47. Institutions should account for ESG risks when developing and implementing their overall …

Institutions should account for ESG risks when developing and implementing their overall business and risk strategies, which should include at least:

• a) understanding and assessing the business environment in which they operate, and how they are exposed to structural changes in the economy, financial system, and competitive landscape over the short, medium and long term as a result of ESG fac-tors;
• b) understanding and assessing how ESG risks, in particular environmental risk drivers including transition and physical risks, can have an adverse impact on the viability of their business model and sustainability of their business strategy, including profitabil-ity and revenue sources, over the short, medium and long term;
• c) considering how these ESG risks, in particular environmental risk drivers including transition and physical risks, may affect their ability to achieve their strategic objec-tives and remain within their risk appetite;
• d) formulating, implementing and monitoring plans and targets as set out in Section 6.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/