Current state of credit institutions vis-à-vis ESG factors and risk integration – an EBA and ECB view

Both the EBA and ECB sees the need for credit institutions to incorporate ESG factors into their risk framework and beyond, taking into account the assessment of their risk and opportunity over different time horizons. Whilst challenges related to data availability and quantification of ESG risks are acknowledged, credit institutions should identify the gaps they are facing and take remedial actions, taking into account the on-going developments in the field of ESG.
In this alert you will read more about to understand the problems credit institutions are facing and the progress already made in the business strategy, governance and risk management framework, having faith that the ESG factors will be fully integrated in the future.