ESG Risk Transmission Channel

From Open Risk Manual
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Definition

An ESG Risk Transmission Channel is any causal link that enables adverse realizations of ESG Factors to translate into ESG Risks[1].

Examples

  • Lower Profitability
  • Lower Real Estate Valuations
  • Lower Household Wealth
  • Lower Asset Performance
  • Increased Cost of Compliance
  • Increased Legal Costs

See Also

References

  1. EBA Report: On Management and Supervision of ESG Risks for Credit Instituions and Investment Firms, EBA/REP/2021/18