The Case for Environmental and Social Risk Management in Investment Banking

Olivier Jaeggi (), Nina Kruschwitz () and Raul Manjarin ()
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Olivier Jaeggi: ECOFACT AG
Nina Kruschwitz: MIT Sloan Management Review
Raul Manjarin: ECOFACT AG

A chapter in Responsible Investment Banking, 2015, pp 535-543 from Springer

Abstract: Abstract The debate about sustainable finance focuses mostly on responsible investment. Considerably less attention tends to be paid to the direct relationships between banks and their corporate clients. Some of these clients are associated with controversial business practices, sectors, projects, and/or countries that, in turn, are associated with detrimental environmental and social impacts. In the context of this article, environmental and social (E&S) risks are those risks that occur when investment banks engage with such clients. This article discusses five factors that put pressure on banks to address E&S risks more systematically. It makes the case that E&S issues harbour considerable potential for damage in the here and now and that investment banks take a risk if they underestimate them.

Keywords: Risk Management; Corporate Governance; Credit Risk; Business Practice; Private Equity (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:csrchp:978-3-319-10311-2_36

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DOI: 10.1007/978-3-319-10311-2_36

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