30. Institutions’ internal procedures should provide for a combination of risk assessment …

Institutions’ internal procedures should provide for a combination of risk assessment methodologies, including exposure-based, sector-based, portfolio-based, and scenario-based methodologies, as set out in paragraphs 31 to 42. The combination of methodologies should be put together in a way that allows institutions to comprehensively assess ESG risks over all relevant time horizons. In particular, institutions should at least use exposure-based methods to obtain a short-term view of how ESG risks are impacting the risk profile and the profitability of their counterparties, use sector-based, portfolio-based and scenario-based methods to support the medium-term planning process and the definition of risk limits and risk appetite for steering the institution towards its strategic objectives, and assess through scenario-based methods their sensitivities to ESG risks across different time horizons including long-term ones.

• a. Exposure-based methods

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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