text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: Case C-911/19

text: , Judgment of the Court (Grand Chamber) of 15 July 2021. Fédération bancaire française (FBF) v Autorité de contrôle prudentiel et de résolution (ACPR) ECLI:EU:C:2021:599 See Directive

text: ELI: http://data.europa.eu/eli/dir/2013/36/oj https://eba.europa.eu/sites/default/files/documents/10180/2855746/fd963ed8-c392-433c-9d5f- 40e798659f24/EBA%20Report%20on%20the%20application%20of%20the%20guidelines%20on%20POG%20arrangement s.pdf?retry=1 https://www.eba.europa.eu/sites/default/files/document_library/Publications/Reports/2020/935640/Second%20EBA% 20report%20on%20the%20application%20of%20the%20POG%20guidelines%20arrangements.pdf

text: AMENDING POG GUIDELINES – FINAL REPORT

text: EBA/REP/2024/09: https://www.eba.europa.eu/sites/default/files/2024-05/a12e5087-8fd2-451f-8005- 6d45dc838ffd/Report%20on%20greenwashing%20monitoring%20and%20supervision.pdf https://www.esma.europa.eu/sites/default/files/library/request_to_esas_on_greenwashing_monitoring_and_supervis ion.pdf See

text: Regulation (EU) No 575/2013

text: ELI: http://data.europa.eu/eli/reg/2013/575/oj Directive

text: ELI: http://data.europa.eu/eli/dir/2005/29/oj Directive

text: ELI : http://data.europa.eu/eli/dir/2024/825/oj Directive 2024/1275 ELI: http://data.europa.eu/eli/dir/2024/1275/oj

text: AMENDING POG GUIDELINES – FINAL REPORT

text: Directive

text: ELI: http://data.europa.eu/eli/dir/2023/1791/oj Regulation

text: ELI: http://data.europa.eu/eli/reg/2010/1093/oj Directive

text: ELI: http://data.europa.eu/eli/dir/2014/17/oj https://www.eba.europa.eu/sites/default/files/2025-07/33a0ee15-9601-4c2b-828e- 1b09201a6e9f/CP%20on%20Draft%20Guidelines%20on%20sound%20management%20of%20third%20party%20risk.pd f

text: Regulation (EU) 2022/2554

text: , ELI: http://data.europa.eu/eli/reg/2022/2554/oj

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: EBA Guidelines on the sound management of third-party risk regarding non-ICT services

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: EIOPA -BoS-24/160: Microsoft Word - EIOPA-BoS-24-160- Opinion on sustainability claims and greenwashing

text: Final report on MiFID II guidelines on product governance ESMA 36-429234738-165:

text: Thematic notes on clear, fair and not misleading sustainability-related claims - ESG strategies

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: Regulation (EU) No 1093/2010

text: of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No

text: and repealing

text: Commission Decision 2009/78/EC

text: , (OJ L 331, 15.12.2010, p.12).

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: Directive

text: ELI: http://data.europa.eu/eli/dir/2005/29/oj

text: AMENDING POG GUIDELINES – FINAL REPORT

text: Directive

text: ELI : http://data.europa.eu/eli/dir/2024/825/oj

text: AMENDING POG GUIDELINES – FINAL REPORT

text: https://eba.europa.eu/sites/default/files/documents/10180/2855746/fd963ed8-c392-433c-9d5f- 40e798659f24/EBA%20Report%20on%20the%20application%20of%20the%20guidelines%20on%20POG%20arrangeme nts.pdf?retry=1 https://www.eba.europa.eu/sites/default/files/document_library/Publications/Reports/2020/935640/Second%20EBA %20report%20on%20the%20application%20of%20the%20POG%20guidelines%20arrangements.pdf

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: AMENDING POG GUIDELINES – FINAL REPORT

text: 31 to divergent interpretations. Some suggested adding ’when proposed by the EBA in its CP is also aligned with the EIOPA and ESMA representation of the necessary’ or ‘annually if necessary’ instead of ‘up to date’ to ensure guidance which use similar language and approach. See also most recent institution’s overall proportionality and feasibility. In addition, one respondent shared ESMA thematic note on clear, fair and not misleading sustainability - profile or the profile of the view that implementing harmonised practices to reduce the risk related claims published on 14 January 2026 . The EBA is of the view the product, including, of divergent supervisory interpretations. that it is appropriate to maintain the current wording referring to the where applicable, of ESAs common high-level understanding of greenwashing as set out the product with ESG Another respondent was of the view that further clarifications is mentioned in the EBA’s report on greenwashing monitoring and features, and are needed on whether the communication must include a description supervision and the EBA Guidelines on MESGR because it was developed presented in an at both company level and product level – or only at product level. by the three supervisory authorities for a common understanding across understandable Finally, in order to reduce compliance burdens for MSEs, one the three sectors (banking, investment and securities, insurance and manner, as also set respondent was of the opinion that the Guidelines should include pensions). Consequently, the EBA is of the view that the proposed out in the acceptance of recognized third-party labels (e.g., EU Ecolabel, wording in the CP should remain as it is. greenwashing-risk Climate Bonds) and allow for an "as-of-last-financial-year" related requirements Regarding the clarification requested by a respondent on the content of safe harbour for sustainability claims. in the EBA Guidelines the communication to consumers, the EBA clarifies that it should provide

publisher: Europeiska bankmyndigheten

title: Guidelines on product oversight and governance arrangements for retail banking products

serie: gl

text: 30 June 2026

type: stycke

text: Final report

type: rubrik

text: on the amending Guidelines on product oversight and governance arrangements for retail banking products to take into account products with ESG features and greenwashing risks

text: Contents

text: Executive Summary 4 1.Background and rationale 6 2.Guidelines 17

text: 1. Compliance and reporting requirements 18

text: 2. Addresses 19

text: 3. Implementation 19

text: 4. Amendments 19

text: 3. Accompanying documents 24

text: Abbreviations

text: BCBS Basel Committee on Banking Supervision CCD Consumer Credit Directive (Directive on credit agreements for consumers and repealing Directive

text: ) CRD Capital Requirements Directive (Directive

text: ) CRR Capital Requirements Regulation (

text: Regulation (EU) No 575/2013

text: ) DORA Digital Operational Resilience Act EBA European Banking Authority EIOPA European Insurance and Occupational Pensions Authority EmpCo Directive on empowering consumers for the green transition (Directive

text: ) ESA European supervisory authority ESMA European Securities and Markets Authority ESG Environmental, Social and Governance EU European Union FI Financial Institutions GL Guidelines MS Member State MCD Mortgage Credit Directive (Directive

text: ) MESGR Management of Environmental, Social and Governance Risks MiFID Markets in Financial Instruments Directive (Directive

text: ) POG Product oversight and governance for retail banking products SMTPR Sound management of third-party risk regarding non-ICT services SNCI Small-non-complex credit institutions

text: Executive summary

text: In response to the European Commission request for input addresses to the European Supervisory Authorities (ESAs), on 4 June 2024, the EBA published its final report on greenwashing monitoring and supervision , setting out the ESAs’ shared high‑level understanding of greenwashing and noting an increase in potential greenwashing cases across all sectors, including EU banks. The report sets out recommendations to address greenwashing-related aspects within prudential and conduct supervision, in particular by updating the EBA existing Guidelines on Product Oversight and Governance for retail banking products (POG) issued in 2016 so as to regulate the internal processes, functions and strategies aimed at designing retail banking products, bringing them to market, and reviewing them over their life cycle. Separately, the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR) were amended by the EU co-legislators regarding Environmental, Social and Governance (ESG) risks, to include new provisions and change existing ones, including requirements that form one of the legal bases of the POG Guidelines. Given these recent developments and the increasing risk of consumer detriment if financial institutions fail to comply with the highest standards of business conduct when offering product with ESG features, the EBA proposed in a public consultation, held from 9 July to 9 October 2025, to amend the existing POG Guidelines. After assessing the responses received, the EBA has clarified various provisions in the Guidelines and has adjusted some of the wording that it had proposed in the consultation paper (CP). This includes clarifications with the aim of making ESG and greenwashing considerations more explicit within the current requirements whenever such products are offered and sold to consumers. The Guidelines therefore adjust only a limited number of the existing requirements related to the subject matter, manufacturer’s internal control functions, the target market, distribution channels, information for distributors and information and support for the manufacturer’s arrangements. In addition to the amendments related to products with ESG features and greenwashing-risks, the Guidelines include ‘consequential’ updates to reflect changes introduced by the EBA Founding Regulation, the revision of EBA Guidelines on internal governance under the CRD and the sound management of third-party risk regarding non-Information and Communication Technology (ICT) services (SMTPR) without changing the substance of the POG Guidelines, per se (e.g. reference to the Consumer Credit Directive following the amendment of the EBA founding Regulation, deletion of some provisions related to competent authorities under the Mortgage Credit Directive (MCD), adjustment of wording, removal of the outdated chapter on outsourcing and introduction of a cross‑reference to the EBA Guidelines on SMTPR). The Guidelines also specify that the POG Guidelines should be read in conjunction with the EBA Guidelines on SMTPR and on the

text: See EBA/REP/2024/09: https://www.eba.europa.eu/sites/default/files/2024-05/a12e5087-8fd2-451f- 8005-6d45dc838ffd/Report%20on%20greenwashing%20monitoring%20and%20supervision.pdf

text: management of ESG risks (MESGR) for the financial institutions in their scope of application, with the aim to bring further legal certainty. Overall, the EBA has retained the substance of the amendments as proposed in the CP.

text: Next steps

text: The Guidelines will be translated into the official EU languages and published on the EBA website. The deadline for competent authorities to report whether they comply with the Guidelines will be two months after the publication of the translations. The Guidelines will apply from 11 January 2027.

text: 1. Background and rationale

text: 1.1 Background

text: 1. Developments in the markets for financial services in the period leading up to 2015 had shown that failures in the conduct of financial institutions towards their customers cause significant consumer detriment, undermine market confidence and in extremis can also lead to financial instability. To address some of the causal drivers of such conduct failure, the EBA issued in 2016 Guidelines on product oversight and governance for retail banking products (POG Guidelines,

text: ) for manufacturers and distributors of the retail banking products that fall within EBA’s regulatory remit, namely mortgages, personal loans, deposits, payment accounts, payment services, and electronic money. 2. The POG Guidelines provide a framework for robust and responsible product design and distribution by manufacturers and distributors and inter alia include requirements for manufacturers, with regard to their internal control functions; the identification of the target market; product testing; disclosure to consumers; product monitoring, remedial actions, and distribution channels. The objective of the POG Guidelines is for manufacturers and distributors to consider the needs of their customers when designing products and developing products with consumers’ interests, objectives and characteristics in mind. The legal basis of the Guidelines was subsequently assessed in a ruling by the Court of Justice of the EU , which confirmed that the POG Guidelines lay down principles intended to ensure effective processes to identify, manage and monitor risks as well as adequate internal control mechanisms within the meaning of Article 74(1) of the Capital Requirement Directive (CRD) . 3. In the years following the issuance of the Guidelines, the EBA also carried out two reviews into how the Guidelines were applied by the industry, which the EBA published in the form of 5 6 reports in July 2019 and November 2020 respectively. The reports identified good practices for some financial institutions but also found that many of them do not sufficiently put the required focus on ensuring that consumers’ needs are met in line with the Guidelines. The substance of the Guidelines themselves, by contrast, was found still to be fit for purpose without the need for revisions. As a result, the Guidelines have been applicable without any modifications since the EBA first issued them in 2016. 4. However, five recent regulatory developments make a revision of the Guidelines necessary. First, on 4 June 2024, the EBA published a final report on greenwashing monitoring and supervision , in response to a request that the ESAs had received from the European Commission to provide sector input on greenwashing issues . The report sets out the ESAs common high-level understanding of ‘greenwashing’, as a practice whereby sustainabilityrelated statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services and could be misleading to consumers, investors, or other market participants. More importantly, the report contained several recommendations, inter alia for the EBA to provide regulatory guidance that addresses greenwashing-related issues within prudential and conduct supervision. This so, the recommendations therein suggested updating the existing supervisory framework, including the EBA’s POG Guidelines. 5. Second, new provisions were introduced, and adjustments were made to several existing articles, in the CRD and the Capital Requirements Regulation (CRR), in relation to the current and forward-looking impacts of ESG risks. More specifically, a requirement was introduced in Article 76 of the CRD, which is related to one of the legal bases of the POG Guidelines and now requires the management body to develop concrete plans to address ESG risks. Furthermore, revised

