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Sustainable Finance

ABBL’s position on EBA/CP/2025/13: safeguarding consumer protection while ensuring clarity and proportionality

Published on 13 October 2025

In its response to the European Banking Authority’s consultation paper on the draft revised Product Oversight and Governance (POG) Guidelines (EBA/CP/2025/13), the ABBL supports the goal of updating the existing framework to explicitly address ESG features and greenwashing risks. However, it cautions against overextension that could dilute the purpose of POG or create regulatory fragmentation.

Summary

    Maintaining focus on the POG’s core mission

    The EBA’s consultation seeks to integrate ESG and greenwashing safeguards into the current POG framework through targeted, proportionate amendments, rather than a complete overhaul.

    The ABBL stresses that consumer protection must remain paramount. Updates to the guidelines should guarantee equal protection for all clients, regardless of the size or complexity of the institution. Every product offering should be subject to the same fundamental safeguards.

    Addressing inconsistencies around “greenwashing”

    The ABBL warns that the consultation introduces the concept of greenwashing into the POG guidelines (e.g. through proposed Guideline 2.1a) without a harmonised definition across EU legislation. The term is currently defined differently in MiFID, CSRD, and the EU Taxonomy, which risks creating legal uncertainty and diverging supervisory practices.

    To prevent this, the ABBL recommends either removing the term entirely from the guidelines, or establishing a single, consistent definition that applies across all relevant EU frameworks.

    Ensuring proportional implementation of ESG references

    The ABBL does not support the direct incorporation of references to the EBA’s ESG Risk Management Guidelines (EBA/GL/2025/01) into the POG framework at this stage. Many Member States have yet to implement these rules, and less significant institutions (LSIs) may face disproportionate compliance challenges.

    This could result in an uneven playing field between significant and non-significant institutions, particularly in how ESG risks are managed over different time horizons.

    Aligning with MiFID for practical consistency

    For areas such as target markets, distribution, and disclosure (Guidelines 3, 7, 8 and 12), the ABBL calls for closer alignment with ESMA’s MiFID product governance regime. It also urges the EBA to use clearer and more practicable language, to reduce misinterpretations and ease implementation across the industry.

    Key priorities in the ABBL’s response

    The ABBL’s submission to EBA/CP/2025/13 emphasises the need to:

    • Preserve the core mission of POG: consumer protection;
    • Remove or clearly define the term “greenwashing”;
    • Avoid premature linkage with ESG risk management rules; and
    • Ensure consistency, clarity and proportionality across EU frameworks.