Publication

With the heightened urgency of climate risk, the public health and economic effects of COVID-19, and global demands for racial, social, and economic justice, the ESG conversation is now more vital and more complex than ever for leaders of large financial institutions. Most leaders now agree that ESG, once a conversation confined to corporate social responsibility teams, is a set of mutually reinforcing risks that demand attention not only in the executive suite but also in the boardroom. Mismanagement of climate and social risks not only poses reputational risks, but also the potential for financial harm, unhappy customers and employees, and investor and regulatory scrutiny.

On September 17, senior executives and board members of banks and insurance companies headquartered in North America and Europe joined senior leaders from EY to discuss the evolving ESG agenda. Participants exchanged perspectives on how the ESG agenda has changed in 2020, the actions leaders are taking in response, and the challenges to future progress that persist at the firm and systemic levels. The conversation will inform Bank and Insurance Governance Leadership Network discussions through the end of 2020, including the Financial Services Leadership Summit. Three major themes surfaced:

• The events of 2020 have accelerated the need for progress on ESG.

• Financial services firms are embedding ESG more deeply within their organizations.

• Challenges remain for effective oversight and execution of ESG strategies.