ESG risks & credit lending: EBA guidelines raise the bar for credit scoring

The European Banking Authority's (EBA) guidelines on ESG risks make environmental, social and governance factors an integral part of credit assessments. What does this mean for companies? How do ESG criteria influence the scoring? And what can companies do to optimally prepare for the new requirements? Find out everything you need to know now.

Sustainability as an integral part of bank lending

Sustainability is no longer a ‘nice-to-have’ - especially not in the world of finance. With the publication of the guidelines ‘EBA/GL/2025/01 - Guidelines on the management of environmental, social and governance (ESG) risks’ on 9 January 2025, the EBA is tightening the requirements for banks when dealing with ESG risks. These guidelines aim to systematically integrate ESG factors into the credit assessment, risk management and business strategy of banks - with direct consequences for companies seeking capital.

What does ESG mean in the financial context?

• E (Environmental): CO₂ emissions, use of resources, environmental risks
• S (Social): Working conditions, human rights, social commitment
• G (Governance): Business ethics, transparency, supervisory structures

These factors are increasingly being incorporated into risk analyses. In addition to the ethical dimension, ESG factors are also becoming increasingly important from an economic perspective, as they can significantly influence financial risks such as liability, reputational or transition risks (e.g. in the context of decarbonisation).

New regulatory requirements: EBA/GL/2025/01

• Integration into the lending process: ESG risks must be taken into account when assessing the creditworthiness of borrowers - both qualitatively and quantitatively.
• Governance and risk management: Credit institutions are obliged to embed ESG aspects into their strategies, organisational structures and internal control systems.
• Data requirements: Banks must obtain robust information on ESG risks - for example via sustainability reports, CSRD-compliant disclosure or ESG ratings.

Impact on the ESG scoring

For companies, this means that ESG criteria are increasingly influencing their financing conditions. ESG factors are already today included in the credit risk scoring of many banks - in the future, this will be the case on a widespread level.

This is no longer voluntary additional information, but an integral part of the risk assessment. 

How companies can prepare now

What used to only concern large corporations now affects all companies seeking financing from banks. According to the EBA, banks will in future have to systematically check how sustainable and resilient a company is positioned - even for smaller credit volumes.

Companies that want to obtain attractive financing conditions should act proactively: 

• Collect basic data: Start with simple KPIs such as energy consumption, CO₂ emissions, accident statistics or training measures.
• Build a transparent ESG database: Record ESG measures - even if no official report is required (yet) or introduce ESG reporting in accordance with the VSME or CSRD.
• Manage ESG risks systematically: Climate and reputational risks in particular should be assessed at an early stage.
• Early dialogue with financial institutions: Clarify which ESG data is expected in order to proactively communicate your ESG strategies.
• Check ESG ratings and sustainability certifications: Standards such as EcoVadis, DNK or EMAS can improve the ESG rating.
• Utilise funding opportunities: There are programmes that specifically support the ESG transformation of SMEs.

A concrete example: the L-Bank sustainability bonus 

• Interest subsidy of up to 0.2%
• Target group: Everyone!
• Free support with the application

Our full-service solution: We prepare all the necessary steps for you - with minimal effort on your part and direct cost reduction for your company. Your sustainability becomes visible and tangible, giving your company an additional image boost. 

Conclusion

The integration of ESG criteria into the lending business is no longer a vision of the future, but a regulatory reality. With the implementation of the EBA guidelines, the ESG performance of companies will become a key factor in financial scoring. Those who address the requirements at an early stage and create transparency will not only secure competitive advantages, but also access to capital in an increasingly sustainability-orientated financial world.

Get in touch with us if you need support with ESG data collection, reporting, assessment of your financing capability in the context of the new ESG guidelines or preparation for ESG-based financing discussions.

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Your contact partners: Max Wegele, Dr. Denise Ott