Public Hearing on the Revision of the Guidelines on Product Oversight and Governance Arrangements for Retail Banking Products to Consider Products with ESG Features and Greenwashing Risks

The European Banking Authority will hold a virtual public hearing on September 11 to discuss proposed revisions to the EBA Guidelines on product oversight and governance (POG) arrangements for retail banking products. The hearing addresses amendments aimed at preventing greenwashing and ensuring financial institutions meet the highest standards of business conduct when offering products with Environmental, Social, and Governance features to consumers, with registration required by September 8 at 5:00 pm CET.

Consultation Background

The EBA launched this public consultation proposing targeted revisions to existing POG Guidelines to address ESG-related conduct risks while avoiding additional regulatory burden on financial institutions. The proposed amendments aim to prevent consumer detriment from misleading commercial practices and mis-selling that may occur when institutions fail to comply with conduct requirements for ESG-featured products.

This initiative follows the EBA's June 2024 greenwashing report, which highlighted increasing potential cases across all sectors, including EU banks. Combined with recent legislative changes to the Capital Requirements Directive and Capital Requirements Regulation regarding ESG risks, the EBA determined that further consideration of ESG products and greenwashing risks within existing POG Guidelines was necessary.

The consultation proposes adjustments to specific existing requirements, including manufacturers' internal control functions, target market definition, distribution channels, information for distributors, and support arrangements. The EBA expects to publish final guidelines in Q1 2026, with application beginning December 1, 2026.

Regulatory Framework

The original POG Guidelines were issued in 2016 to address conduct failures affecting manufacturers and distributors of retail banking products, including mortgages, personal loans, deposits, payment accounts, payment services, and electronic money. These draft Guidelines are developed under Article 16 of Regulation (EU) No 1093/2010, ensuring effective and consistent application of European Union law.

Hearing Details

This virtual session provides stakeholders an opportunity to discuss the proposed Guidelines and their practical implications for ESG product development and distribution. The consultation period remains open until October 9, allowing participants to submit detailed comments following the hearing.

Registration is mandatory through the EBA's consultation page, with dial-in details provided to registered participants. All consultation responses will be published after the consultation closes unless confidentiality is specifically requested.