56. Competent authorities should recognise that all models have inherent limitations, and this …

Competent authorities should recognise that all models have inherent limitations, and this applies especially to evolving ESG models. In the case of bottom-up stress test, to mitigate these limitations, and to enhance the robustness and credibility of ESG stress testing and resilience analysis, they should employ complementary analysis to cross-validate results and ensure their plausibility, use benchmarking techniques, and cross-validate results with alternative methodologies.

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/