Financial institution staff should compile all environmental and social findings from monitoring clients/investees and aggregate findings at the portfolio level. By analyzing this information, the financial institution can have a better understanding of its overall exposure to environmental and social risk through its portfolio.
Environmental and social performance reports typically include information on:
- Portfolio breakdown by business line, industry sector and environmental and social risk category
- Overall exposure to environmental and social risk and performance
- High-risk transactions and environmental and social due diligence process prior to transaction approval
- Major environmental and social risks of individual transactions, including cases of non-compliance
- Significant environmental and social accidents or incidents related to a transaction
- Implementation and changes in the financial institution’s ESMS
A financial institution may have internal and external reporting requirements regarding the environmental and social risks and impacts associated with its portfolio. To this end, an increasing number of financial institutions are following internationally adopted sustainability reporting guidelines.
