The European Central Bank, and Europe’s three primary financial regulatory agencies, the European Supervisory Authorities (ESAs), announced plans to introduce new climate change-related disclosure requirements for structured finance products, aimed at enabling investors to better identify climate-related risks. Structured finance products typically include investment products in which returns are linked to underlying assets, created through a securitization process. Assets involved in securitization transactions often include real estate mortgages or auto loans, which the ECB and ESAs said could be directly exposed to physical or transition-related climate risks.

Source: ESGToday