United Nations Environment Programme Finance Initiative previews forthcoming sustainability risk integration framework for banks

The United Nations Environment Programme Finance Initiative has previewed its forthcoming Approach to Sustainability Risk Integration, a framework intended to give banks a structured method for embedding sustainability risks into prudential risk management. The initiative positions the approach as a response to sustainability risks becoming a mainstream prudential issue for banks as regulators tighten expectations for how those risks are identified, measured and managed. The framework is designed to cover the operational integration of climate shocks, nature loss, pollution and social pressures into risk management, against a backdrop of impacts on markets, asset values and financial stability. UNEP FI said more than 90% of consulted banks believe current practices would benefit from a structured reference framework. The first part of the approach is due to be launched soon.