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More and more ML/TF failures are being revealed around the world, the environment is becoming increasingly fragile and competition is ever increasing, with countries, regulators and organisational leaders finding it difficult to keep up. Compliance departments become busier by the minute facing emerging risks, new regulatory requirements, and organisational leaders as well as clients, viewing them as a ‘snoops’ and as an ever-increasing cost.

The report highlights the main updates made to integrate the climate models in order to reflect the most recent climate data and economic outlook on macroeconomic variables, used as part of the models, and consequently, on both physical and transition risks.

Summarising the NGFS directory for bridging climate related data gaps, overcoming limitations, and proposed policy recommendations to support the needs of the financial sector.

By the end of 2023, the EU Non-Financial Reporting Directive (NFRD) will be in force. The NFRD requires large public interest companies and listed companies to prepare and publish information related to their sustainability performance (society, environment, governance (ESG)) on an annual basis.

Understanding NGFS released data, exploration of scenarios and their impact, and leveraging on globally accepted solutions for the quantification of climate and environmental risks.

On July 8th, 2022, the European Central Bank (ECB) published the results of the Biennial Thematic Stress Test 2022 related to climate change. The exercise focused on climate-related risks, both transitional and physical.

Grant Thornton has constructed a Physical Risk Quantification Framework in its effort to support financial institutions in identifying and measuring their Climate & Environmental Risks. In this publication, we present our methodology, implementation, and key benefits of the framework.

This paper will provide an overview of the current and future uses of Machine Learning in the world of Internal Rating Based (IRB) Models which allow banks to model their own inputs for calculating Risk Weighted Assets.

EBA published, on the 21st of June 2022, draft principles in assessing representativeness of COVID-19-impacted data in re-calibration of IRB models. The Supervisory handbook that will be published later in 2022 will include these principles, aiming at ensuring a harmonised approach. COVID events and especially the use of moratoria and other public measures may have led to changes in default rates.

The EBA Annual Report was published on the 15th of June 2022, highlighting the main achievements made in 2021, providing an overview of the key priorities for the coming year.

The global economic crisis that resulted as a consequence of the pandemic has stressed the relevance of prioritising sustainability pillars within financial services.

The European Central Bank (ECB) has provided guidance to financial institutions in order to disclose and manage climate change-related and environmental risks within an organisation. As of November 2020, ECB published the final guide on climate-related and environmental risk with supervisory expectations relating to risk management and disclosure.

Before the introduction and enforcement of the General Data Protection Regulation (GDPR) back in May 2018, several organizations have been left exposed to risks that emerged from inadequate data protection and cybersecurity controls.

Following the uncertainty arising from the current economic shock, prudential and securities regulators have published guidelines for the application of IFRS 9 in the context of the COVID-19 pandemic.

As per the requirements of the EU Directive 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (4th EU Directive) and article 61A (a) of the Prevention and Suppression of Money Laundering Activities Laws of 2007-2018, each EU member state is required to maintain a central register of beneficial owners of companies and other legal entities. In particular, of each physical person owning or controlling more than 25 % of the entity.

Risk management and governance are essential enablers of growth. Like the brakes of an F1 car, they are the controls that allow you to accelerate safely.