“Fit for Paris” – Banking and the Sustainability Governance

Despite the partial exclusion of the banking sector from the scope of the CSDDD, the path towards aligning banks with the sustainability objectives of the Paris agreement is well underway. This is clear from the new banking package (CRD6/CRR3), as well as from all the current legislation on sustainability and the regulatory and supervisory work of the EBA, ESMA and the ECB, among other organizations. Bank governance has always given greater prominence to stakeholder value, with the incorporation of climate and environmental concerns appearing as a natural extension of banking's systemic responsibility. Corporate governance concerns are reflected: (i) in terms of the "ESG fitness" requirements of the board of directors (composition, diversity, suitability, independence), with the challenge of finding green directors; (ii) but also in terms of directors' duties, the scope of which will be tested in the context of
growing climate litigation.