text: Article 87

text: (a)(4) of CRD now requires NCAs to assess and monitor developments of institutions’ practices concerning their ESG strategy and risk management, including their sustainability-related product offerings. 6. Third, in 2024, the cross-sectoral Directive on unfair business-to-consumer commercial practices (Directive

text: ) has been amended in order to address commercial practices that mislead consumers and prevent them from making sustainable consumption choices. These rules introduced by the directive ‘empowering consumers for the green transition through better protection against unfair practices and through better information (Directive

text: ) and applicable from 27 September 2026, relate to practices associated with the early obsolescence of goods, misleading environmental claims and misleading information about the social characteristics of products or traders’ businesses including financial institutions. 7. Fourth, the EU has established a legislative framework to boost the energy performance of buildings that includes the Energy Performance of Buildings Directive (EU/2024/1275) and the Energy Efficiency Directive (EU/2023/1791) . This framework explicitly assigns a critical role to the banking sector in the provision of green loans, aiming to scale up financing to meet the investment needs for improving the energy efficiency of buildings. 8. These developments have led the EBA, akin to other Guidelines that the EBA revised to incorporate ESG considerations (in line with the holistic and sequenced approach described in the EBA Roadmap on Sustainable Finance (EBA/REP/2022/30)), to propose to amend the POG Guidelines to make explicit that manufacturers and distributors of retail banking products with ESG features should be subject to ESG and greenwashing risks requirements when such products are offered and/or sold to consumers. 9. These Guidelines are based on

text: Article 16 of Regulation (EU) No 1093/2010

text: , paragraph 3 of which requires competent authorities and financial institutions to make every effort to comply with these Guidelines. 10. In fulfilment of the aforementioned mandate and related provisions, the EBA published on 9 July 2025 a Consultation Paper (CP), which set out the EBA’s proposals for the amending Guidelines. The CP laid out the proposed content of the amendments regarding the subject matter, manufacturer’s internal control functions, the target market, distribution channels, information for distributors and information and support for the manufacturer’s arrangements. 11. In addition, ‘consequential’ updates were proposed due to changes introduced by the EBA Founding Regulation in 2020 (in relation to competent authorities under the Mortgage Credit Directive (MCD) , the introduction of the Consumer Credit Directive Directive

text: (in EBA’s remit), as well as the revision of the EBA Guidelines on outsourcing arrangements (

text: to take into consideration the Financial Stability Board toolkit for enhancing third-party risk management and oversight, the Basel Committee on Banking Supervision (BCBS) principles for the sound management of third party risks in the banking sector as well as the application of the Digital Operational Resilience Act (DORA) . 12. A public hearing was held on 11 September 2025. By the end of the consultation paper the EBA had received 13 responses, which the EBA subsequently assessed in detail, as presented in the feedback table in section 3.3.3 of this Final Report. 13. The Rationale section below provides an overview of the key changes that have been made, as a result of the public consultation, as well as the major concerns raised by respondents. The feedback table under 3.3.3 provides an exhaustive list of all comments received, and the EBA’s assessment thereof.

text: 1.2 Rationale

text: 14. Following the public consultation, and in view of the comments and requests for clarification from respondents, the EBA has made changes to the amending POG Guidelines, in relation to: - The scope of application and definition of other forms of credit for consumers; - Manufacturers’ internal control functions for the prevention of greenwashing practices - Provision of information related to products with ESG features and greenwashing by manufacturers to distributors; - Third-party arrangement; and - The extension of the date of application. 15. Additionally, the EBA introduced editorial amendments that were not sufficiently substantial to elaborate on them in this Rationale section such as: - an amendment to Guidelines 12.1.a) on the provision of information related to products with ESG features and greenwashing risks which is explained in the feedback table at the end of the Final Report, under point 16; - amendments to Guidelines 2.1 and 2.3 to align the wording with the revised EBA Internal Governance Guidelines under Article 74 of the CRD i.e. referring to ‘internal control framework’ instead of ‘risk management framework and internal control functions’ under Guidelines 2.1 or referring to ‘risk management functions’ instead of ‘risk control functions’; and - amendments to paragraph 9 and Guidelines 1.3, 2.1 and 2.3 adding the reference ‘under Article 74 of the CRD’, to clarify that the EBA Guidelines on internal governance are those issued under the CRD. 16. Finally, the EBA addressed comments that did not lead to any changes under the sub-section miscellaneous comments. 1.2.1 Scope of application and definition of other forms of credit for consumers 17. The current POG Guidelines apply to manufacturers and distributors of products offered and sold to consumers and specify POG arrangements in relation to retail banking products that fall within the EBA’s regulatory scope. They consequently apply to all credit agreements relating to immovable property as defined by the MCD in the form of deferred payments, loans or other similar financial accommodations. Before the amendment to the EBA founding Regulation in 2020 the POG Guidelines also applied to consumer credit offered by credit institutions under the CRD, but they did not apply to such credit being offered by other, non-bank creditors, as these, and the CCD as such, were not in the EBA’s scope of action at the time the Guidelines were issued. 18. However, in 2020, as part of the review of the ESAs Founding Regulations, the EBA’s scope of action was extended to the Consumer Credit Directive (

text: ). The EBA proposed in the CP to update the scope of application of the POG Guidelines that is set out in paragraph 6 and in the definitions of manufacturer and products set out in paragraph 15 to apply the POG Guidelines to all retail banking products in the EBA’s remit, including consumer credits provided by non-bank creditors under the CCD (Directive on credit agreements for consumers and repealing Directive

text: ) . 19. The majority of respondents supported applying the POG Guidelines to non-bank creditors under the CCD. In their view it would ensure a level playing field among all providers of retail products, prevent over-indebtedness and bad lending practices as well as fostering greater consumer trust in the market. However, one respondent was of the view that the EBA should conduct a segmented cost-benefit analysis to assess the impact on ‘small community lenders’ as, according to this respondent, the impact might be material. 20. The EBA has assessed the feedback received and is of the view that the CCD gives a significant number of options to Member States during the transposition of the Directive into national law, including on the precise entity and product scope of the transposed law. The resultant divergences between the national laws do not allow for a uniform inclusion of the Directive into the Guidelines that would capture all possible variations of the product and entity scopes that will be set out in the national transpositions of the CCD. The EBA therefore arrived at the view that these divergences between transpositions under the CCD need to be recognised explicitly in the POG Guidelines, by adding ‘Directive as transposed in the respective Member States’ in the scope of the Guidelines. 21. Consequently, the EBA has amended paragraph 6 of the POG Guidelines related to the ‘scope of application’ by adding ‘Directive as transposed in the respective Member States'. In addition, in response to a comment received from one respondent calling for a cost-benefit analysis of the implications for micro, small and medium enterprises, the EBA has amended its impact assessment, which now explains that the impact might vary depending on the choices that Member States have made during the transposition of the Directive. The EBA also specifies that these cost-benefit implications are not covered by EBA’s impact assessment. 22. Finally, the inclusion of the CCD in para 6 of the Guidelines necessitates two consequential and non-substantive changes elsewhere, which is i) for ‘other products’ to be added to paragraph 7, to reflect the existing supervisory power of NCAs to apply the Guidelines to entities and products that are not in the scope of the EBA Guidelines but are in the NCA’s remit, and ii) for letter ‘h’ related to ‘product’ to be removed from paragraph 13, as the explicit reference to CCD in the POG Guidelines no longer requires such as reference. In the EBA’s view, this approach preserves a harmonised baseline of consumer protection while allowing for a national implementation of the Guidelines by NCAs that is reflective of the legislative choices made by Member States during the transposition of the Directive.

