The European Parliament’s Economic and Monetary Affairs Committee (ECON) has committed to strengthening the obligation on the financial sector to report and disclose their exposure to ESG risks.

In a January 24 press release, ECON announced that it agreed to adopt changes to the Capital Requirements Regulation and Capital Requirements Directive, which makes it compulsory for banks to adopt transitional plans to address ESG risks in the short-, medium-, and long-term, and with special focus on the EU objective of achieving climate neutrality by 2050.

In a separate statement, NGO ShareAction responded to the results of the vote, stating that it “sets a crucial step in the right direction for harnessing the power and potential of the financial sector.”

“Carrying out human rights and environmental due diligence will allow financial actors to better manage their financial risks and harmful impacts on the planet and people,” Isabella Ritter, ShareAction’s EU policy officer commented.

MEPs also stated that they want banks to disclose their exposure to crypto-assets and crypto asset services, as well as a specific description of their risk management policies related to crypto-assets.

MEP Jonás Fernández stated “the European Parliament stands ready to start interinstitutional negotiations to ensure EU citizens can soon benefit from a more resilient banking sector.”