This committee included the old finance committee members and new ALCO staff but also, most important, added business-line managers responsible for major corporate and retail banking activities.
This calls for a more forward-looking approach from financial institutions and supervisors – with stress tests and scenario-analyses becoming an integral part of the regular toolkit. And this requires financial institutions to take material sustainability risks into account – which means measuring, assessing and controlling these risks as part of their regular risk management processes.