This post was originally published on Finextra (Security)
The expanded scope of risk management in banking
Chief Risk Officers (CROs) must stay vigilant on current threats and risk issues while also keeping an eye on future risk management trends. Bankers face various threats, and for CROs – when it comes to safeguarding their institution from both traditional risks and emerging challenges – “the buck stops here.”
While the CRO’s traditional focus was on financial risks, such as credit, liquidity, and market risk, they must now provide detailed insights into various non-financial risks, including cyber, culture, talent, geopolitical, climate change in large institutions, reputation, digitization, regulation … the list goes on, with an increasing sense of urgency.
Climate risk must be addressed
The effects of climate change are all around us, and now regulators globally are driving companies to move from voluntary to mandatory climate disclosures.
This means that businesses are now required to provide more detailed reports on their operations. For instance, they must disclose their greenhouse gas emissions, how they manage climate-related risks, the financial implications of climate change for their operations, and its effect on their strategy and future plans.
Climate risks are distinct from traditional ones, and bank regulators will expect detailed plans, particularly from institutions situated in areas vulnerable to
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