ESG Risk Is a Core Concern for Financial Services Regulation
8 Pages Posted: 6 Jun 2022
Date Written: April 22, 2022
Abstract
This is our submission in response to the Australian Law Reform Commission’s Background Paper FSL5 Risk and Reform in Australian Financial Services Law (March 2022).
In it we suggest that a much wider and deeper consideration of ESG risk management throughout the financial services sector in Australia and overseas is not just desirable but necessary.
Our submission focuses first on the broad question of ‘social’ risk factors (the ‘S’ in ESG) for the sector and, in that regard, specifically on the human rights impacts of financial services and their regulation. And secondly on the particular ‘conduct and product risks’ within financial services that impact directly or indirectly on relevant human rights concerns.
In addition to a range of international and domestic sources, our submission draws directly on the research, data and findings that comprise our Financial Services Human Rights Benchmark (FSHRB) launched in May 2021 measuring the levels of human rights risk management and compliance of the largest 22 financial services entities listed on the Australian Stock Exchange.
Keywords: ESG, Finance, Risk, Human Rights, Regulation
JEL Classification: G18, G28, G32, G38, K22, K23, K32, K33
Suggested Citation: Suggested Citation