ECB fines French bank for climate risk failures

"The European Central Bank said Friday it had fined French bank Credit Agricole €7.55 million ($9 million) for failing to properly identify climate change-related risks that could affect its balance sheet. "Credit Agricole did not sufficiently assess the materiality of its climate-related and environmental risks" by a deadline set after an investigation in 2024, the ECB said in a statement, adding the bank was late by "75 full days"."

"Credit Agricole expressed its "incomprehension" at the ECB move and said the fine related to only a small part of the bank's work. Climate risk is limited overall across the bank, according to the statement. "This risk is immaterial at the Credit Agricole group level," the bank said in a statement, adding that it had missed the ECB's deadline since "responding to the ECB at the requested level of granularity required extensive work"."

"The ECB has since 2020 required banks to manage and disclose climate-related risks to their portfolios as fears grow that increasingly frequent and intense natural disasters could hit asset values. The transition to a lower-carbon economy also adds an element of risk to investments in fossil fuel firms or energy-intensive sectors. The ECB last Novemeber fined Spanish bank Abanca €187,650 for failing to identify and disclose climate risks on time."

The European Central Bank fined Credit Agricole €7.55 million for failing to sufficiently assess the materiality of climate-related and environmental risks by a post-investigation deadline. The bank missed the ECB deadline by 75 full days. Since 2020 the ECB has required banks to manage and disclose climate-related risks because natural disasters and the transition to a lower-carbon economy can depress asset values and create transition risk for fossil-fuel and energy-intensive investments. Credit Agricole described the fine with incomprehension, said the penalty covered only a small part of its work, and asserted that climate risk is immaterial at the group level while noting the required granularity demanded extensive work.

Read at The Local France