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Sound ESG risk management is essential for financial strength
Managing ESG-related risk is key to maintaining our financial strength.
In June 2020, our Risk Committee approved the revision of ESG risk definitions in Nordea’s Risk Taxonomy to consider ESG factors as drivers of existing risk categories such as credit risk, liquidity risk, market risk and operational risk, and to further incorporate them into existing risk management frameworks taking a proportionate and risk-based approach.
Recent efforts have focused on integrating climate-related risks in the Credit Risk Framework while integration with other financial risk frameworks is planned to start in 2021. To support this work, we are participating in external and regulatory initiatives aimed at developing comparable methods for assessing transitional and physical climate impacts and are actively advocating on policy consultations through various industry groups.