Disclosure to the public on Environmental, Social and Governance (ESG) aspects
Supervisor of Banks Mr. Yair Avidan said, “The amendments to the directives that we published today improve the banking system’s disclosure to the public on Environmental, Social and Governance aspects, in accordance with the best practices implemented by leading banks worldwide, and integrate well with our steps to strengthen the banking system’s contribution to the environment and to society, and to improve the sustainability of the banking system and the economy over the long term. In view of the considerable importance we attribute to the issue, and against the background of the notable developments that have taken place in the world in recent years, we intend to continue acting to improve the management of the environmental and social aspects in the banking system.”
Today, the Banking Supervision Department published amendments to Reporting to the Public Directives, intended to improve the disclosure provided to the public by the banking corporations regarding Environmental, Social and Governance aspects. These amendments are part of the steps being taken by the Banking Supervision Department to strengthen the banking system’s contribution to the environment and to society, thus strengthening the sustainability of the banking system and the economy over the long term, and in view of the experience accrued in Israel’s banking system and at banks worldwide in the disclosure of these issues.
As part of the amendments to the Reporting to the Public Directives:
1. Banking corporations are required to note, in the annual report to the public, the material Environmental, Social and Governance aspects integrated into their targets and to note concisely the main principles established by the banking corporation for promoting these issues.
2. Banking corporations are required to expand their disclosure to the public regarding their exposure to environmental risks, including climate risks.
3. Banking corporations are required to publish a separate Environmental, Social and Governance (ESG) report once a year, instead of the corporate responsibility report, which to date has been required to be published once every two years.
In general, the amendments will apply to the reports to the public by banking corporations that are at the head of a banking group from 2021 and onward.
The amendments published continue years-long activity by the Banking Supervision Department in Israel in establishing optimal reporting and disclosure requirements for banking corporations in this area. The Banking Supervision Department intends to continue following up the developments in leading practices in banks’ disclosure worldwide, and to continue aligning its directives with such practice in the future, as necessary.