Masterclass: ESG and Credit for Banks (3 hrs)

This masterclass examines ESG factors and their importance in the credit assessment of banks. It incorporates examples and exercises as appropriate. 

The masterclass explains how ESG factors overlap with credit risk and how they can be integrated in the credit analysis process. The key objective is to provide a solid understanding of how ESG risk factors may drive credit risk in the banking business model and how banks are adapting to the challenges of becoming more sustainable.

Key Learning Outcomes:  

Obtain a good understanding of the intersection of ESG and credit, incorporating risks, principles, definitions and drivers and how these apply to credit analysis

Determine how each of the three ESG risk types fit with the traditional bank credit analysis model and how the materiality of ESG factors affects the credit decision

Analyze ESG factors’ impact on expected loss - PD, EaD and LGD

Evaluate the challenges to integrating ESG issues in credit analysis

Understand regulatory changes and their consequences for banks

Determine the risks of failing to address ESG issues on the banking business model

Understand how ESG risks are considered in credit ratings

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This course is suitable for foundation and intermediate level participants with analytical roles assessing banks. It is also relevant for investors, risk analysts, corporate treasurers, regulators, bankers and relationship managers who need to understand the impact of ESG factors on the credit profile of their bank customers and counterparties.  

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