Difference between revisions of "ESG Factors"
From Open Risk Manual
Wiki admin (talk | contribs) |
Wiki admin (talk | contribs) |
||
| Line 3: | Line 3: | ||
ESG factors can lead to negative financial impacts through a variety of [[Risk Factor | risk drivers]]. The causal chains that explain how these risk drivers impact institutions through their counterparties and invested assets are called [[Risk Transmission Channel | ''transmission channels'']]. | ESG factors can lead to negative financial impacts through a variety of [[Risk Factor | risk drivers]]. The causal chains that explain how these risk drivers impact institutions through their counterparties and invested assets are called [[Risk Transmission Channel | ''transmission channels'']]. | ||
| + | |||
| + | === Environmental Factors === | ||
| + | Environmental considerations may include: | ||
| + | * [[Climate Change]] | ||
| + | * [[Greenhouse Gas Emissions]] | ||
| + | * resource depletion | ||
| + | * waste and pollution | ||
| + | * deforestation | ||
| + | * [[Biodiversity Loss]] | ||
| + | |||
| + | === Social Factors === | ||
| + | Considerations may include issues such as | ||
| + | * [[Inequality]] | ||
| + | * inclusiveness | ||
| + | * labour relations | ||
| + | * investment in human capital and communities | ||
| + | * human rights | ||
| + | * modern slavery | ||
| + | * child labour | ||
| + | * working conditions | ||
| + | * employee relations | ||
| + | |||
| + | === Governance Factors === | ||
| + | Concenrn the governance of public and private institutions, including | ||
| + | * management structures | ||
| + | * employee relations and | ||
| + | * [[Remuneration Framework | executive remuneration]] | ||
| + | * bribery and corruption | ||
| + | * board diversity and structure | ||
| + | * political lobbying and donations | ||
| + | * tax strategy | ||
== See Also == | == See Also == | ||
Revision as of 14:57, 11 August 2021
Contents
Definition
ESG Factors are environmental, social or governance matters that may have a positive or negative impact on the financial performance or solvency of an entity, sovereign or individual.[1]
ESG factors can lead to negative financial impacts through a variety of risk drivers. The causal chains that explain how these risk drivers impact institutions through their counterparties and invested assets are called transmission channels.
Environmental Factors
Environmental considerations may include:
- Climate Change
- Greenhouse Gas Emissions
- resource depletion
- waste and pollution
- deforestation
- Biodiversity Loss
Social Factors
Considerations may include issues such as
- Inequality
- inclusiveness
- labour relations
- investment in human capital and communities
- human rights
- modern slavery
- child labour
- working conditions
- employee relations
Governance Factors
Concenrn the governance of public and private institutions, including
- management structures
- employee relations and
- executive remuneration
- bribery and corruption
- board diversity and structure
- political lobbying and donations
- tax strategy
See Also
References
- ↑ EBA Report: On Management and Supervision of ESG Risks for Credit Instituions and Investment Firms, EBA/REP/2021/18
