1. Competent authorities shall ensure that institutions have, as part of their governance arrangements, including the risk management framework required under Article 74(1), robust strategies, policies, processes and systems for the identification, measurement, management and monitoring of ESG risks over the short, medium and long term.
2. The strategies, policies, processes and systems referred to in paragraph 1 shall be proportionate to the scale, nature and complexity of the ESG risks of the business model and scope of the institution's activities, and consider the short and medium term, and a long-term time horizon of at least 10 years.
3. Competent authorities shall ensure that institutions test their resilience to long-term negative impacts of ESG factors, both under baseline and adverse scenarios within a given timeframe, starting with climate-related factors. For such resilience testing, competent authorities shall ensure that institutions include a number of ESG scenarios refl
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