NBB sets out climate risk expectations, issues reporting updates

The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting, and announced the availability of new Fit and Proper forms for financial institutions on the OneGate portal from March 31, 2023.

Below are the key highlights of these recent updates:

• NBB published a communication that sets out its expectations regarding the climate-related and environmental risks. NBB highlights that all Belgian credit institutions, including the less significant institutions, should meet the expectations set out by the European Central Bank (ECB) in the guide that was published in November 2020, while considering the nature, scope, and complexity of activities of the concerned institutions. In 2022, NBB conducted its first prudential assessment of less significant institutions’ management and disclosure of climate-related and environmental risks. The assessment results show that most Belgian less significant credit institutions have started to adapt their practices to prudential expectations. However, significant shortcomings remain at all institutions in their development of suitable approaches for identifying, assessing, managing, and disclosing climate-related and environmental risks. Thus, NBB highlights the need to develop a strategic approach, including intermediate steps, if necessary, especially where data and methodology gaps could hamper adequate compliance with supervisory expectations in the short term. NBB also states that the ECB publication of November 2022 on the good practices identified during the thematic analysis exercise at the significant institutions could serve as a useful guidance in this regard.
• The new Fit and Proper forms consist of a “New Appointment Insurance” form applicable to insurance and reinsurance companies subject to the Bank’s supervision and “New Elements” forms applicable to all institutions subject to the Bank’s prudential supervision which have been subdivided into three—a generic "New elements" form for all cases of new elements except the exercise of a new external function, a "New elements - New external function" form to notify the Bank of the exercise of a new external function, and a "New elements - Update external function" form to inform the Bank of a significant change in an external function. NBB expects financial institutions to fill in these new forms, which will be accessible on the NBB FAP Portal from March 31, 2023.
• With regard to XBRL reporting, NBB highlights that good and efficient Enterprise Data Management (EDM) forms an integral part of the 2025 strategy of NBB. The first phase has been finalized and consists, among other things, of the setting up of transversal units for data collection and data validation within the Microdata management department. The first line support for reporting issues will be fully handled by the Microdata management department. Gradually, over the last two years, more and more datasets and resources have been transferred to these new units. As a result, NBB has updated the contact details for issues regarding overruling of validation rules, reopenings, or remarks with regard to the OneGate collection tool (domains MBS, MUN, NRA, REV) and/or the direct dissemination to the ECB or other European Authorities.

Related links:

• Communication on climate-related and environmental risks
• Press release on new fit and proper forms
• Update on XBRL reporting