LEVELS OF ENVIRONMENTAL RISK MANAGEMENT IN UNIVERSAL BANKS
Published: 11 Aug 2016
Abstract: Environmental risk management is becoming more and more important for banks around the world for a number of reasons. On the one hand, the regulatory pressure on companies, banks’ customers, to operate in an environmentally friendly way is an exogenous factor affecting risk management practices in the banks. On the other hand, an internal, endogenous understanding of the importance of the implementation of a holistic approach on risk management, including the environmental risks, has been growing. This understanding has gained momentum especially during the years of the financial crisis when many banks were faced with assets burdened with environmental problems. The aim of the current paper is to outline the levels of environmental risk management in universal banks. Four levels have been identified, and they are presented from a high-level, conceptual perspective.
Keywords: environmental risk, lending, direct environmental impacts, indirect environmental impacts
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