text: ELI: http://data.europa.eu/eli/dir/2023/2225/oj

text: 1.2.2 Manufacturers’ internal control functions for the prevention of greenwashing practices 23. The CP proposed in Guideline 2.1a) that the manufacturer’s management body should put in place sound processes to identify, monitor, prevent and manage risks resulting from greenwashing or perceived greenwashing practices, consistent with the requirements in the EBA Guidelines on the management of ESG risks (MESGR), where products with ESG features are offered and/or sold to consumers. 24. Some respondents requested clearer wording in that Guideline, because in their views the current text could be misinterpreted as addressing greenwashing after it occurs rather than preventing it. Some other respondents requested further clarifications regarding some of the terminology used, such as the term ‘perceived greenwashing’, with one respondent proposing instead to focus on identifying and managing greenwashing practices themselves, not just the resulting risks. 25. The EBA assessed the concern expressed regarding the wording of ‘perceived greenwashing’ and clarified that this term is used to ensure consistency with the wording in the EBA Guidelines on MESGR. The wording in the Guidelines refers to actual and potential alleged greenwashing occurrences, where consumers or stakeholders believe that a financial product or institution may be engaging in greenwashing, even if this cannot be objectively verified until a court ruling confirms it. To this end, the EBA arrived at the view that the wording ‘perceived greenwashing’ in Guideline 2.1.a) should stay as is. 26. The EBA then assessed comments that the wording to ‘prevent and manage risks resulting from greenwashing’ could be interpreted as concentrating solely on the internal risk implications for institutions, without sufficiently reflecting the overarching objective of ensuring that product governance arrangements actively prevent greenwashing practices towards consumers. The EBA agrees with the concern and arrived at the view that Guideline 2.1.a) should make clear that management bodies must put in place appropriate arrangements against greenwashing before and after it occurs. Such requirements will enable both the identification and prevention of greenwashing practices (before greenwashing occurs) and the mitigation and monitoring of greenwashing risks (after it occurs), including the active prevention of misleading ESG related claims or representations throughout product design, approval, monitoring and review. 27. Consequently, the EBA amended the wording of Guideline 2.1.a) as such that the manufacturer’s management body should now put in place sound processes to ‘identify, and prevent greenwashing practices’ and kept the reference to ‘manage and monitor risks resulting from greenwashing or perceived green-washing practices’. 28. In addition, following the concerns raised by some respondents opposing a reference to the EBA Guidelines on MESGR because in their view it could create additional requirements to FIs, the EBA clarified that the intention of the reference to EBA Guidelines on MESGR is not to include prudential requirements such as prudential scenario‑analyses into the POG Guidelines but instead ensure coherence of terminology and expectations where misleading sustainability claims could produce both prudential effects and consumer‑protection harm (via reputational damage, conduct and litigation risk). The EBA explained further that the reference to the EBA Guidelines on MESGR in the POG Guidelines was intended to be limited to greenwashing-risks. 29. Thus, with the aim to bring more clarity, the EBA amended the wording in Guidelines 2.1.a) to recall that the requirements on greenwashing are ‘also set out’ (instead of the wording ‘consistent with’ that the CP had proposed) in the existing greenwashing-risk related requirements in the EBA Guidelines on MESGR, where products with ESG features are offered or sold to consumers. In addition, the EBA amended paragraph 9 related to the scope of application to specify that the POG Guidelines should be read in conjunction with the EBA Guidelines on the MESGR for the FIs in their scope of application, with the aim to bring further legal certainty. 1.2.3 Provision of information related to products with ESG features and greenwashing by manufacturers to distributors 30. The CP proposed to introduce a new paragraph c) under Guideline 8.3 listing conditions for sustainability related communication and sustainability claims which are consistent with the requirements in the EBA Guidelines on MESGR, where products with ESG features are offered or sold to consumers. 31. Several respondents supported the approach proposed by the EBA, stressing the importance, in their views, for distributors to be well informed about the specific ESG product features to properly sell/offer the product to consumers for whom the product may be suitable. Others stressed that, according to them, it would also prevent unsustainable FIs to sell products as sustainable and thus failing to meet consumer expectations which expect to buy a product to a sustainable FI. 32. In addition, some respondents supported the inclusion of paragraph 8.3 c) to improve transparency, considering that it is in line with existing non-banking products requirements. Those respondents were, however, of the view that the wording ‘where applicable’ should be removed as according to them it could result in products with ESG features being excluded from the required checks and leading to potential greenwashing. 33. The EBA assessed the concerns raised and arrived at the view that a risk of misinterpretation exists and therefore Guideline 8.3.c) should be refined to make it clear that alignment with the EBA Guidelines on MESGR applies only to governance and communication-related expectations aimed at preventing greenwashing in the context of products with ESG features being offered or marketed. 34. In addition, following the concerns raised by some respondents opposing a reference to the EBA Guidelines on MESGR, because in their view this could create additional requirements to FIs. The EBA clarified that the intention of the reference to EBA Guidelines on MESGR is not to include prudential scenario‑analysis requirements into the POG Guidelines, but rather to ensure coherence of terminology and expectations where misleading sustainability claims could produce both prudential effects and consumer‑protection harm (via reputational damage, conduct and litigation risk). The EBA clarified further that the reference to the EBA Guidelines on MESGR in the POG Guidelines was intended to be limited to greenwashing-risk related requirements. 35. Thus, similarly to the change introduced to Guideline 2.1.a), with the aim to bring more clarity, the EBA amended the wording in Guidelines 8.3.c) to recall that the requirements on greenwashing are ‘also set out’ (instead of the wording ‘consistent with’ that the CP had proposed) in the greenwashing-risk related requirements in the EBA Guidelines on MESGR, where products with ESG features are offered or sold to consumers. In addition, the EBA amended paragraph 9 related to the scope of application to specify that the POG Guidelines should be read in conjunction with the EBA Guidelines on the MESGR for the FIs in their scope of application, with the aim to bring further legal certainty. 1.2.4 Third-party arrangements 36. The EBA proposed in the CP to amend Chapter 6 of the POG Guidelines on outsourcing to take into consideration the Financial Stability Board toolkit for enhancing third-party risk management and oversight, the BCBS principles for the sound management of third-party risk in the banking sector, as well as the application of DORA. They amended the title to replace ‘outsourcing’ by ‘third party arrangements’ and clarified that ‘where the activity of manufacturing and/or distributing is in whole or in parts provided by third-party services providers, in case manufacturers and, where applicable, distributors, are any of the financial entities referred to in the EBA Guidelines on the sound management of third-party risk 19, regarding non-ICT services they should ensure they comply with those Guidelines, including with the requirements on the ultimate responsibility of financial entities relying on third-party services providers’. 37. In response to the CP, several respondent were of the view that the amendment in the CP could excessively broaden the scope of ‘third-party’ definition as well as lead to more complexity in the application of the requirements. In addition, several respondents were of the opinion that the Guidelines should clarify that only manufacturers and distributors within scope must comply with the EBA Guidelines on SMTPR. Finally, several respondents held the view that there will be a two-year transition period for the FIs from the date of application of the EBA Guidelines on the SMTPR and the application date of the amending POG Guidelines should be aligned with this timeline. 38. The EBA assessed the concerns raised and clarified that outsourcing is a subset of third partyrisk management which needs to comply with the BCBS principles, DORA and the EBA guidelines on SMTPR. The EBA, however, agreed that maintaining a chapter on third-party arrangement in the POG Guidelines might bring complexity as the scope of application of the Guidelines on SMTPR is limited to the FIs in its scope when the FIs subject to the POG Guideline might be broader. The EBA therefore deleted Chapter 6 on outsourcing/third-party arrangements proposed respectively in the existing POG GLs and in the CP and instead added a general cross-reference to the EBA Guidelines on the SMESGR in paragraph 9 related to the scope of application. The amendment specifies that the POG Guidelines should be read in conjunction with the EBA Guidelines on the SMTPR for the FIs in the scope of application of the Guidelines, with the aim to bring more clarity and legal certainty. 1.2.5 Extension of the application date 39. The EBA proposed in the CP to set the application date as 1 December 2026, with the aim of aligning it with the application date of the revised CCD. In response to the CP, several respondents, including BSG members, were of the view that the EBA Guidelines on MESGR are not applicable to small and non-complex institutions (SNCI) until January 2027, which could create inconsistencies and legal uncertainty if the POG Guidelines take effect earlier. The respondents were therefore of the view that the application dates of the amending POG GLs should be aligned with the EBA GLs on MESGR to give sufficient time to smaller financial institutions to adapt. 40. The EBA assessed the responses provided by respondents and agreed with the point raised that smaller institutions may require additional time to adapt their internal arrangements and infrastructure, and the application date of the revised POG Guidelines should remain proportionate, realistic and operationally feasible. The EBA therefore amended the date of application of the Guidelines to 11 January 2027, in the section of the GLs related to implementation, to align it with the application date of the EBA Guidelines on the MESGR applicable to SNCI. 1.2.6 Miscellaneous comments 41. Amongst the comments from respondents that did not lead to any changes, including comments from BSG members, first, several respondents were of the view that amendments to the POG Guidelines lack a clear legal basis and an ESG mandate, could create unnecessary complexity, legal uncertainty or disproportionate burdens, calling instead for stability and proportionality in line with the EU simplification agenda. 42. The EBA in response reaffirmed that it has developed the POG Guidelines in accordance with

text: , which empowers the EBA to issue guidelines to ensure the effective and consistent application of European Union law. The EBA clarified that the legal basis of the Guidelines was subsequently confirmed in ruling

text: of the Court of Justice of the EU as laying down principles intended to ensure effective processes to identify, manage and monitor risks as well as adequate internal control mechanisms within the meaning of Article 74(1) of CRD. As such, EBA explained further that the POG Guidelines may be updated as necessary to ensure that they remain aligned with the evolving Level 1 requirements on which the Guidelines are based, such as the introduction of

text: Article 87

text: a(5) of the CRD. 43. Second, several respondents were of the view that the EBA used ambiguous language and the wording such as ‘fair, clear and not misleading’, ‘understandable manner’, and ‘up to date’ could lead to divergent interpretations and disproportionate burdens. The EBA clarified that such formulations mirror the terminology already used in multiple EU legislative acts governing consumer protection and the ESAs common high-level understanding of greenwashing, as set out in the EBA’s report greenwashing monitoring and supervision and the EBA Guidelines on MESGR. The EBA explained further that the wording proposed by the EBA in its CP is also aligned 20 21 with the EIOPA and ESMA guidance which use similar language and approach, including the most recent ESMA thematic note on clear, fair and not misleading sustainability -related claims published on 14 January 2026 . Finally, the EBA added that should respondents needs further examples of product with ESG features, the EBA 2021 Report on ESG risks management and supervision includes in Annex a non-exhaustive list of ESG factors that can help institutions to identify ESG features. As a result, the EBA concluded that additional changes to clarify the definitions, or to add examples are unnecessary and the proposed wording in the CP should remain as it is. 44. Third, other respondents were of the view that any reference to the EBA Guidelines on MESGR should be supplemented with citations to the specific provisions relevant to greenwashing. The EBA clarified that the EBA Guidelines on the MESGR contain only a single reference to greenwashing risk (paragraph 76). As a result, there is no need to supplement the general references to greenwashing risk in the proposed amendments under points 2.1(a), 8.3(c) or 12.1(a) with an explicit paragraph reference, as this does not give rise to any risk of confusion. 45. Fourth, respondents were also of the view that the reference to credit intermediaries under the MCD should be maintained. The EBA clarified that credit intermediaries falling under the scope of the MCD continue to be covered by the POG Guidelines as set in paragraph 6 of the POG Guidelines on the scope of application. Indeed, this paragraph states that the POG Guidelines apply to manufacturers and distributors of products offered and sold to consumers including entities falling in the scope of Article 7(1) of the MCD which establishes conduct‑of‑business obligations for credit intermediaries and appointed representatives. The EBA therefore concluded that no amendment is required and the deletion should be maintained under paragraph 7 of the Guidelines. 46. Fifth, some respondents were of the view that placing responsibility on distributors for verifying sustainability claims under Guideline 12.1.a) related to ‘information and support for the manufacturer’ should remain with manufacturers who are supposed to provide all the relevant information for the distribution channels. Conversely, several respondents supported requiring distributors to ensure that sustainability claims provide a fair representation of the institution’s overall profile and of the product with ESG features, in line with MESGR guidelines, to maintain consumer confidence. The EBA confirmed that manufacturers remain the main source of accurate product information, however, the EBA reiterated that the POG Guidelines provide a tool to mitigate the risk of greenwashing at all stages from product manufacturing to distribution of retail banking products and confirms the responsibility also lies with the distributors. The EBA therefore was of the view that no amendment is required to the proposal in the CP. 47. Finally, one respondent was of the view that the requirements in the POG GLs might not be sufficiently proportionate for MSE. The EBA clarified that the principle of proportionality is already embedded in the POG Guidelines, allowing institutions to implement POG arrangements according to their nature, scale, and complexity, organisational structure, product range, and risk. The EBA therefore considers that maintaining this flexible, principles‑based approach is sufficient and that no amendment is required. 48. Further details on the EBA’s assessment of the consultation responses are provided in the feedback table in section 3.3.3 below.

text: 2. Guidelines

text: 30 June 2026

text: Guidelines

text: amending Guidelines

text: on product oversight and governance arrangements for retail banking products

text: 1. Compliance and reporting obligations

text: Status of these guidelines

text: This document contains guidelines issued pursuant to

text: . In accordance with

text: Article 16(3) of Regulation (EU) No 1093/2010

text: , competent authorities and financial institutions must make every effort to comply with the guidelines. Guidelines set the EBA view of appropriate supervisory practices within the European System of Financial Supervision or of how Union law should be applied in a particular area. Competent authorities as defined in

text: Article 4(2) of Regulation (EU) No 1093/2010

text: to whom guidelines apply should comply by incorporating them into their practices as appropriate (e.g. by amending their legal framework or their supervisory processes), including where guidelines are directed primarily at institutions.

text: Reporting requirements

text: According to

text: , competent authorities must notify the EBA as to whether they comply or intend to comply with these guidelines, or otherwise with reasons for non-compliance, by [dd.mm.yyyy]. In the absence of any notification by this deadline, competent authorities will be considered by the EBA to be non-compliant. Notifications should be sent by submitting the form available on the EBA website with the reference ‘

text: ’. Notifications should be submitted by persons with appropriate authority to report compliance on behalf of their competent authorities. Any change in the status of compliance must also be reported to EBA.

text: 2. Addresses

text: These guidelines are addressed to competent authorities as defined in

text: Article 4

text: point (2) of

text: Regulation (EU) No 1093/2010

text: and to financial institutions as defined in Article 4(1) of Regulation No 1093/2010.

text: 3. Implementation

text: Date of application

text: These guidelines apply from 11 January 2027.

