Banks across the EU and European Economic Area showed broadly stable exposure to climate-related risks in the second half of 2025, alongside small improvements in the climate data used to assess mortgage portfolios.
The share of banks’ exposures to sectors that “highly contribute to climate change” was unchanged at 62% between June and December 2025, the European Banking Authority informed on Friday in its latest ESG risk dashboard.
Mortgage lending exposures by energy-efficiency category also stayed broadly steady, with a slight rise in the share of highly energy-efficient mortgages — defined as homes using 100 kWh per square metre or less.
At the same time, the proportion of mortgage exposures missing energy performance information edged down, and the share based on estimated energy performance scores declined marginally.
Physical climate risk varies sharply by country
Banks’ exposures sensitive to physical climate risks — such as risks linked to weather and geography — were unchanged across most jurisdictions, the EBA said.
However, differences between countries remained wide, with average exposure shares below 10% in some jurisdictions and above 55% in others.
Those variations reflect differences in geographic, economic and sectoral characteristics, as well as differences in how risks are classified and assessed across jurisdictions.
The EBA ESG risk dashboard is a regular overview of climate-related risks in the EU/EEA banking sector based on banks’ ESG disclosures, and is used to monitor both transition risks — linked to the shift towards a lower-carbon economy — and physical risks tied to climate impacts.
