NEW REPORT AVAILABLE!

Report of the C-ESG Risk Roundtable Collateral Workstream

BRUSSELS, 11 January 2024 – This report is the result of the collaborative work of the Collateral WS (CWS) members, facilitated by Santander in its role as chair of the WS

Key objectives of the CWS:

• identify common practices in collateral valuation, key sources of challenges in the regulatory and supervisory landscape,
• identify the different valuation standards and the gaps in their applicability,
• describe the role of the different stakeholders in the integration of ESG risks in the valuation process
• identify the main barriers encountered by banks in the collateral valuation process and to propose certain initiatives to iimprove valuation methodologies, data accuracy and a consistent approach to collateral valuation.

Key conclusions:

• Clear progress has been made towards the inclusion of climate considerations in institutions’ business strategy, governance, risk management and collateral valuation.
• There is still room for improvement from a methodological development and pragmatic perspective to ensure a common and consistent approach.
• A homogeneous framework, together with increased transparency in the value chain of the collateral valuation process are the most critical aspects to improve a consistent integration of climate-related risks in collateral valuation.

Replays are available here!