Ready to tackle the new challenges
The trend is clear and irreversible:
Ecological and economic necessities are increasingly overlapping, raising new challenges especially for the finance industry.
The EU intends to promote sustainable business practices by steering capital flows in the right direction. That’s what the EU Taxonomy is for, which financial institutions are expected to implement.
In addition to typical credit risk factors, state-of-the-art risk management now also needs to cover non-financial risk.
ESG plays a key role in this context…
…and has already found its way into recent regulation: MaRisk 7.0, NFRD (future CSRD).
When assessing ESG risks, traditional risk management faces new, specific challenges: the complexity of climate risks, longer time horizons than for credit risk, increasing but as yet largely unfinished regulation, numerous service providers using different approaches.
It is therefore crucial for financial institutions to manage these risks comprehensively and efficiently. This is where RSU can help with professional solutions like the ESG Score.
RSU’s ESG Score is a risk score that focuses on financial risk.
The ESG Score is calibrated on a scale from 0 to 100.
The points awarded are converted to a grade from A to E, where A = very low sustainability risks, …, E = high sustainability risks.
The result can be shown at different levels (E-Score, S-Score, G-Score, etc.). The E-Score can additionally be broken down between physical and transitory risks.
The score provides a ranking of the companies in question – both at industry level and across industries.
By relying on a scoring system set up by a central service provider, institutions minimise their development and maintenance costs.
