The European Central Bank (ECB) Banking Supervision published its final guide on climate-related and environmental risks. The guide, which applies immediately, explains the ECB’s expectations of how banks should manage and disclose such risks under current prudential rules. In early 2021, the ECB will ask banks to conduct a self-assessment with respect to the expectations outlined in the guide and to draw up action plans on that basis. The ECB will then benchmark the banks’ self-assessments and plans and consider them in the supervisory dialogue. In 2022, the ECB will conduct a full supervisory review of banks’ practices and follow-up, as necessary. Given the growing importance of climate change for the economy and for banks, the ECB will conduct its next supervisory stress test in 2022 on climate-related risks. In addition, the ECB published a report on banks’ climate-related and environmental risk disclosures. Despite improvement, banks must still better support their disclosure statements with relevant quantitative and qualitative information. In the second half of 2021, the ECB will identify remaining gaps for discussion with the banks.