate-related financial risks across internationally active banks.