Compliance Insights

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What Role Should Compliance Play in ESG?

The big picture: Compliance plays an important role in the governance and oversight structures of a financial institution. As with other regulated activities of an institution, compliance teams should have a seat at the table when implementing ESG initiatives. 

Why it matters: Regulatory expectations for ESG are increasing and managing regulatory and reputation risk will become more important than ever. While international bodies are likely to align existing ESG frameworks and standards over the upcoming months, ESG topics will remain complex and Compliance will need to have a greater role in navigating them. 

The bottom line: The knowledge, skills and experience of compliance teams mean that it is vital that they step forward and bring this understanding to bear in ESG. To ensure ongoing compliance with a growing number of ESG-related regulations, a holistic framework for identifying, measuring, managing and reporting ESG risks and mitigation strategies is needed. 

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