Sustainability, ESG, and Climate Risk Supervision for Financial Institutions

Introduction

Sustainability and climate-related risks are increasingly recognized as material threats to financial stability. Regulators and supervisors are now expected to assess how Environmental, Social, and Governance (ESG) factors affect the safety, soundness, and resilience of financial institutions while ensuring alignment with national and international sustainability frameworks.

This intensive five-day course is designed to equip financial supervisors, regulators, and policy professionals with the knowledge and tools required to integrate sustainability and ESG considerations into prudential supervision. The program focuses on climate risk, transition risk, governance expectations, disclosure standards, and supervisory approaches adopted by central banks and regulatory authorities worldwide.

By combining regulatory frameworks with applied supervisory practices, the course enables participants to evaluate institutional preparedness, oversee ESG risk management, and support the development of a sustainable and resilient financial system.

Course Objectives

By the end of this course, participants will be able to:

• Understand the relevance of sustainability and ESG risks to financial system stability.
• Identify key climate-related financial risks and their transmission channels.
• Assess governance, risk management, and internal control frameworks related to ESG.
• Apply supervisory tools to evaluate climate and sustainability risks.
• Understand global ESG disclosure standards and regulatory expectations.
• Integrate sustainability considerations into prudential and supervisory frameworks.

Course Outlines

Day One: Sustainability and Financial System Stability

• Introduction to ESG and sustainable finance concepts.
• Climate change as a source of financial risk.
• Role of central banks and supervisors in sustainability oversight.
• International initiatives and regulatory developments.
• Supervisory mandates and policy considerations.

Day Two: Climate-Related Financial Risks

• Physical, transition, and liability risks.
• Transmission of climate risks to credit, market, liquidity, and operational risks.
• Sectoral exposure analysis and portfolio vulnerability assessment.
• Scenario analysis and stress testing concepts.
• Supervisory expectations for climate risk identification.

Day Three: Governance, Risk Management, and Controls

• Board and senior management responsibilities for ESG oversight.
• Integrating ESG risks into enterprise risk management frameworks.
• Policies, procedures, and internal controls for sustainability risks.
• Data challenges and limitations in risk measurement.
• Supervisory assessment of governance effectiveness.

Day Four: Disclosure, Reporting, and Regulatory Standards

• ESG and climate-related disclosure requirements.
• Overview of key international frameworks and regulatory approaches.
• Supervisory review of sustainability disclosures.
• Managing greenwashing and misrepresentation risks.
• Regulatory reporting requirements and supervisory data needs.

Day Five: Supervisory Tools and Implementation Strategies

• Supervisory approaches to ESG and climate risk oversight.
• On-site and off-site supervision techniques.
• Proportionality and phased implementation strategies.
• Capacity building within supervisory authorities.
• Future trends in sustainable finance regulation.

Why Attend This Course: Wins & Losses!

• Strengthen supervisory capacity in managing sustainability and climate risks.
• Gain clarity on global ESG regulatory expectations and best practices.
• Improve assessment of governance and risk management frameworks.
• Enhance early identification of climate-related financial vulnerabilities.
• Support long-term financial system resilience and stability.

Conclusion

The Sustainability, ESG, and Climate Risk Supervision for Financial Institutions course provides regulators and supervisors with a structured and practical approach to overseeing sustainability-related risks within the financial sector. By aligning supervisory expectations with evolving global standards, the program supports effective regulation while promoting a resilient and sustainable financial system.

This course is particularly suitable for central banks, financial regulators, and supervisory authorities seeking to embed sustainability and climate considerations into their prudential and supervisory frameworks.