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Incorporating ESG in risk management

Updated: Dec 8, 2022

This year we want to see firm progress in how banks incorporate C&E risks [ESG] in their risk management. In doing so, banks should adopt a strategic approach to managing these risks, using the full array of the risk management instruments at their disposal. This includes strategically realigning portfolios, setting clear risk appetites, developing mitigation strategies, adjusting qualitative credit criteria and quantifying and holding capital.

 

Frank Elderson

ECB Supervisory Board Vice-Chairman

February 2022

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