text: 4. Amendments

text: The EBA Guidelines

text: on product oversight and governance arrangements for retail banking products are amended as follows: (i) Amendments to Chapter 2 ‘Subject matter, scope and definitions’: 1. Paragraph 5 is replaced by the following: ‘5. These Guidelines deal with the establishment of product oversight and governance arrangements for both manufacturers and distributors as an integral part of the general organisational requirements linked to internal control systems of firms. They refer to internal processes, functions, and strategies aimed at designing products bringing them to the market and reviewing them over their life cycle. They establish procedures relevant for ensuring the interests, objectives and characteristics of the target market are met. Those product oversight and governance arrangements should also be established by manufacturers and distributors for products with Environmental, Social and Governance (ESG) features, should they offer and sell those products to consumers. However, these Guidelines do not deal with the suitability of products for individual consumers.’ 2. In paragraph 6, ‘CRD IV’ is replaced by ‘CRD’ and the following point is added: ‘Article 32 (1) of Directive 2023/2225 (the “Directive on credit agreements for consumers and repealing Directive

text: (CCD)”).’ Directive as transposed in the respective Member States. 3. Paragraph 7 is replaced by the following: ‘7. Competent authorities may wish to consider applying these Guidelines to other products or other entities in their jurisdictions that do not fall within the scope of the legislative acts referred to above but for which the competent authorities have supervisory responsibilities.’ 4. Paragraph 9 is replaced by the following: ‘9. These Guidelines supplement other EBA guidelines that may be relevant to product oversight and governance, in particular, the EBA Guidelines on Internal Governance under Article 74 of the CRD. These Guidelines should also be read in conjunction with the EBA Guidelines on the sound management of third-party risk regarding non-ICT services and the EBA Guidelines on management of ESG risks for the financial institutions in their respective scope of application.’ 5. Paragraphs 12 and 13 are deleted from the section ‘Addressees’. 6. In paragraph 15 the following point is added in the definition of the term ‘manufacturer’: ‘e) a creditor as defined in

text: Article 3

text: point (2) of the CCD’ 7. In paragraph 15, in the definition of the term ‘product’, point f), ‘CRD IV’ is replaced by ‘CRD’ and point a) is replaced by the following: ‘a) ‘credit agreements’ as defined in

text: Article 4(3)

text: MCD and Article 3(3) of the CCD; 8. In paragraph 15, in the definition of the term ‘product’, point h) has been deleted (i) Amendments to Guideline 1: Establishment, proportionality, review and documentation 9. Guideline 1.3 is replaced by the following: ‘1.3 When launching a new product the manufacturer should ensure that the product oversight and governance arrangements are considered in the new product approval policy (NPAP) in line with the EBA Guidelines on Internal Governance under Article 74 of the CRD in cases where they apply.’ (ii) Amendments to Guideline 2: Manufacturers’ internal control functions 10. Guideline 2.1 is replaced by the following:

text: : Final Guidelines on the management of ESG risks.pdf

text: ‘2.1 The manufacturer should ensure that product oversight and governance arrangements are an integral part of its governance arrangements, including the internal control framework as referred to in the EBA Guidelines on Internal Governance under Article 74 of the CRD, where applicable. To that end, the manufacturer’s management body should endorse the establishment of the arrangements and subsequent reviews.’ 10. The following Guideline 2.1a is inserted: ‘2.1a The manufacturer’s management body should put in place sound processes to identify, and prevent greenwashing practices and to manage and monitor risks resulting from greenwashing or perceived greenwashing practices, as also set out in the existing greenwashing-risk related requirements in the EBA Guidelines on the Management of ESG risks , where products with ESG features are offered or sold to consumers.’ 11. Guideline 2.3 is replaced by the following: ‘2.3 The responsibilities for the oversight of this process by the Risk Management function and the Compliance function should be integrated into their perimeter and normal line of duties as outlined in the EBA Guidelines on internal governance under Article 74 of the CRD, where applicable.’ 12. Guideline 2.4 is replaced by the following: ‘2.4 Senior management should ensure that staff involved in designing a product are familiar with and follow the manufacturer’s product oversight and governance arrangement; are competent and appropriately trained; and understand and are familiar with the product’s features, characteristics and risks, including, where applicable, those related to products with ESG features.’ (iii) Amendments to Guideline 3: Target market 13. Guideline 3.1 is replaced by the following: ‘3.1 Manufacturers should include, in their product oversight and governance arrangements, steps and features, including, where applicable, ESG features, that need to be followed, to identify, and update when necessary, the relevant target market of a product.’ 14. Guideline 3.2 is replaced by the following: ‘3.2 The manufacturer should, having first identified the target market, ensure that the product, including, where applicable, the product with ESG features, is deemed appropriate for the interests, objectives and characteristics of the identified target market(s).’ 15. Guideline 3.3 is replaced by the following: ‘3.3 The manufacturer should only design and bring to the market products with features, including, where applicable, products with ESG features, charges and risks, that meet the interests, objectives and characteristics of, and are of benefit to, the particular target market identified for the product.’ (iv) Amendments to Guideline 7: Distribution channels 16. Guideline 7.1 is replaced by the following: ‘7.1 The manufacturer should select distribution channels that are appropriate for the particular target market. To that end, the manufacturer should select distributors that have the appropriate knowledge, expertise and capability to correctly place each product in the market and to provide appropriate information explaining the characteristics and risks of the product to the consumers, including, where applicable, those related to the product with ESG features. When selecting its distribution channels, the manufacturer may consider limiting the distribution of a specific product to channels that offer specific features to consumers.’ (v) Amendments to Guideline 8: Information for distributors 17. The following letter is added to Guideline 8.3: ‘c) where applicable, namely for product with ESG features, to ensure that sustainability related communication is fair, clear, and not misleading, and that sustainability claims are accurate, substantiated, up to date, provide a fair representation of the institution’s overall profile or the profile of the product, and are presented in an understandable manner, as also set out in the greenwashing-risk related requirements in the EBA Guidelines on the management of ESG risks’ (vi) Amendments to Guideline 12: Information and support for the manufacturer’s arrangements 18. Guideline 12.1 is replaced by the following: ‘12.1 The distributor should take into account the information provided by the manufacturer and disclose to the consumer, including, where applicable, for the product with ESG features, a description of the main characteristics of the product, its risks, and the total price of the product to be paid by the consumer, including all related fees, charges, and expenses, as well as providing additional material supplied by the manufacturer to be used by the target market.’ 19. The following Guideline 12.1a is inserted: ‘12.1a The distributor should, for products with ESG features offered and sold, ensure that sustainability related communication is fair, clear, and not misleading, and that sustainability claims are accurate, substantiated, up to date, provide a fair representation of the institution’s overall profile or the profile of the product, and are presented in an understandable manner, as also set out in existing the greenwashing-risk related requirements in the EBA Guidelines on the management of ESG risks.’ (vii) Amendments to Chapter 6 ‘Outsourcing’: 20. Chapter 6 ‘Outsourcing’ is deleted

text: 3. Accompanying documents

text: 3.1 Cost-benefit analysis / impact assessment

text: 49. As per

text: Article 16(2) of Regulation (EU) No 1093/2010

text: (EBA Regulation), any guidelines and recommendations developed by the EBA shall be accompanied by an Impact Assessment (IA), which analyses ‘the potential related costs and benefits’. This analysis presents the IA of the main policy options included in this Consultation Paper on the draft Guidelines amending the Guidelines (

text: ) on POG, to take into account products with ESG features and greenwashing risks (‘the draft Guidelines’). The IA is high level and qualitative in nature. 3.1.1 Problem identification and background 50. Developments in the markets for financial services in the period leading up to 2015 had shown that failures in the conduct of financial institutions towards their customers cause significant consumer detriment, undermine market confidence and in extremis can also lead to financial instability. To address some of the causal drivers of such conduct failure, the EBA issued in 2016 Guidelines on product oversight and governance (POG,

text: ) for manufacturers and distributors of retail banking products ‘POG Guidelines’ that fall within EBA’s regulatory remit, namely mortgages, personal loans, deposits, payment accounts, payment services, and electronic money. The Guidelines have been applicable without any modifications since the EBA first issued them in 2016. 51. However, five recent regulatory developments make a revision of the Guidelines necessary. First, on 4 June 2024, the EBA published a final report on greenwashing monitoring and supervision, which contained several recommendations, inter alia for the EBA to provide regulatory guidance that addresses greenwashing-related issues within prudential and conduct supervision. Second, new provisions were introduced, and adjustments were made to several existing articles, in the CRD and the CRR, in relation to the current and forward-looking impacts of ESG risks. More specifically, a requirement was introduced in Article 76 of the CRD, which is related to one of the legal bases of the POG Guideline and now requires the management body to develop concrete plans to address ESG risks. Furthermore, revised

text: Article 87

text: (a)(4) of CRD now requires NCAs to assess and monitor developments of institutions’ practices concerning their ESG strategy and risk management, including their sustainability-related product offerings. Third, in 2024, the Directive on unfair business-to-consumer commercial practices has been amended in order to address commercial practices that mislead consumers and prevent them from making sustainable consumption choice . Fourth, the EBA founding Regulation (EU 1093/2010) was amended and explicitly brought consumer credit as defined in the CCD (

text: ) into the EBA’s regulatory remit, as a result of which the EBA is in a position to add this product fully into the scope of the POG Guidelines. The EBA Guidelines on outsourcing arrangements are also currently under revision to take into consideration the Financial Stability Board toolkit for enhancing third-party risk management and oversight, the BCBS principles for the sound management of third-party risk in the banking sector as well as the application of DORA. Finally, this timely update of the POG GL occurs in a context where the EU has established a legislative framework to boost the energy performance of buildings, that includes the Energy Performance of Buildings Directive (EU/2024/1275) and the Energy Efficiency Directive (EU/2023/1791). This framework explicitly assigns a critical role to the banking sector in the provision of "green" loans, aiming to scale up financing to meet the investment needs for improving the energy efficiency of buildings. 3.1.2 Policy objectives 52. The draft Guidelines objectives is thus to update the POG Guidelines to contribute to the fight, at its level, against greenwashing and so that the latest linked regulatory changes, and mainly ESG ones, are taken into account in these Guidelines. 3.1.3 Options considered, assessment of the options and preferred options 53. Section C. presents the main policy options discussed and the decisions made by the EBA during the development of the draft Guidelines. Advantages and disadvantages, as well as potential costs and benefits from the qualitative perspective of the policy options and the preferred options resulting from this analysis, are provided. Level of inclusion of ESG in the POG Guidelines 54. The draft Guidelines objective is mainly to take into account the related ESG regulatory changes in the POG Guidelines. With regards to the level of ESG requirements to be added in the POG Guidelines, two options have been considered by the EBA: - Option 1a: Adapting the existing requirements of the POG Guidelines to the ESG related regulatory changes by adding detailed and additional requirements for ESG. - Option 1b: Adapting the existing requirements of the POG Guidelines to the ESG related regulatory changes in a limited and targeted way. 55. Adapting the existing requirements of the POG Guidelines to the ESG related regulatory changes was deemed necessary in order to contribute to answer (in its own area) to the identified issue of greenwashing and keep a consistent regulatory framework. This would bring the benefit of increasing customers’ confidence in the ESG products’ elements and related communication. One could say that, implicitly, the product’s ESG elements were already covered by the POG Guidelines but updating the POG Guidelines with the inclusion of the ESG elements would make sure that they are taken into account and would prevent a possible disparity of treatment between those elements and the other products’ elements. 56. Adding in the POG Guidelines supplementary specific requirements related to ESG was an option foreseen during the elaboration of the draft Guidelines. It would have had the benefit of putting at a higher level of scrutiny the ESG elements and to increase the level of consideration of the customers’ needs with this regard. Nonetheless, the existing POG Guidelines have been found fit for purpose since 2016 for the other elements than the ESG (the EBA carried out two reviews into how the Guidelines were applied by the industry, which the 25 26 EBA published in the form of reports in July 2019 and November 2020 respectively , and the EBA found that the substance of the Guidelines themselves were fit for purpose without the need for revisions) and therefore are deemed to be fit for purpose regarding the ESG elements. Furthermore, the potential benefits of supplementary requirements would not justify the additional costs triggered that institutions would support. Regarding the cost-benefit implications for micro, small and medium enterprises (which are not covered by this impact assessment), the revised CCD provides Member States with discretion when transposing the Directive into national law, including on the precise entity and product scope of the transposed law. As a result, the impact might vary depending on the choices that Member States have made during the transposition of the Directive. 57. On these grounds, the Option 1b has been chosen as the preferred option and EBA will adapt the existing requirements of the POG Guidelines to the ESG related regulatory changes but not add detailed and additional requirements for ESG. 3.1.4 Conclusion 58. The development of draft Guidelines on the revision of the POG Guidelines will contribute, at its level, to the fight against greenwashing and take into account the latest regulatory changes, mainly ESG ones. The benefits are deemed to exceed the costs associated with these draft Guidelines which are not supposed to be material and are partly driven by underlying changes in CRR and CRD and other legislations related to ESG and greenwashing. As such these draft Guidelines hence should achieve, with acceptable costs, their objectives.

