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From Compliance to Resilience: Embedding Sustainability Risk into Financial Decision-Making
Arjun Mahalingam discusses the operational realities of integrating sustainability risk into mainstream risk management. He highlights persistent challenges around data quality, governance, risk appetite translation, and the growing importance of physical climate risk and adaptation. The discussion outlines how institutions can develop flexible frameworks capable of evolving alongside emerging methodologies and regulatory expectations, while maintaining a focus on actionable decision-making.
Oct 02, 2026
Arjun Mahalingam
Arjun Mahalingam, Head of Risk Centre, United Nations Environment Programme Finance Initiative
Tags: ESG and Climate Risk
From Compliance to Resilience: Embedding Sustainability Risk into Financial Decision-Making
The views and opinions expressed in this content are those of the thought leader as an individual and are not attributed to CeFPro or any other organization
  • Sustainability risk integration remains constrained by data availability and challenges linking sustainability factors to financial risk metrics.
  • Firms should adopt modular risk management frameworks that can evolve alongside regulation and emerging evidence.
  • Governance structures are maturing, but accountability and risk appetite translation remain key weaknesses.
  • Physical climate risk is expected to become a routine prudential management consideration over the next three to five years.
  • Resilient institutions will use sustainability insights to actively influence pricing, limits, capital allocation, and strategic decision-making.
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