How do you add ESG/SRI/Sustainability risks to a risk taxonomy?

[Dimitri Vulis]

Starting, for examples, with something like the ORX risk taxonomy, which is a little dated, how would you add to it events and their root causes that reflect the emergent ESG (environmental, social and (corporate) governance) / SRI (socially responsible investing) / Sustainability risks?

 

[Christian]

The company I work for - Arbol - works with companies to forecast climate risk and then hedge that risk via structured parametric financial products. I'm not sure if it directly fits into the framework you mention here, but for example for the Environmental risks of ESG impact of climate can be quantified. For some industries the relationship between climate and business risk is more direct - energy firms, agriculture, resorts - while others need more consultation to correlate climate to business impact.