France transposes the European Directive on the inclusion of ESG risks in the banking system

France transposed the European Directive on supervisory powers, sanctions, third-country branches and environmental, social and governance (ESG) risks by means of an Order dated 08/04/2026, published in the Journal officiel on 09/04/2026.

This European directive, adopted on 31/05/2024, commonly known as part of the CRD VI package (Capital Requirement Directive), amends a 2013 directive that aimed to harmonise the framework for banking supervision of credit institutions and investment firms in the EU by imposing rules on their governance, capital requirements and the powers of supervisory authorities.

The main changes introduced by the 2024 European directive are:
• New obligations relating to ESG risks;
• control of third-country branches;
• and a strengthening of the powers of the supervisory authorities.

With this new directive, banking institutions must take ESG risks into account in their risk management systems, cover ESG risks through their governance and adopt transition plans including objectives and intermediate milestones. It also introduces a minimum capital requirement of…