text: 3.2 Views of the Banking Stakeholder Group

text: 59. The EBA's Banking Stakeholder Group (BSG) submitted its views on the EBA's Consultation Paper. The BSG members expressed divergent views on the proposed amendments to the POG Guidelines. 60. Several members supported the EBA’s proposal to amend the 2016 Guidelines and to align them with the current regulatory framework, and raised no objections. 61. Other members cautioned that amendments in the CP would risk, in their view, generating unnecessary complexity. They underlined that the EBA has no explicit mandate from the co‑legislators to revise product governance requirements for retail products and exercises such powers solely under Article 74 of the CRD. In the context of regulatory simplification and competitiveness, the same BSG members urged the EBA not to create what they consider to be legal instability, to limit revisions to what is strictly necessary, and to preserve coherence across legislative instruments. Those members also considered that, for SNCI, the revised POG Guidelines should be more proportionate and not apply earlier than the separate EBA Guidelines on MESGR, which set an application date for January 2027. 62. The BSG also supported extending the scope of the Guidelines to non‑bank creditors under the CCD and suggested keeping credit intermediaries under the MCD advocating for a level playing field, consistent consumer protection, and safeguards against over‑indebtedness. 63. On substantive provisions, some BSG members supported the targeted amendments, while others requested more clarity on what constitutes a product with ‘ESG characteristics’, particularly for traditional banking products where such features may be less readily identifiable. Those BSG members also asked that any reference to the EBA Guidelines on MESGR be supplemented with citations to the specific provisions relevant to greenwashing, noting that they consider those Guidelines to be predominantly prudential in nature and that greenwashing is addressed only in paragraph 76 of section 5.6.4. 64. Finally, regarding the new chapter on third-party arrangement (chapter 6), some BSG members supported the changes, noting that increasingly complex financial sector supply chains justify stronger transparency and supervisory consistency, whereas other members opposed to such changes arguing that referring to the EBA Guidelines on SMTPR in a separate chapter would broaden the ‘third party’ definition which according to them might include ‘other external procurement’ (such as one-off or occasional service providers) and create unnecessary administrative burden. These BSG members were of the view that it may deter banks from engaging with new or short-term third-party providers and continued, by stressing that it could go against the EU objective of simplifying ESG requirements. They also shared the view that manufacturers and distributors should only comply with those guidelines where they fall within scope of the SMTPR.

text: 3.3 Feedback on the public consultation and the BSG submission

text: 3.3.1 Summary of key issues raised by respondents and EBA feedback 65. As explained in the rationale section above, respondents raised several concerns which have been raised in the different sections of the rationale section including in the part miscellaneous concerns. 3.3.2 The EBA’s response to the Banking Stakeholder Group’s submission 66. As described in section 3.2, the BSG made a number of comments on the draft Guidelines which are mainly addressed below. 67. First, the EBA acknowledges BSG members’ support and reiterates that the amendments introduced aim to align the POG Guidelines with recent legislative developments while preserving regulatory clarity. The EBA also acknowledges the BSG’s support for extending the POG Guidelines to non‑bank creditors under the Consumer Credit Directive. 68. Second, the EBA notes the concerns raised regarding the EBA mandate, the lack of alignment with the simplification principle and lack of proportionality. The EBA reiterates what it expressed in the CP, which is that its competence to issue and amend guidelines derives from

text: , and that in its ruling

text: the Court of Justice of the EU has confirmed that the POG Guidelines fall within the governance framework set out in the CRD. Furthermore, in view of evolving market practices, sustainability‑related risks and supervisory findings on greenwashing, updating specific elements of the POG Guidelines is both warranted and necessary.. 69. The EBA also clarifies that the amendments did not entail the introduction of new procedural obligations or additional layers of governance beyond those already established under the existing Guidelines or horizontal legislations which refer to greenwashing such as EmpCo Directive. The EBA reiterates that the purpose of the revision of the EBA POG Guidelines is, via targeted approach, to make explicit ESG and greenwashing considerations where retail products include ESG features and enhance the capacity of financial institutions to identify, monitor and mitigate conduct related and sustainability related risks throughout the product lifecycle. Also, to preserve coherence across legislative instruments the application date of the amended Guidelines will be aligned with the application date of the separate Guidelines on the MESGR 70. Third, regarding the BSG’s response asking for clearer definitions and terminology on terms such as ‘ESG characteristics’, the EBA clarifies that the Guidelines do not use the term ‘ESG characteristics’ but refer to ‘products with ESG features’ instead. The POG Guidelines are not intended to define or harmonise sustainability concepts governed elsewhere in Union law. The EBA also reiterates that expressions such as ‘fair, clear and not misleading’ reflect long‑standing consumer‑protection terminology used consistently across EU legislation and supervisory guidance The EBA therefore concluded that further definitions or examples are unnecessary and that they rely on established common high‑level understanding of greenwashing shared across the European Supervisory Authorities. In addition, the EBA clarified that the EBA Guidelines on the MESGR contain only a single reference to greenwashing risk (paragraph 76). As a result, there is no need to supplement the general references to greenwashing risk in the proposed amendments under points 2.1(a), 8.3(c) or 12.1(a) with an explicit paragraph reference, as this does not give rise to any risk of confusion. 71. Finally, EBA acknowledges the divergent views among BSG members on the amendments to the third‑party arrangement chapter. EBA agrees that amendments proposed could bring further complexity. Keeping in mind that the current chapter on outsourcing in the POG Guidelines is outdate, with the aim to address the concerns regarding the scope of application and the proportionality, the EBA amended the POG Guidelines by deleting chapter 6. The EBA is of the view that a cross-reference to the EBA GLs on SMTPR is necessary in paragraph 9 related to the scope of application of the POG Guidelines. This amendment states that the POG Guidelines should be read in conjunction with the EBA Guidelines on the sound management of third-party risk regarding non-ICT services for the financial institutions in the scope of application of the Guidelines. 3.3.3 Summary of responses to the consultation and the EBA’s analysis Amendment to the Nr. Comments Summary of responses received EBA analysis proposals

text: Feedback on responses to Question 1: Do you have any comments on the targeted amendments and consequential changes made to Chapter 2 of the POG Guidelines on ‘subject matter, scope and definitions’?

text: 1 General Several respondents supported the revision of the Guidelines, The EBA acknowledges that many respondents supported the EBA None emphasising that robust POG arrangements for products with ESG approach articulated in the consultation paper. features are essential to address greenwashing and align the framework with CRD VI/CRR III developments and the growing use of sustainability-marketed retail products. They also welcomed the EBA’s practice of regularly updating its guidelines and the assurance that the amendments would not introduce new obligations for credit institutions.

text: 2 Simplification Several respondents were against the proposed approach, Regarding the legal basis, the EBA reaffirms that it has developed the POG None and legal explaining that, in their view, the introduction of further Guidelines in accordance with Article 16 of Regulation (EU) No basis amendments to the POG guidelines would create unnecessary 1093/2010, which empowers the EBA to issue guidelines to ensure the regulatory complexity. Other respondents were of the view that the effective and consistent application of European Union law. The legal POG GLs requirements should be shortened to reduce bureaucracy basis of the Guidelines was subsequently confirmed in ruling

text: of (e.g. auditing and documentation obligations) continued by saying the Court of Justice of the EU as laying down principles intended to that retail banking products are largely risk-free for consumers (e.g. ensure effective processes to identify, manage and monitor risks as well payment accounts) and/or already heavily regulated by as adequate internal control mechanisms within the meaning of Article other legislative provisions 74(1) of CRD). As such, the Guidelines may be updated as necessary to ensure that they remain aligned with the evolving Level 1 requirements In addition, several respondents stressed that the EBA was not on which the Guidelines are based, such as the introduction of Article explicitly mandated by the European Commission or EU co- 87a(5) of the CRD. legislators to issue or revise guidelines on POG for retail products but instead uses the legal basis from Article 74 of the CRD and The EBA also assessed the concerns raised by some respondents that the retains a certain discretion in updating the guidelines. In a entire existing POG Guidelines should be shortened to reduce complexity

text: simplification context - and to support the competitiveness of and that, again, according to them, most retail banking products are risks European banks by avoiding the burden of frequent legislative free. The EBA disagrees with this statement reminding the respondents changes – this respondent was of the view that the EBA should that the POG Guidelines set out high‑level, principles‑based expectations, promote legal stability by keeping revisions to what is strictly providing a framework for effective product oversight and governance necessary and focus on ensuring alignment across different without prescribing detailed operational requirements. The EBA also legislations. reminds respondents that supervisory work on greenwashing identified shortcomings in product-governance processes as a possible channel for Finally, one respondent questioned whether a revision of the misrepresentation. The EBA reiterates that the evolution of market Guidelines is compatible with the European Commission’s recent practices, the emergence of new sustainability-related risks and simplification agenda, to which the EBA, too, committed itself. expectations as also identified in the EBA’s Report on greenwashing monitoring and supervision published in 2025 pointed to the need to strengthen certain aspects of the POG process to safeguard consumer protection and market integrity. The EBA clarifies that the amendments did not entail the introduction of new procedural obligations or additional layers of governance beyond those already established under the existing Guidelines or horizontal legislations which refer to greenwashing such as EmpCo Directive. The EBA reiterates that the purpose of the revision of the EBA POG Guidelines is, via targeted approach, to make explicit ESG and greenwashing considerations where retail products include ESG features and enhance the capacity of financial institutions to identify, monitor and mitigate conduct-related and sustainability-related risks throughout the product lifecycle. The EBA is therefore of the view that the adjustments introduced were in line with the simplification principles, were proportionate and justified.

text: 3 Knowledge and One respondent supported the emphasis on the importance of The EBA takes note of the respondent’s support for strengthening the None skills of staff strengthening the knowledge and skills of the staff involved. It is knowledge of staff involved in the design, monitoring and distribution of essential to ensure that staff understand the characteristics and products with ESG features. risks of ESG products.

text: 4 Greenwashing Several respondents were of the view that inconsistencies exist Regarding the concern raised by some respondents concerning None and ESG across the Markets in Financial Instruments Directive (MiFID), inconsistencies and lack of definition of certain terminologies, the EBA characteristics Corporate Sustainability Reporting Directive (CSRD), and the EU clarifies that the EBA is not in a position to amend or extend definitions Taxonomy, which could lead to regulatory confusion. They called for that are set out in Level 1 texts and the wording ‘ESG characteristics’ the further clarity regarding the definition of ‘greenwashing’, ‘ESG respondents were referring to, was not mentioned anywhere in the draft characteristics’ or ‘greenwashing risks’ to ensure consistency across Guidelines, which instead refer to ‘products with ESG features’. the legislative and regulatory framework. The EBA also clarifies that formulations such as ‘fair, clear, and not In addition, several respondents called for clearer and more precise misleading’ mirror terminology already used in multiple EU legislative wording of terms such as ‘fair, clear, and not misleading,’ acts governing consumer protection and the ESAs common high-level ‘understandable manner,’ and ‘up to date’ to avoid interpretative understanding of greenwashing, as set out in the EBA’s report on ambiguity. Another respondent indicated that to ensure further greenwashing monitoring and supervision and the EBA Guidelines on clarity on the definition of greenwashing the ‘common high-level MESGR . The EBA explains further that the wording proposed by the EBA 27 28 understanding of greenwashing’ should be reflected directly in the in its CP is also aligned with the EIOPA and ESMA guidance which use guidelines. A few respondents considered that regarding ESG similar language and approach. See also most recent ESMA thematic note characteristics, clearer examples should be included within the on clear, fair and not misleading sustainability -related claims published guidelines, especially for products where such features are not self- on 14 January 2026 . evident. The EBA finally clarifies further that should respondents needs further A respondent was of the view that the EBA GLs on MESGR are examples of product with ESG features, the EBA 2021 Report on ESG risks tailored to large CRR institutions with access to detailed taxonomy management and supervision includes in Annex a non-exhaustive list of and emissions data, which are often unavailable or too costly for ESG factors that can help institutions to identify ESG features. micro and small enterprises (MSEs). It therefore suggested including As a result, the EBA concludes that additional changes to clarify the a materiality threshold to narrow monitoring to actual consumer definitions, or to add examples are unnecessary. claims and the acceptance of recognised third-party sustainability labels as sufficient initial evidence. Regarding the concerns that might impact MSEs, the EBA disagrees with the view that EBA Guidelines on MESGR have been designed for large CRR institutions, stressing that they apply to all CRR institutions, with proportionate expectations towards non-large institutions. The EBA also

text: stresses that the principle of proportionality is also embedded in the POG Guidelines. The EBA also considers it inappropriate to introduce explicit materiality thresholds or recognised labels, as this could conflict with other EU initiatives, noting in addition that currently there is no wellestablished EU‑wide ESG labelling framework for retail banking products. The EBA concludes that no amendment is necessary.

