Did your bank ask you for sustainability data? Find out what’s at risk.

Many companies are still surprised when their bank requests data on energy consumption, carbon emissions, gender equality policies, workplace accident rates, among other non-financial indicators.

The usual reaction from managers is: "My company is not obliged to report Sustainability information (it falls outside the scope of Directive (EU) 2026/470 of 24 February, in its Article 3). Why is the bank demanding this?" The explanation is simple, but deeply impactful: Sustainability has become a central criterion in assessing bank credit risk and in the regulatory compliance of the financial institutions themselves.

Regulators' pressure on the Banking sector

For the economy's money to flow into sustainable companies, European regulators – such as the European Central Bank (ECB) and the European Banking Authority (EBA) – have imposed strict and specific obligations on banks in this regard.

Banks obtain funding in international markets by issuing Green Bonds or accessing ECB lines linked to the EU Climate Benchmarks. To prove that their credit portfolios comply with the Paris Agreement (1.5ºC limit), banks need to demonstrate that their clients are reducing emissions. A bank's corporate client portfolio is its "raw material"; if clients pollute without a transition plan, the bank's own reputation and funding costs worsen considerably.

What are GAR and BTAR (and how they affect credit)

Currently, regulators require banks to measure and report specific metrics related to the sustainability of their financing:

The risk of inaction: If a company does not measure its data, banks cannot report the BTAR and are forced by regulators to assume that the financing carries maximum risk. This forces the bank to allocate more reserve equity, which translates into a direct consequence for the business: it makes credit more expensive for your company.

Credit Rating: Physical and Transition Risks

The ECB requires banks to incorporate climate risks into each company's credit rating. This analysis is fundamentally divided into two aspects:

• Physical Risks: If a company's premises or land are located in areas prone to extreme droughts, floods, or fires, the value of the collateral (mortgages) decreases in the eyes of the banking institution.
• Transition Risks: If a company uses obsolete or carbon-intensive technology, it runs a serious risk of losing clients (who increasingly demand "green" suppliers) or suffering heavy tax penalties in the future.

How to prepare your company

Anticipation is key to ensuring access to financing under competitive conditions. If your bank requests ESG information, rest assured you do not need to navigate this topic alone. There are tools, processes, and methodologies available to SMEs that help them accurately identify and measure the indicators that banking entities need to report.