As part of the annual regulatory stress test for the financial institutions it oversees, the European Central Bank (ECB) will conduct a climate stress test from March to July 2022.

For banks and supervisors at the same time, this first test is intended to provide results on how well banks are prepared for the risks caused by climate change and the transition to an emissions-neutral economy.

The test consists of three modules. In a first step, the banks should answer questions in order to locate their progress in preparing for climate risks. A benchmark analysis is also used to check how much banks rely on income from CO2-intensive financing and how large the volume of financed greenhouse gas emissions is. This is intended to provide indicators of how sustainable the banks' business model is and how much they are involved in emission-intensive companies. The third module is a "bottom-up" stress test that analyzes how banks can react to risks from rising CO2 prices, extreme weather phenomena and the transition to an emission-neutral economy.

At the beginning of the year, the ECB banking regulator accused the industry of being too slow to face the risks posed by climate change.

She criticized incomplete data and insufficient attention from managers.