Sustainable Risk Management

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Sustainable Risk Management

AFME’s Sustainable Risk Management focuses on EU and UK industry developments regarding climate-related and environmental risks, including climate risk stress testing and scenario analysis, and ESG risks in the prudential framework.


AFME closely follows recent regulatory developments in climate and environmental risk management practices. Climate and environment risks are considered drivers of existing risk types. We support member firms’ to identify and embed these in their risk management practices as per expectations set by EU and UK supervisors and regulators, and in line with global, regional and national goals to achieve carbon neutrality.
Climate Risk Stress Testing
Through its Climate Risk Stress Testing (CRST) workstream, AFME engages with member firms to help improve their experience of climate risk stress testing both internally and externally. We coordinate and engage with supervisors, regulators and other relevant stakeholders to address the way in which such exercises are undertaken.
Working Group: Climate Risk Stress Testing (CRST) workstream.
A Common Path to Improve European Climate Risk Stress Testing and Scenarios Analysis
AFME’s Lessons learnt report on EU CRST

AFME’s comment on ECB CRST
Bank of England consultation on stress testing the financial stability implications of climate change
ESG Risk in the prudential framework
AFME assists members through the joint efforts of the CRR3 subgroup and the Sustainable Finance Prudential working group to influence and monitor the development of prudential treatment of ESG risks, including sustainability and climate-related risks disclosure and regulatory requirements.
EBA Discussion on prudential disclosures on ESG risks in accordance with Art. 449a CRR
EBA Discussion paper on management and supervision of ESG
risks for credit institutions and investment firms
ECB Guide on Climate and Environmental risks – AFME response
ECB Guide on Climate and Environmental risks – AFME and ISDA joint
AFME response to ESMA Consultation Paper on integrating sustainability risks and factors in MiFID II
AFME feedback on the TEG’s report on Climate-related Disclosures

Working Group: Sustainable Finance Prudential Workstream.


Caroline Liesegang

Managing Director, Head of Prudential Regulation, Sustainable Finance and Research

Constance Usherwood

Managing Director, Prudential