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Sustainability Risk Must Start Changing Financial Decisions
Sustainability risk integration will ultimately be judged by whether it changes financial decisions. Arjun Mahalingam explains why data, governance and risk appetite remain obstacles, how physical climate risk will become increasingly embedded in prudential management, and why resilient institutions must connect sustainability directly to pricing, limits and capital allocation.
Oct 06, 2026
Arjun Mahalingam
Arjun Mahalingam, International Climate Policy Adviser, Bank of England
Tags: ESG and Climate Risk
Sustainability Risk Must Start Changing Financial Decisions
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



  • Data and translating sustainability factors into financial metrics remain major barriers
  • Modular frameworks can evolve alongside new evidence and regulatory expectations
  • Governance is maturing, but board oversight is not always translated into accountable decisions
  • Physical climate risk is moving toward routine prudential assessment
  • Resilient institutions will use sustainability insights to influence pricing, limits and capital allocation 
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