text: 5 Product with A respondent argued that in its view, in the absence of definitions The EBA stresses that the objective of the POG Guidelines is not to define None ESG features for ‘green mortgage’ or ‘green consumer credit,’ it is difficult to individual product categories (such as green mortgages or green identify their ESG features. It therefore suggested further consumer credit), nor create a standalone taxonomy for retail credit clarification, including examples, of the ESG features associated products. Rather, the Guidelines aim to ensure that, where ESG features with the relevant product categories. form part of the design, marketing or distribution of a product, those features are subject to appropriate governance, substantiation and oversight arrangements proportionate to the nature of the product and the claims made. The EBA explains however that the EBA report on greenwashing includes several product examples or the EBA 2021 Report on ESG risks management and supervision which includes in Annex a non-exhaustive list of ESG factors that can help institutions to identify ESG features. The EBA is therefore of the view that no change is needed, and the absence of definition or examples of product‑specific EU definitions does not prevent financial institutions from identifying and validating ESG features consistently with the POG Guidelines.

text: 6 EBA Guidelines Several respondents were of the view that referencing the EBA EBA clarifies that the EBA Guidelines on MESGR expressly address See changes to on ESG risks Guidelines on MESGR within the POG GLs was inappropriate, reputational, litigation and conduct‑related risks arising from misleading Guidelines 2.1.a), 8.3.c), management considering that those Guidelines are prudential in nature and only sustainability‑related claims and therefore apply to both prudential and 12.1.a): partially, if at all, focused on consumer-protection objectives. One consumer‑protection outcomes (e.g. misrepresentation of ESG‑related respondent therefore proposed removing the requirement that the product features may give rise to risks which are directly relevant for […] as also set out in management of greenwashing risk or sustainability-related ensuring fair treatment of consumers). The EBA clarifies that the consistent with the communications be ‘consistent with the requirements in the EBA intention of the reference to the EBA Guidelines on MESGR is not to existing Guidelines on MESGR,’ arguing that such a reference would extend include prudential scenario‑analysis requirements into the POG greenwashing-risk the scope of those Guidelines beyond their original intent. Other Guidelines, but rather to ensure consistency regarding the terminology related respondents were of the view that any reference to the EBA used across the EBA legal instruments where misleading sustainability requirements in the Guidelines on MESGR should be supplemented with citations to the claims could produce both prudential effects (via reputational damage or EBA Guidelines on specific provisions relevant to greenwashing. litigation risk) and consumer‑protection harm. the management of The EBA is therefore of the view that the reference to the EBA Guidelines ESG risks on the MESGR should be kept. The EBA however believe that the revision See also paragraph 9 that was proposed in the CP can be further refined to clarify that the reference to the EBA GLs on MESGR is limited only to greenwashing-risk has been amended accordingly: related requirements where products with ESG features are offered or marketed and the EBA GLs on MESGR should be read in conjunction with ‘9. These Guidelines EBA GLs on MESGR for the FIs in their respective scope of application. The supplement other EBA Final Guidelines have therefore been refined as outlined on the right. guidelines that may be relevant to product In addition, the EBA clarified that the EBA Guidelines on the MESGR oversight and contain only a single reference to greenwashing risk (paragraph 76). As a governance, in result, there is no need to supplement the general references to particular, the EBA's greenwashing risk in the proposed amendments under points 2.1(a), Guidelines on Internal 8.3(c) or 12.1(a) with an explicit paragraph reference, as this does not Governance under give rise to any risk of confusion.

text: Article 74 of the CRD

text: (GL 44). These

text: Guidelines should also be read in conjunction with the EBA

text: Guidelines on the sound management of third-party risk regarding non-ICT services and the EBA

text: Guidelines on management of ESG risks for the financial

text: institutions in their respective scope of

text: application.

text: 7 Proportionality Several respondents were of the view that the POG Guidelines The EBA clarifies that the principle of proportionality is already None and ‘time should differentiate between SNCI and other non-large institutions embedded within the existing POG Guidelines. The POG Guidelines set horizons’ in terms of the intensity and scope of application (like the EBA GLs out high‑level, principles‑based expectations, providing a framework for on MESGR), to uphold the principle of proportionality. effective product oversight and governance without prescribing detailed operational requirements, thereby ensuring that institutions retain the Another respondent was of the view that referencing the EBA GL on flexibility to implement proportionate arrangements aligned with their MESGR could create inconsistencies between Significant and Less nature, scale and complexity. The POG Guidelines therefore allow Significant Institutions regarding the application of time horizons. institutions to calibrate their product‑governance arrangements in line According to this respondent, removing references to the EBA GLs with their organisational structure, product range, and risk profile (see in on MESGR would ensure proportionality and improve clarity as particular Guidelines 1.5, 2.3). currently there is inconsistencies between the EBA GLs on MESGR which define time horizons only at a high level, and the proposal in The EBA considers that maintaining this flexible, principles‑based the consultation on EBA Guidelines on ESG scenario analysis, which approach is preferable to introducing prescriptive size‑based thresholds provides more detailed guidance. or formal supervisory segmentation within the Guidelines themselves. Such thresholds could reduce flexibility, create divergence across Member States, or unintentionally strict distinctions that may not be appropriate in all national markets. The EBA therefore arrives at the view that the draft Guidelines do not need to be amended. Finally, the EBA fails to understand the comment provided by one of the respondents regarding the time horizons articulated in the EBA

text: Guidelines. The EBA however clarifies that the time horizons in the EBA GLs om MESGR and ESG scenario analysis Guidelines are fully aligned and in accordance with the CRD requirements applying to all FIs. The EBA therefore arrives at the view that the draft Guidelines do not need to be amended.

text: 8 Greenwashing One respondent shared the view that the risks of greenwashing and The EBA is of the view that recent regulatory and supervisory None risks already the prevention of unfair practices have already been developments, including the adoption of EmpCo, amendments to the addressed in comprehensively addressed in the directive on empowering CRD/CRR concerning ESG risks, and the findings of the EBA’s own work current EU consumers for the green transition (

text: Directive (EU) 2024/825

text: , on greenwashing, justify updating the POG Guidelines to provide greater legislations and EmpCo) and the requirements of the current POG Guidelines clarity and supervisory convergence in the specific context of retail FIs practices already refer to all consumer related risks including ESG risks. It banking products with ESG features. Unlike EmpCo, which establishes continued by saying that a revision of the POG GLs would, according general consumer protection rules, the POG Guidelines govern retail to its views,not bring any added benefit because FIs are already banking product specific processes. The EBA is of the view that ensuring paying particular attention to greenwashing risks when developing that sustainability related features are properly integrated into these and offering sustainable products and communicating sustainable processes is therefore necessary to address the product governance goals. dimension of greenwashing risk. Finally, one respondent explained that adding such amendment The EBA acknowledges the respondent’s statement that many FIs have would create the misleading impression that the consideration of already implemented internal processes but does not share the view that ESG risks for products with ESG features should be given higher revising the Guidelines would create the impression that ESG risks should importance than the consideration of all other risks from the be given disproportionate weight relative to other consumer protection consumer's perspective. risks. The EBA reiterates that a revision of the POG Guidelines is warranted to turn explicit what some FIs are already applying in practice and most importantly to bring clarity to FIs on the application of the Guidelines. The EBA therefore arrives at the view that the draft Guidelines do not need to be amended.

text: 9 Implementation A respondent acknowledged the need to address ESG features and The EBA disagrees with the position of the respondent that diversity in Amendment to the of the POG GLs greenwashing risks. At the same time, it was of the view that the retail banking products would be an obstacle to the application of the date of application as diversity of retail banking products makes uniform ESG rules difficult requirements regarding products with ESG features. The EBA reiterates follows:

text: to apply and argued that, unlike investment products already that the amendments proposed in the CP are proportionate and primarily These guidelines apply covered by ESMA guidance, retail banking requires more time and of a clarifying nature allowing sufficient flexibility to FIs to apply the from 01 December infrastructure to adapt to the new requirements. requirements according to products’ complexity and the size of the 2026 11 January 2027. institutions. Several respondents were of the view that the application of the amending POG GLs should be delayed until EU ESG frameworks are The EBA does not agree with respondents’ views that the application of finalised, considering that early implementation could cause the POG Guidelines should be postponed until the EU ESG framework is misalignment and disproportionate burdens, particularly for smaller fully finalised. It considers that ongoing EU legislative developments do institutions. Additionally, several respondents were of the view that not prevent the EBA from clarifying existing requirements in the POG the application date of the POG GLs should be aligned with the EBA Guidelines and, in the absence of such clarification for retail banking, the Guidelines on MESGR to avoid inconsistencies and legal uncertainty, risk of inconsistent practices and greenwashing could increase. as the EBA GLs on MESGR are applicable to SNCI only from January The EBA however agrees that aligning the application date of the 2027. amending POG Guidelines with the application date set in the EBA GLs on MESGR would avoid inconsistencies and bring more certainty for SNCI. The application date of the amending Guidelines has consequently been amended to refer to 11 January 2027.

text: 10 Scope of A respondent argued that revisions to the Guidelines should focus The EBA clarifies that the references to EBA Guidelines on MESGR does The following sentence application of solely on strengthening consumer protection, which should be not aim to include prudential scenario‑analysis requirements into the has been added to the POG GLs uniform and independent of an institution’s size or classification. POG Guidelines, but rather to ensure coherence of terminology and paragraph 6: Other respondents stressed that POG consumer-protection expectations where misleading sustainability claims could produce both ‘Directive as transposed standards should align at least with MiFID requirements and should prudential effects and consumer‑protection harm (via reputational in the respective not vary or be diluted through links to ESG risk-management or damage, conduct and litigation risk). The amendments proposed in the Member States’. greenwashing frameworks. Those respondents recommended CP also reflect EBA’s findings that deficiencies in product‑governance removing references to the EBA MESGR and greenwashing processes are a key channel through which greenwashing can lead to Paragraph 7 has been requirements, being of the view that it would preserve the original consumer detriment. The EBA therefore arrives at the view that the amended as follows: consumer-protection objective of the POG Guidelines and avoid reference to EBA GLs on MESGR should be kept. However, to ensure ‘Competent authorities mixing regulatory aims. further clarity the Guidelines have been refined, to specify that the EBA may wish to consider POG GLs should be read in conjunction with EBA GLs on MESGR for the The majority of respondents supported applying the POG GLs to applying these FIs in their respective scope of application. non-bank creditors under the CCD. In their view it would ensure a Guidelines to other level playing field among all providers of retail products, The EBA has assessed the feedback received and is of the view that the products or other prevent over indebtedness and bad lending practices as well as revised CCD gives a significant number of options to Member States entities in their

text: fostering greater consumer trust in the market. However, one during the transposition of the Directive into national law, including on jurisdictions that do not

text: respondent was of the view that the EBA should conduct a the precise entity and product scope of the transposed law. The resultant fall within the scope of

text: segmented cost–benefit analysis to assess the impact on small divergences between the national laws do not allow for a uniform the legislative acts

text: community lenders as, according to this respondent the impact inclusion of the Directive into the Guidelines that would capture all referred to above but

text: might be material. Other respondents indicated that credit possible variations of the product and entity scopes that will be set out in for which the

text: intermediaries falling under the scope of the MCD should continue the national transpositions of the CCD. The EBA is therefore of the view competent authorities

text: to be covered by these Guidelines, given the similarities in activities that these divergences between transpositions need to be recognised have supervisory

text: and risk profiles with credit institutions. explicitly in the Guidelines, by adding ‘Directive as transposed in the responsibilities. In

text: respective Member States’ in the scope of the Guidelines. particular, competent

text: authorities may wish to

text: Consequently, paragraph 6 of the POG Guidelines related to the ‘scope of

text: consider applying these

text: application’ is amended, adding ‘as these have been transposed in the

text: Guidelines to

text: relevant Member States'. In addition, in response to the comment

text: intermediaries other

text: received from one respondent calling for a cost-benefit analysis of the

text: than credit

text: implications for micro, small and medium enterprises, the EBA has

text: intermediaries under

text: amended its impact assessment, which now explains that the impact

text: the MCD, such as

text: might vary depending on the choices that Member States have made

text: consumer credit

text: during the transposition of the Directive. The EBA also specified that intermediaries. these cost-benefit implications are not covered by EBA’s impact

text: assessment. Paragraph 9 has been

text: amended accordingly: Finally, the inclusion of the CCD in para 6 of the Guidelines necessitates

text: two consequential and non-substantive changes elsewhere, which is for ‘9. These Guidelines

text: ‘other products’ to be added to paragraph 7, to reflect the existing supplement other EBA

text: supervisory power of NCAs to apply the Guidelines to entities and guidelines that may be

text: products that are not in the scope of the EBA Guidelines but are in the relevant to product

text: NCA’s remit , and for letter ‘h’ related to ‘product’ to be removed from oversight and

text: paragraph 13, as the explicit reference to CCD no longer requires such as governance, in

text: reference. particular, the EBA's

text: Guidelines on Internal In the EBA’s view, this approach preserves a harmonised baseline of Governance under the consumer protection while allowing for a national implementation of the

text: Article 74 of the CRD

text: (GL 44). These

text: Guidelines by NCAs that is reflective of the legislative choices made by Guidelines should also

text: Member States during transposition of the Directive. be read in conjunction

text: with the EBA

text: The EBA also clarifies that credit intermediaries falling under the scope of

text: Guidelines on the

text: the MCD continue to be covered by the POG Guidelines as set in

text: sound management of

text: paragraph 6 of the POG Guidelines on the scope of application. Indeed,

text: third-party risk

text: this paragraph states that the POG Guidelines apply to manufacturers

text: regarding non-ICT

text: and distributors of products offered and sold to consumers including services and the EBA entities falling in the scope of Article 7(1) of the MCD which establishes Guidelines on conduct‑of‑business obligations for credit intermediaries and appointed management of ESG representatives. The EBA is therefore of the view that no amendment is risks for the financial required and the deletion should be maintained under paragraph 7 of the

text: institutions in their

text: Guidelines

text: respective scope of application.

