Prepared for the Future? ESG Competences Are Key

Abstract

Banks are only gradually starting to realise that environmental and social risks have much wider repercussions than simply the potential damage to their reputation. The conventional initiatives taken by banks in the area of corporate social responsibility (CSR) are woefully inadequate for tackling the global environmental challenges they currently face. It is not enough to take environmental and social risks into consideration when financing projects and developing individual ‘green’ investment products. Instead, a paradigm shift is required—in the interest of both the banks and their clients. To be properly prepared for the imminent changes such as disruptions resulting from the growing scarcity of resources or changing regulations and to be able to realistically assess potential risks and opportunities, banks must successfully incorporate environmental and social challenges into the decision processes of their core business activities.