Overview
The Joint Research Centre assists the data analysis and methodological development, as well as developing and proposing awareness and capacity building actions to support the development of a new environmental, social and governance (ESG) risk management framework.
The framework is a flagship technical support project by the Reform and Investment Task Force (SG REFORM) to address the need for effective ESG supervision.
The framework will help financial regulators in EU countries to better understand and manage the complex risks related environmental, social and governance issues.
What the JRC is doing
The JRC contributes to the overall successful implementation of the project by supporting and complementing the work carried out under a separate grant agreement by a consortium of universities.
Data and methodologies
The JRC supported the consortium by providing beneficiary national competent authorities (NCAs) with a comprehensive overview of the data and information required to carry out supervisory tasks under the EU sustainable finance regulatory framework. We also identified technical solutions to facilitate more streamlined collection and processing of these data.
In addition, we contributed to the production of a comprehensive framework to support both off-site and on-site supervisory analyses, as well as impact assessments of ESG)risks affecting different types of financial institutions and firms.
Awareness and capacity building
The JRC contributed to strengthening beneficiary NCAs’ understanding of the ESG regulatory framework and its supervisory implications. We also supported the uptake of the methodologies and technical solutions developed through the project and helped raise awareness among relevant stakeholders.
To this end, the JRC organised, supported and participated in a range of capacity-building activities, including horizontal and sectoral training events.
We also contributed to the dissemination of the project results and to awareness-raising initiatives at both EU and national level.
Impact and results
EU NCAs (in this case, financial supervisory authorities and central banks) will be better equipped to oversee the mitigation of ESG risks and implement the emerging EU sustainable finance regulatory framework.
Policy background
This project was proposed by SG REFORM in 2022 under the Technical Support Instrument - the EU programme that provides tailor-made technical expertise to EU countries to design and implement economic and social reforms.
In recent years, awareness has grown of the two-way relationship between ESG issues and the financial system. For example, the financial sector can influence problems such as climate change by deciding where money is invested or lent. Equally, financial institutions can suffer losses when ESG-related problems occur.
In line with the European Green Deal, the EU has introduced several initiatives to ensure that financial rules take ESG considerations into account. This framework is a concrete action to support NCAs to implement these rules.
Related publications
L Alessi, M Gentile (2025) The sustainability premium of Italian bonds, CONSOB (Italian Commission for Companies and the Stock Exchange) sustainable finance report
Related links
ESG risk management framework for the financial sector – SG REFORM
Sustainable finance – Directorate-General for Financial Stability, Financial Services and Capital Markets Union
