Abstract
This study examines the disclosure quality in the 2023 annual reports of the impact that climate-related matters have on the reporting of financial instruments within banks. The sample contains the 44 largest banks supervised by the European Central Bank. We find that banks have high quality disclosures regarding their objectives, policies and processes for managing the climate-related risk arising from financial instruments. In addition, the exposure to climate related risks is also disclosed, which is mostly fuelled by regulatory disclosure requirements. Banks can improve the quality of their disclosures regarding ESG features embedded in financial instruments and the impact of climate-related risk on the allowance for expected credit losses.
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