Regulators’ expectations for transition planning are significantly raising the bar for business, including the financial sector.

According to ESMA’s published priorities for 2023, greater transparency will be required in the context of portfolio decarbonization plans. Instead of general declarations of zero-carbon, specific action plans created with climate risk-related analyses in mind and identifying specific initiatives to achieve carbon neutrality will be expected. These requirements are also driven by the expected scopes of disclosure according to the CSRD as well as relevant to a wide range of stakeholders – who expect “credible transition plans.”

Thus, there is a formidable challenge on the part of financial institutions to both understand and calculate their portfolio emissions, as well as to plan their climate transition in a detailed and methodical manner, taking into account the impact on individual sectors of climate risks. There are already solutions in the market to approximate the calculation methodologies and assist financial institutions in the transformation (NZBA, TPT, SBTi, PCAF/PACTA, as well as TCFD recommendations and the well-known GHG Protocol), which leaders are already following. The panel will discuss the regulatory challenges and address the scale of the challenge and the advancement of the Polish financial sector in this regard.