Addresses the management of environmental, social and governance risks and their link to the sustainability strategy of financial institutions.

Objective and functions

Promote the analysis and management of environmental, social and governance (ESG) risks and climate-related financial risks in the Dominican financial sector, using international standards as a reference.

  1. 01Analyze international standards and frameworks on ESG and climate risks.
  2. 02Follow regulatory initiatives on sustainability and their effect on the financial sector.
  3. 03Drive training on the measurement and management of these risks.
  4. 04Hold discussions with figures from the public and private sectors.

What ESG risks are

Environmental, social and governance risks

Financial and reputational risks that originate in environmental (climate, biodiversity, pollution), social (labor, communities, rights) and governance (ethics, transparency, decision-making structure) factors of the institution and its clients.

Climate-related financial risks

They fall into two types. Physical risks come from acute weather events, such as hurricanes and floods, or from gradual changes, such as rising sea levels. Transition risks come from the adjustment to a low-carbon economy: regulation, technology and shifts in demand. Both are transmitted to credit, market, liquidity and operational risks.

SourceBasel Committee (BCBS), Principles for the effective management and supervision of climate-related financial risks, 2022 (opens in a new tab)

How it is measured and quantified

It is a maturing field. Exposure metrics, emissions and scenarios are combined.

  • Financed emissions

    The share of clients’ and investments’ greenhouse gas emissions attributed to the institution’s loans and investments. They are part of Scope 3, category 15, of the GHG Protocol. The PCAF standard and IFRS S2 use them as a reference.

  • Exposure map by sector

    Proportion of the portfolio in sectors with higher carbon intensity or more sensitive to physical events, with risk appetite limits.

  • Physical exposure by location

    Cross-references the location of collateral and clients with the threat of hurricanes, floods and other events.

  • Climate scenario analysis

    Estimates the financial impact of transition pathways and physical scenarios at different horizons.

  • Disclosure

    The ISSB’s IFRS S2 standard, which incorporates the TCFD recommendations, requires disclosure of climate-related risks and opportunities, emissions and the scenarios used.

How it is managed

Coordination

Those who lead the committee. The coordination and co-coordination roles rotate once a year.

Coordination

Dalma Hernández

ABA

Co-coordination

To be appointed

This position is assigned by annual rotation.

Regulations and recommended readings

Standards and documents that the committee uses as the basis of its work.

Sign up for this committee

Members who wish to take part notify the Club’s Executive Committee, and this form is the channel. Regular members and representatives of sponsor members may take part. Not a member yet? Find out how to become one.

    Personal details

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    Write to us
    Club de Gestión de Riesgos de la República Dominicana

    A non-profit association that promotes risk culture and best practices in the Dominican financial system.

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