In this report we are extending our ESG framework to the whole of our European banks coverage. We see ESG more as a risk than an opportunity. As such we see substantial motivation for banks to engage swiftly with this new environment. We have identified three new laggards: Rothschild and Co, Unicaja and Millennium BCP, while we have added one industry leader to our ESG coverage: BAMI. We also monitor the ESG implications of the new EC Banking Package, which are supportive for the renovation market - the largest green opportunity in our view. All European banks coverage now within our ESG framework We have expanded our ESG framework to the whole of our European coverage, adding 15 for a total of 41 banks. As a result, we add BAMI to our industry leaders while we have identified three new laggards: Millennium BCP, Rothschild and Co and Unicaja. We end up with four leaders, BAMI, Lloyds, SHB and CaixaBank and seven laggards, Credit Suisse, UBS, Deutsche Bank and Erste Bank, as well as the aforementioned three new names. ESG becoming prominent in banking regulation In the recently published Banking Package, which drafts the new finalised Basel III rules into EU regulation, ESG is more prominent than it was before. The European Commission empowers the ECB and the EBA to monitor ESG risks, invoke climate stress testing and even opens the door to increase Risk Weightings for brown assets relative to green assets. Renovation market remains the greatest opportunity We continue to believe that the largest opportunity for the sector is the renovation market. Improving energy efficiency of the EU building stock is crucial to getting close to net zero emissions by 2050. The fact that regulation allows banks to take into account energy efficiency improvements as a factor increasing the valuation of an asset should be quite supportive to increasing renovation rates. We think a lot is yet to be done by banks, consumers and governments to create the right...