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 Horvath is a partner at PwC with extensive expertise in sustainable finance and the asset management industry, including both financial and real assets. Since joining PwC Switzerland in 2011 and PwC Luxembourg in 2018, he has led significant projects in regulatory audit and advisory, focusing on the asset management sector. Michael has played a key role in implementing the EU regulatory framework for sustainable finance, including SFDR, taxonomy regulation, and CSRD, as well as other regulatory initiatives such as DORA, AML/CFT, CSSF circular 18/698, and MICA. He is a certified public accountant in Switzerland and Liechtenstein and has contributed to designing compliance frameworks and operational implementations driven by regulatory changes. His notable client projects include defining target operating models for Luxembourg AIFMs, digital operational resilience planning, AML/CFT framework implementation, and ESG/sustainability process design, supported by his involvement in training and regulatory advisory.

Frédéric Vonner is a partner with over 22 years of experience managing projects and advising asset managers and securities service providers in the investment fund industry, primarily in Luxembourg. He specialises in operational excellence and regulatory compliance for UCITS and alternative funds, with a strong focus on sustainability and sustainable finance, covering strategy, compliance, and implementation. Frédéric is also an experienced trainer and course facilitator for both soft skills and technical topics. He actively contributes to ALFI and EFAMA working groups and has led numerous client projects including sustainable finance assessments, UCITS V and AIFMD implementations, depositary and GDPR assessments, fund administration reviews, and service provider rationalisation.

Elena Kazmina is a director in the regulatory compliance advisory team at PwC Luxembourg with over 10 years of professional experience. She specialises in supporting multilateral development banks, Luxembourg-based credit institutions, investment firms, and management companies in strengthening internal governance, risk management, and compliance with regulatory frameworks such as Basel guidelines, EU regulations, EBA guidelines, and Luxembourg-specific laws. Elena holds certifications from ACCA and GARP in Climate Risk. Her expertise includes Basel III/IV, enterprise risk management, risk appetite frameworks, regulatory reporting, and credit rating methodologies. She has led strategic capital optimisation, risk appetite enhancement, financial product assessments, IFRS 9 audits, and M&A due diligence projects.