October 2021
The COVID-19 pandemic has driven an increased focus on the importance of long-term stability, accelerating the ESG agenda, and triggering improvements in the way ESG risk is governed and managed. There is unprecedented momentum to embed ESG into banking and to ensure that the whole financial sector plays a key role in driving the transition to a sustainable economy.
As climate change and other ESG risks climb the global agenda, many banks are moving fast to thoroughly assess supervisory expectations, to close gaps and to embed ESG into their business models and strategies. Multiple initiatives are underway, but there is much to be done to address ESG-related challenges and seize opportunities. The time to act is now.
This report looks at banks’ response to ESG risks and the key medium to long-term challenges that lie ahead. We focus on the implementation of ECB’s supervisory expectations on climate-related and environmental risks, with reference to the integration of ESG into banks’ strategies and frameworks, and the upcoming 2022 ECB climate risk stress test.
If you wish to discuss any of the findings in our report, do get in touch to see how KPMG ECB Office can support you.
- Author:
- Dr. Henning Dankenbring
- Ana Sofia Melo (Senior Manager, KPMG ECB Office KPMG in Germany)
- Original source
