EU Banks Show Stable Climate Risk Exposure, Improving Data Quality

The European Banking Authority released its latest Environmental, Social and Governance risk dashboard, revealing that climate risk exposures across EU and EEA banks remained largely unchanged during the second half of 2025. The data shows encouraging progress in the availability and quality of climate-related information used to monitor banking sector vulnerabilities.

Banks' exposure to sectors with high climate impact stayed steady at 62% across the EU/EEA region between June and December 2025. The overall transition risk profile remained stable, with the most vulnerable countries and institutions showing little change in their exposure levels.

Mortgage portfolio assessments demonstrated modest improvements in energy efficiency data. The share of highly energy-efficient mortgages, defined as properties using 100 kilowatt-hours per square meter annually or less, increased slightly. Meanwhile, the proportion of mortgages lacking energy performance information and those relying on estimated scores both declined marginally, reflecting gradual enhancements in data collection practices.

Physical climate risk exposure remained relatively constant across most jurisdictions, though significant geographic variations persist. Some countries reported exposure shares below 10 percent, while others exceeded 55 percent. These differences stem from variations in geography, economic structures, sectoral composition, and differences in how countries classify and assess climate risks.

The findings indicate that EU/EEA banks maintained stable climate-related risk profiles during this period while making incremental gains in reporting data quality. The EBA dashboard tracks climate risks in the banking sector using environmental, social and governance disclosure information to identify emerging vulnerabilities linked to climate change.