text: Paragraph 13 has been

text: amended under

text: ‘Product’ section:

text: h) other forms of credit for consumers, in addition to that included in (a), provided by the manufacturers listed above, in line with

text: Article 1(5)

text: (e) of the EBA Regulation.

text: 11 Subject matter According to one respondent, the amendment to the ‘subject The EBA explains that the proposed amendment to ‘subject matter’ None

text: matter’ does not seem entirely appropriate if the EBA’s intention is serves a clarifying purpose to explain that the POG Guidelines include ESG

text: to include ESG products within the scope of product governance and greenwashing considerations and should apply to products with ESG

text: because such products are already subject to such review process

text: under other POG Guidelines (see paragraph 14 modifying guideline features. The EBA is therefore of the view that the amendment to the

text: 3.2). ‘subject matter’ should remain as it is

text: Feedback on responses to the Question 2. Do you have any comments on the targeted amendments made to Guidelines 2, 3, 7, 8 and 12?

text: 12 Guidelines 2: Several respondents were of the view that the EBA Guidelines on Regarding the concern that EBA Guidelines on MESGR follow a purely

text: Manufacturers’ MESGR adopt a purely prudential perspective and that the prudential perspective, the EBA is of the view that the EBA GLs on MESGR Amendment to

text: internal control proposed references to the EBA Guidelines on MESGR in Guideline expressly address reputational, litigation and conduct‑related risks Guideline 2.1.a as

text: functions 2.1.a) of the POG GLs are therefore inappropriate and should be arising from misleading sustainability‑related claims and therefore apply follows:

text: removed. They continued further by saying that the EBA GLs on to both prudential and consumer‑protection outcomes. The EBA is ‘2.1 a The MESGR are extensive and only marginally address greenwashing therefore of the view that the reference to EBA Guidelines on the MESGR manufacturer’s under paragraph 76 of Section 5.6.4 on operational and should be kept in the POG GLs. The EBA however believe that the revision management body reputational risks. that was proposed in the CP can be further refined to clarify that the should put in place reference to the EBA GLs on MESGR is limited only to greenwashing-risk Among the respondents, some were of the opinion that the wording sound processes to related requirements where products with ESG features are offered or in Guideline 2.1a was unclear and could be misinterpreted as identify, monitor, and marketed. In addition, the EBA amended paragraph 9 related to the addressing greenwashing after it occurs (e.g. resulting risks) rather prevent and manage scope of application to specify that the POG Guidelines should be read in than preventing it (e.g. identifying, preventing and managing greenwashing conjunction with the EBA Guidelines on the MESGR for the FIs in their greenwashing practices). Other respondents expressed the view practices and to scope of application, with the aim to bring further legal certainty. The that the terminology ‘perceived greenwashing’ was unclear. manage and monitor Final Guidelines have therefore been refined as outlined on the right. risks resulting from In addition, several respondents were of the view that the Regarding the concerns raised about the wording used: greenwashing or introduction of separate obligations for greenwashing risk for the perceived greenmanagement board is unnecessary, considering that these - On the term ‘perceived greenwashing’, the EBA clarifies that it is washing practices, responsibilities are already covered under existing EBA guidelines also used in the EBA Guidelines on MESGR and refers to actual

text: consistent with the as

text: on operational and reputational risks. One respondent was also of and potential alleged greenwashing occurrences where

text: also set out in the

text: the opinion that referring to the MESGR Guidelines, before the ITS consumers or stakeholders believe that a financial product or

text: greenwashing-risk

text: are finalised, could undermine internal control and governance institution may be engaging in greenwashing, even if this cannot related requirements in frameworks and increase compliance costs, notably due to potential be objectively verified until a court ruling confirms it. To this end, the EBA Guidelines on staff training and process changes while requirements remain the EBA is of the view that the wording ‘perceived the management of subject to change. greenwashing’ of Guideline 2.1.a) should remain. ESG risks, where

text: Other respondents were of the view that the internal control - On the lack of reference to the prevention of greenwashing products with ESG

text: functions of the manufacturers should monitor the impact of the practices per se, the EBA acknowledges that the proposal in the

text: changes in the manufacturer’s sustainability profile that CP as currently phrased could be interpreted as concentrating features are offered or

text: might impact the ESG features of the product e.g. changes in the solely on the internal risk implications for institutions, without sold to consumers.’

text: climate transition commitments of an institution would impact the sufficiently reflecting the overarching objective of ensuring that Paragraph 9 has been ESG profile of a green savings account offered by that institution. POG arrangements actively prevent greenwashing practices amended accordingly: Finaly, several respondents held the view that explicit ESG towards consumers. The EBA has consequently adapted

text: competency requirements for staff involved in product design Guideline 2.1.a) to make clear that management bodies must ‘9. These Guidelines

text: would avoid consumers’ misleading information. put in place appropriate arrangements that enable both the supplement other EBA

text: identification and prevention of greenwashing practices (before guidelines that may be In contrast, one respondent highlighted what it considered greenwashing occurs) and the mitigation and monitoring of relevant to product proportionality concerns for MSEs, proposing reliance on sectoral greenwashing risks (after it occurs), including the active oversight and associations or shared services and free multilingual e-learning prevention of misleading ESG related claims or representations governance, in modules provided by EBA to meet competence requirements. throughout product design, approval, monitoring and review. particular, the EBA's

text: Guidelines on Internal The Final Guidelines have therefore been refined as outlined on the right. Governance under

text: In addition, the EBA takes note of the respondent’s support for Article 74 of the CRD

text: strengthening the knowledge of staff involved in the design, monitoring (GL 44). These

text: and distribution of products with ESG features, and is of the view that it Guidelines should also

text: is essential that staff fully understand the features and risks of such be read in conjunction

text: products. with the EBA

text: Guidelines on the

text: Regarding the introduction of separate greenwashing-related obligations

text: sound management of

text: for the management body, the EBA recalls that staff competence is a core

text: third-party risk

text: element of effective POG arrangements, particularly for products with

text: regarding non-ICT

text: ESG features that may entail conduct and greenwashing risks. The services and the EBA proposed amendment therefore serves a clarifying purpose by Guidelines on confirming that the POG Guidelines already cover ESG and greenwashing management of ESG considerations and should be maintained. Consequently, no further risks for the financial amendment is required.

text: institutions in their

text: Regarding the suggestion to refer to changes in a manufacturer’s respective scope of

text: sustainability profile affecting a product’s ESG features, the EBA recalls application.

text: that the ESAs’ common high-level understanding of greenwashing

text: already covers situations where sustainability claims do not reflect the

text: underlying sustainability profile. This is addressed by the expectation that claims be kept up to date and is therefore sufficiently covered by the EBA POG Guidelines. Finally, regarding proportionality concerns for MSEs, the EBA reiterates that the principle of proportionality is already embedded in the POG Guidelines, allowing institutions to implement POG arrangements according to their nature, scale, and complexity, organisational structure, product range, and risk. The EBA therefore considers that maintaining this flexible, principles‑based approach is sufficient and that no amendment is required.

text: 13 Guidelines 3: On one hand, several respondents were of the view that the EBA The EBA clarifies that the EBA is not in a position to amend or extend None Target market amendments are not suitable due to the unclear nature of ‘ESG definitions that are set out in Level 1 texts to clarify ‘ESG features’ criteria features’ criteria or would need to be reviewed to ensure that any or ‘sustainability factors’ as set in the ESMA Guidelines. The EBA clarifies ESG characteristics of the products are taken into account when that the amendments proposed in the CP aim to ensure that defining the target market (i.e. Guidelines 3.2 and 3.3). In addition, manufacturers establish procedures relevant for ensuring the interests, one respondent was of the opinion that to avoid inconsistencies objectives and characteristics of the target market if they are offering with ESMA Guidelines, EBA wording should refer instead to products with ESG features. The EBA therefore decided to keep the ‘products which consider sustainability factors’ and the EBA should wording proposed in the CP as it is. provide clear, harmonized guidance before introducing new The EBA explains however that the EBA report on greenwashing includes obligations to avoid dual requirement for banks, in particular several product examples or the EBA 2021 Report on ESG risks regarding distribution location and client residence rules. management and supervision which includes in Annex a non-exhaustive On the other hand, one respondent welcomed the amendments list of ESG factors that can help institutions to identify ESG features. The provided and emphasised that such requirements would facilitate EBA is therefore of the view that no change is needed, and the absence the provision of advice to consumers interested in products with of definition or examples of product‑specific EU definitions does not ESG features. prevent financial institutions from identifying and validating ESG features consistently with the POG Guidelines.

text: Another respondent raised feasibility concerns for MSEs, being of Regarding the feasibility concerns raised by one respondent regarding

text: the view that a simplified tick-box template with qualitative MSEs and the suggestions made prevent lending on unsustainable

text: questions and narrative justifications could accommodate limited activities. The EBA clarifies that the principle of proportionality is already

text: data capabilities. embedded within the existing POG Guidelines. The POG Guidelines set

text: out high‑level, principles‑based expectations, providing a framework for Finally, some respondents shared the view that savings and current effective product oversight and governance without prescribing detailed accounts are the products that are the most advertised to operational requirements, thereby ensuring that institutions retain the consumers as having ESG characteristics. Those respondents were flexibility to implement proportionate arrangements aligned with their of the opinion that sophisticated tracing and earmarking techniques nature, scale and complexity. The POG Guidelines therefore allow could be used by conventional banks to ensure that deposits in institutions to calibrate their product‑governance arrangements in line sustainable accounts are not contributing to lending to with their organisational structure, product range, and risk profile. The unsustainable activities. In addition, those respondents were of the EBA considers that maintaining this flexible, principles‑based approach is view that consumers should be prevented from being charged more preferable. The EBA therefore arrives at the view that the draft for green loans/mortgages than for a conventional loan/mortgage Guidelines do not need to be amended. and from being financially excluded from accessing products with

text: ESG features in case of lower income. Finally, the EBA notes the risks of financial exclusion or the risk for

text: consumers to be charged more for products with ESG features. The EBA

text: is of the view that explicit requirements for products with ESG features

text: would aim at strengthening consumer protection when products with

text: ESG features are sold or offered to consumers. The EBA therefore

text: concludes that the proposal in the CP do not need to be amended.

