Across the AFI network, financial regulators acknowledge the need for improved risk management practices among lending institutions that consider financial exposure to both environmental and social risks.

This report identifies common approaches to implementing environmental and social risk management (ESRM) in the banking sector and provides procedural considerations for regulators to issue such guidelines.

AFI’s Inclusive Green Finance workstream is part of the International Climate Initiative (IKI), supported by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), based on a decision by the German Bundestag.