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Environmental Risk Management in Financial Sector of G20 Countries

Author

Listed:
  • Olga V. Bogacheva

    (Financial Research Institute, Moscow 127006, Russia; Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow 117997, Russia)

  • Oleg V. Smorodinov

    (Financial Research Institute, Moscow 127006, Russia)

Abstract

The article is focused on determination of key development directions of environmental risk management in G20 countries, based on the analysis of its current state. They are: 1) application of new classification of risk factors in environmental risk management; 2) application of new, more precise and efficient instruments and methods of environmental risks’ identification and analysis; 3) formation of publicly available environmental database; 4) integration of instruments, methods, procedures and results of evaluation of environmental risks into enterprise-wide risk management system of financial organization. It was noted in the article that financial institutions also started applying the newest methods and instruments of risk management (such as scenario analysis, stress testing, probability modeling, systems analysis, etc.). The authors claim that one of the keys to financial institutions’ success is an ability to integrate procedures, methods and instruments of environmental risk identification and evaluation results into enterprise-wide risk management system (ERM). The article also conducts a case study of application of the newest methods and instruments of environmental risk management by financial institutions in various G20 countries. The authors draw a conclusion that G20 countries, which are planning a transition to sustainable development, need to increase their efforts in order to put in place environmental risk management systems.

Suggested Citation

  • Olga V. Bogacheva & Oleg V. Smorodinov, 2018. "Environmental Risk Management in Financial Sector of G20 Countries," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 2, pages 59-72, April.
    • Handle: RePEc:fru:finjrn:180205:p:59-72
    DOI: 10.31107/2075-1990-2018-2-59-72
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    References listed on IDEAS

    as
    1. Hennie Van Greuning & Sonja Brajovic Bratanovic, . "Analyzing Banking Risk : A Framework for Assessing Corporate Governance and Risk Management, Third Edition," World Bank Publications, The World Bank, number 2618, September.
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    More about this item

    Keywords

    analysis and evaluation of environmental risks; enterprise risk management of financial organization; publicly available environmental database; G20 Green Finance Study Group; transitory risks;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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