38. When performing longer-term ESG stress testing, competent authorities should consider several …

When performing longer-term ESG stress testing, competent authorities should consider several distinct scenarios covering the broad spectrum of possible futures and levels of severity (e.g. including tipping points). The reference scenario may draw on the financial entity’s own central scenario, which can serve as a benchmark to test the impacts of alternative, materially different trajectories on strategy and business model resilience (e.g., via risk-adjusted profitability estimates).

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/