ESG risks in banking

As the global financial system increasingly orients toward sustainable development, environmental, social, and governance (ESG) risks have emerged as critical determinants of the long-term stability and financial performance of financial institutions. The identification and management of ESG risks have therefore become imperative, particularly within the banking sector. Banks are required not only to comply with an expanding regulatory framework but also to respond to growing pressures from stakeholders and the broader public. This study examines the nature and implications of ESG risks in the banking industry and analyzes approaches to ESG risk management aligned with societal expectations and international standards.