Financial Institutions in Czech Republic Risk Management Under Scrutiny as EU Demands Sustainability
The European Commission, European Banking Authority, and European Central Bank are setting out specific expectations for banks, insurance companies, and pension and investment funds in the Czech Republic to support businesses through external financing. This move is part of Europe’s transition to sustainability.
A Complex Regulatory Landscape Ahead
Financial institutions in the Czech Republic must navigate a complex landscape of regulations, including:
- EU Taxonomy
- Non-Financial Reporting Directive (NFRD)
- Corporate Sustainability Reporting Directive (CSRD)
Failure to comply with these requirements can result in reputational damage, financial penalties, and even license revocation.
A Leading Risk Consulting Firm Offers ESG Services
To help Czech Republic-based financial institutions meet these challenges, a leading risk consulting firm has launched an ESG services platform. The company’s experts will work closely with clients to develop tailored strategies for integrating environmental, social, and governance (ESG) considerations into their business models, product portfolios, and risk management practices.
Services Offered
The firm’s services include:
- Business Model and Strategy Development: A comprehensive review of client approaches to ESG, benchmarked against current and future regulatory requirements, as well as best practices from leading financial institutions.
- Non-Financial Reporting and Regulatory Reporting: A gap analysis to assess clients’ readiness for current and future reporting requirements, including the EU Taxonomy, NFRD, CSRD, EBA Pillar 3, TCFD/SASB/ISSB. The firm will review current reporting processes, recommend suitable methods, and help implement non-financial reporting.
- Risk Management: A gap analysis to assess clients’ readiness for future requirements related to risk management, including credit, market, operational risks. Clients will receive recommendations for setting up their entire risk management system, establishing a suitable risk appetite, limits, and KRIs.
Expertise in ESG Strategies
The firm’s experts have extensive experience in working with financial institutions to develop ESG strategies that meet regulatory demands while also generating business opportunities. For example:
- Developing green bonds, sustainable or sustainability-linked loans, investments, and deposit products
- Identifying subsidy programs and submitting applications
- Reviewing data pools against current and future requirements
- Measuring carbon footprint
- Establishing effective governance and control mechanisms
The Future of ESG Risk Management in the Czech Republic
As the Czech Republic’s financial institutions navigate this complex regulatory landscape, it is clear that ESG risk management will play a critical role in determining their success. With the help of leading experts, these entities can develop sustainable strategies that drive growth, improve reputation, and support Europe’s transition to a low-carbon economy.