Sustainable finance: impact on risk management

Nowadays, it's almost impossible to open a newspaper without encountering an article on 'sustainability'. Whether it's in the context of the financial services industry, the broader economy, or society as a whole, sustainability has become a critical issue. In recent years, it has gained significant traction and is now recognised as a necessity rather than just a trend.

Over the past decade, the focus on environmental issues has grown exponentially, resulting in various global commitments and initiatives aimed at transforming current institutional, economic, and financial models.

This training focuses on the implications of sustainable finance, particularly SFDR, on risk management for financial institutions, including banks and Asset Managers (AM). It aims to address how ESG factors, climate change, and broader sustainability considerations reshape the risk landscape, affecting both operational and strategic decision-making processes.

By the end of this course, participants will:

• understand how SFDR affects risk management frameworks for banks and asset managers;
• recognise the importance of integrating ESG and climate risks into traditional risk assessment processes;
• gain insight into regulatory expectations for managing sustainability-related risks;
• develop practical strategies for adjusting risk management practices in light of sustainability objectives.

• SFDR and risk management Overview
  • Overview of SFDR and its regulatory impact on financial institutions.
  • The integration of ESG and climate considerations in risk frameworks.
• Risk management adjustments
  • Banks and Asset Managers: how ESG/climate risks are changing risk assessment and mitigation strategies.
  • Key challenges: identifying climate-related financial risks and their impact on credit, market, and operational risks.
• Case studies and best practices
• Real-world examples showcasing how leading banks and AM firms are adapting their risk management to account for sustainability concerns.

This training is coordinated by Michael Horvath, Partner and Martina Davanzo, Manager at PwC Luxembourg.

Michael has acquired a strong financial and regulatory audit as well as advisory background and significant experience leading projects in the asset management sphere.

In the recent past, Michael has been particularly involved in various regulatory projects related to the implementation of the EU regulatory framework for sustainable finance (i.e. SFDR, taxonomy regulation, CSRD) at entity and product level. Michael is involved in various other regulatory projects for clients, from DORA, AML/CFT regulation over CSSF circular 18/698 to MICA.

Martina is a manager in the Regulatory & Compliance Advisory Services department at PwC Luxembourg. She has worked on several projects related to the SFDR implementation, including drafting of corporate policies as well as designing product-related strategies for banks and investment firms and producing the related disclosures to investors. She is also expert on ESG and regulatory due diligence and CSRD reporting.

Martina is a Certified Expert in Sustainable Finance and holds the CFA ESG Investing Certificate.