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Preparing for EBA Pillar3 disclosure of ESG risks

1 MINS READ

Sudalaimuthu Gurusamy

Domain Consultant, Risk Management Practice, BFSI, TCS

ESG risks and their impact on financial institutions

Banks are under increasing regulatory pressure to protect themselves from the impact of climate change and to align with the global sustainability agenda.

Institutions that are innovative and think strategically will be able to adapt to climate change and would be able to support counterparties in net-zero transition.  

Integrating environmental, social, and governance (ESG) risks as part of pillar3 disclosures will enable banks and financial institutions to quickly compare among peer institutions and make strategic ESG management decisions. Inclusion of ESG risks into existing capital regulatory regimes will have a multidimensional impact across business processes, and it requires banks to focus on below capability interventions.

  1. Risk data acquisition

  2. Taxonomy alignment of exposure

  3. Climate risk data transformation and aggregation

  4. Climate risk measurement methodology

  5. Risk disclosures and review

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Sudalaimuthu Gurusamy
Sudalaimuthu Gurusamy is a domain consultant with the risk management practice of the BFSI unit at TCS.
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