Overarching principles
Plans developed in accordance with Article 76(2) of Directive 2013/36/EU are a product of the transition planning process outlined in Section 6.3 and should be based on a forward-looking business environment analysis and a comprehensive strategic planning process within insti-tutions. They should provide an overview of the strategic actions and risk management tools deployed by institutions to demonstrate how they ensure their robustness towards ESG risks and preparedness for the transition towards a climate and environmentally resilient and more sustainable economy.
Institutions should ensure that their plans address forward-looking ESG risk management aspects while being consistent with other applicable requirements including those relating to due diligence, sustainability reporting, and strategic actions to ensure the compatibility of business models with the transition to a sustainable economy. In particular, plans should include objectives, actions and targets with regard to the business model and strategy of the institution that are consistent with the plans disclosed pursuant to Article 19a (opens EUR-Lex in a new tab) or Article 29a (opens EUR-Lex in a new tab) of the Directive 2013/34/EU (opens EUR-Lex in a new tab), where applicable, and with ESG-related objectives or commitments that institutions are required to meet by law or regulation, as well as those they have voluntarily set. Where institutions disclose plans in accordance with Article 19a (opens EUR-Lex in a new tab) paragraph 2 (a) (iii) or Article 29a (opens EUR-Lex in a new tab) paragraph 2 (a) (iii) of the Directive 2013/34/EU (opens EUR-Lex in a new tab), they should consider reusing the already available relevant information as a first step.
Institutions should ensure that their plans and targets are well integrated into their business strategies and that they are aligned and consistent with their risk and funding strategies, risk appetite, ICAAP and risk management framework as set out in Section 5. The extensiveness of the governance arrangements, transition planning process, and the degree of sophistication of objectives, targets and metrics of the plans should reflect the nature, size and complexity of institutions’ activity and their materiality assessment of ESG risks.
In view of the institutions’ obligation to ensure that arrangements, processes and mecha-nisms related to their plans are consistent and well-integrated, including in their subsidiaries established outside of the Union, and the obligation of those subsidiaries to be able to pro-duce data and information relevant to the purpose of supervising consolidated plans in ac-cordance with Article 109(2) of Directive 2013/36/EU, parent institutions should take into ac-count ESG risks to which subsidiaries established outside of the Union are materially exposed when elaborating and implementing the consolidated plan, by having regard to applicable local legislation and ESG regulatory objectives, and should be able to demonstrate a well-informed consolidated approach.