text: 14 Guidelines 7: Several respondents were of the view that having staff with the The EBA acknowledges the support from some respondents regarding the None

text: Distribution necessary expertise and competence to ensure that consumers only need for distributors to possess appropriate knowledge and expertise

text: channels purchase the products that meet their needs is of paramount and notes the examples provided as well as the suggestions made for the

text: importance (e.g. staff able to inform consumers about green loans distributors working with MSEs. EBA clarifies that such example or

text: and mortgages and the closest one-stop shop for renovation and suggestions cannot be included in the POG Guidelines, which intend to

text: energy retrofit projects). Another respondent was of the view that be high-level and principles-based Guidelines.

text: a two-year phase-in period for distributors working with MSEs and Regarding the suggestions made by some respondents to add frequency recognition of external ESG certificates (e.g., Eurosif, CFA ESG) period, the EBA clarifies that as part of its targeted approach to amend would be relevant as proof of competence. the POG Guidelines with textual references to ESG and

text: greenwashing-related aspects where relevant, the EBA does not entail to

text: Another respondent was of the opinion that the minimum introduce new procedural obligations or additional layers of governance

text: frequency of distributor controls as well as the essential elements beyond those already established under the existing Guidelines. The EBA

text: of distributor controls should be clarified to ensure consistent therefore does not see any needs to amend the proposals set in the CP

text: supervisory expectations and to facilitate practical implementation. Regarding distributors’ responsibilities the EBA confirms that the Finally, one respondent emphasized that distributors’ targeted amendments aim only at ensuring clarity when products with responsibilities should not be expanded beyond existing ESG features are offered, and do not impose new responsibilities on obligations, particularly regarding ESG claims, and reiterated that distributors beyond those already set out in the current POG Guidelines. manufacturers should remain the primary source of accurate The EBA reiterates however that the POG Guidelines provide a tool to product information. mitigate the risk of greenwashing at all stages from product

text: manufacturing to distribution of retail banking products To that end, the

text: EBA arrives at the view that no amendment is required.

text: 15 Guidelines 8: One respondent expressed its support for the amendments The EBA acknowledges the support expressed for the proposed Amendment to

text: Information to provided, stressing the importance for distributors to be well amendments to Guideline 8 and acknowledges the importance of Guideline 8.3.c as

text: distributor informed about the specific ESG product features and to have ensuring that distributors receive clear, accurate and up-to-date product follows:

text: continuous support from product manufacturers in this matter to information from manufacturers. c) consistent with the sell/offer the product to consumers for whom the product may be The EBA assessed the concern raised about the risk of misinterpretation

text: requirements in the

text: suitable. In addition, others supported the EBA approach being of of the requirement which could result in products with ESG features

text: EBA Guidelines on the

text: the view that it would prevent unsustainable FIs to sell products as being excluded from the required checks, leading to potential

text: management of ESG

text: sustainable and fails to meet consumer expectations which expect greenwashing. The EBA concluded that Guideline 8.3.C) could be refined ,

text: risks where

text: to buy a product to a sustainable FI. to bring further clarity. The Final Guidelines have therefore been

text: applicable, namely for

text: In addition, several respondents supported the amendment amended as stated on the right (including editorial change to clarify that

text: product with ESG

text: proposed in the CP considering that it is in line with existing non- the green washing requirements are also ‘set out in the greenwashingfeatures, to ensure that

text: banking products requirements. Those respondents were however risk related’ in line with the wording introduced under Guideline2.1.a) sustainability related

text: of the view that that the wording ‘where applicable’ should be and 12.1.c)). communication is fair,

text: removed as it could result in products with ESG characteristics being clear, and not Regarding the concerns raised about what respondents considered as excluded from the required checks and leading to potential misleading, and that ambiguous language, the EBA clarifies that formulations such as ‘fair, greenwashing. sustainability claims are clear, and not misleading’ mirror terminology already used in multiple EU

text: However, other respondents were of the opinion that the EBA used legislative acts governing consumer protection as respondents accurate,

text: ambiguous language and the wording such as ‘fair, clear and not themselves acknowledged. The EBA explains further that the wording substantiated, up to

text: misleading’, ‘understandable manner’, and ‘up to date’ could lead date, provide a fair

text: on the management of

text: a fair representation of the institution’ overall profile or the profile of the

text: ESG risks, where

text: product depending on the nature of the claims that are made. The EBA

text: applicable for products

text: recalls that such greenwashing requirements are consistent with the with ESG features. greenwashing-risk related requirements in the EBA Guidelines on MESGR which also specifies that it should be done at both financial institution level (e.g. in relation to sustainability commitments including forwardlooking targets) and the product or activity level (e.g. in relation to products and activities marketed as sustainable), including by monitoring legal developments, market practices, and controversies around alleged greenwashing practices. Regarding the suggestion made by one respondent to reduce MSEs compliance burden, the EBA consider inappropriate to introduce labels,

text: as this could conflict with other EU initiatives, noting in addition that currently there is no well-established EU‑wide ESG labelling framework for retail banking products. The EBA concludes that no amendment is necessary.

text: 16 Guidelines 12: One respondent was of the view that the provision was redundant, The EBA confirms that manufacturers remain the main source of accurate Amendment to Information and as similar obligations already exist under MiFID and ESMA product information, however, the EBA reiterates that the POG Guideline 12.1. a) support for the guidelines and warned against unnecessary granularity. Guidelines provide a tool to mitigate the risk of greenwashing at all stages 12.1a The distributor manufacturer’s from product manufacturing to distribution of retail banking products Other respondents opposed to placing responsibility on distributors should, for products arrangements and confirms the responsibility also lies with the distributors. The EBA is for verifying sustainability claims under Guideline 12.1.a), stating with ESG therefore of the view that no amendment is required to the proposal in that, according to their view, this should remain with manufacturers features offered and the CP. who are supposed to provide all the relevant information for the sold, ensure that distribution channels. Conversely, several respondents were of the The EBA notes that some respondents consider that the obligation under sustainability related view that requiring distributors to ensure that sustainability claims Guideline 12.1.a) is already covered under Guideline 8.3.c) and under communication is fair, provide a fair representation of the institution’s overall profile and MiFID or ESMA Guidelines and should not be included again. The EBA is clear, and not of the product with ESG features, in line with MESGR guidelines, however of the view that such clarification should be included in misleading, and that would maintain consumer confidence. Guideline 12 to avoid giving the wrong impression that distributors do sustainability claims are not have any obligations to comply with greenwashing requirements. To accurate, Finally, several respondents recommended removing references to that end, the EBA is of the view that no further amendment is required, substantiated, up to MESGR Guidelines in Guideline 12.1a to avoid inconsistency and except an editorial change to clarify that greenwashing-risk related date, provide a fair confusion or because they are already included in guideline 8.3 c) requirements are also ‘set out in the greenwashing-risk related’ representation of the (manufacturer obligations). requirements of the ESG risks management Guidelines, in line with the institution’s overall wording introduced under Guideline 2.1.a and 8.3.c). profile or the profile of the product, and are presented in an understandable manner as also set out

text: in the greenwashingrisk related

text: requirements in the EBA Guidelines on

text: the management of

text: ESG risks

text: Feedback on responses to Question 3. Do you have any comments on the consequential changes made to chapter 6 of the POG Guidelines on ‘third-party arrangements’?

text: 17 Chapter 6 on While several respondents expressed support for the EBA The EBA clarifies that outsourcing is a subset of third party-risk Amendment to the

text: third party- amendments to Chapter 6 on outsourcing because they could management which needs to comply with the BCBS principles, DORA and scope of application:

text: arrangements ensure regulatory and supervisory consistency, several respondents the EBA guidelines on SMTPR, for this reason EBA is therefore of the view ‘9. These Guidelines /EBA Guidelines disagreed with the approach. The latter were of the view that the that a reference to the EBA GLs on SMTPR should be kept in the POG GLs. supplement other EBA related to ‘third- proposed amendment could broaden the scope of the ‘third-party’, The EBA agrees with some respondents views that the proposed guidelines that may be party’ lead to more complexity and uncertainty (e.g. expansion to ‘other amendment to Chapter 6 on outsourcing could be interpreted as adding relevant to product arrangements external procurement’ including one-off or occasional purchases of more complexity and uncertainty or being redundant with the EBA oversight and services, which could discourage banks from engaging with new Guidelines on SMTPR. The EBA therefore decided to add a simple cross- governance, in service providers, or from entering into one-off or urgent reference to the EBA Guidelines on SMTPR in the scope of application particular, the EBA's arrangements to avoid the administrative burden, or more instead of updating the chapter 6 on outsourcing to align it with DORA Guidelines on Internal responsibility of the senior management of the entity outsourcing requirements on ICT and EBA Guidelines on SMTPR. Final Guidelines Governance under services, about the risks associated with the outsourcing services). have therefore been amended as outlined on the right. Article 74 of the CRD

text: In this regard, some respondents were of the view that the two (GL 44). These In addition, to address the concern raised by one respondent that the years transition period of the EBA GLs on SMTPR should be added Guidelines should also POG Guidelines should clarify further that only the FIs in scope of the to the POG GLs. Another respondent suggested defining the terms be read in conjunction SMTPR GLs should apply those GLs, EBA clarifies that such clarification ‘third-party service providers’ and ‘third-party arrangement’. with the EBA was already mentioned in the proposal for CP, the EBA agrees however

text: Guidelines on the

text: One respondent was also of the view that the POG Guidelines to specify it again in the scope of application where the EBA GLs on

text: sound management of

text: should clarify, that only the FIs in scope of the SMTPR GLs should SMTPR is referenced. Final Guidelines have therefore been amended as

text: third-party risk

text: apply them. outlined on the right.

text: regarding non-ICT

text: Finally, one respondent, was of the view that the POG Guidelines The EBA also acknowledges the comment received regarding the need to services and the EBA

text: should be amended to lower costs, avoid duplication, and support a have a two-year transition period for the institutions as set in the draft Guidelines on

text: proportionate application of the GLs for MSEs by aligning DORA and Guidelines on the sound management of the third-party risk regarding management of ESG

text: POG requirements, clarifying that occasional use of non-critical non-ICT services. The EBA is of the view that the deletion of Chapter 6 risks for the financial

text: third-party services, should not in its view, meet full governance and the addition of a cross-reference to the EBA Guidelines on SMTPR in institutions in their

text: rules, but instead be subject to proportionate rules through model the scope of application addresses this concern as this amendment respective scope of contract clauses and shared due diligence arrangements.. clarifies that only FIs in scope of those GLs will have to comply with the application. EBA GLs on SMTPR. Finally, the EBA notes the suggestion that the Guidelines should define Amendment to Chapter the terms ‘third-party service provider’ and ‘third-party arrangement’ 6: within Guideline 6. The EBA clarifies that these definitions are already provided in the EBA GLs on SMTPR and, for ICT services, in DORA. The EBA Chapter 6 is deleted is therefore of the view that the amendment proposed above will overcome this concern. The EBA, however, disagrees with two concerns raised: - Regarding the risk of including occasional or one-off procurement, including short-term engagements in the scope of the POG GLs while referring to the EBA GLs on SMTPR and thereby discouraging institutions from contracting new service providers: the EBA recalls that, while entities must map all third-party arrangements in accordance with risk-management obligations, the substantive focus of the EBA GLs on SMTPR remains on critical or important functions. This approach ensures proportionality and prevents undue administrative burden for non-material arrangements. This principle is embedded in the EBA GLs on SMTPR which should be read in conjunction with the POG GLs for FIs in their scope of application. To that end, the EBA is of the view that no amendment is required. - Regarding the risk of uncertainty regarding the responsibility of senior management when institutions outsource services, the EBA clarifies that the final responsibility, when institutions rely on third-party services providers, always lies with institutions and the management body in line with DORA and the EBA Guidelines on sound management of third-party risk regarding

text: non-ICT services. The EBA is of the view that adding a crossreference under Chapter 6 addresses this concern. To that end, no further amendment is needed. - Regarding the risk of disproportionate obligations for MSEs, the EBA reiterates that there is no overlap between the POG Guidelines requirements and DORA as they apply to different domains. The EBA clarifies that those Guidelines remain focused on critical or important functions and therefore already apply proportionately. The EBA also clarifies that the development of model contractual clauses falls outside the scope of the POG Guidelines. Finally, the EBA explains that the reliance on collective due diligence is already foreseen under the EBA GLs on SMTPR. To that end, the EBA is of the view that no further amendment is required.