"Caging the Green Swan"—A Global Take on ESG Risk Management
Intensifying demands from regulators, investors, and the public for attention to environmental, social, and governance ("ESG") considerations presents a key challenge for risk managers, particularly those in the financial sector. This White Paper provides an overview of how regulators in the European Union, United States, United Kingdom, and Australia are responding in this area, particularly with respect to climate change. It also discusses approaches for integrating ESG risk factors into the risk management frameworks of financial institutions under the Basel framework.
This publication is the first in a series of White Papers on regulatory developments relevant to ESG. In our forthcoming publications, we will analyze ESG regulation concerning bond issuers, product manufacturers such as investment banks, distributors of financial instruments such as broker dealers and trading platforms, managers of investment funds, and depositaries or custodians, as well as asset purchase programs and other monetary policy aspects.