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Audio July 7, 2025

ESG Risk Blind Spots Threaten Financial Sector Resilience

Merlin Linehan, Risk Manager, EBRD

Mikko Venermo, Lead Financial Officer, Sustainable Finance and Sustainability Reporting, IFC

Kurt Neilson, Resilience and Supplier Oversight Director

As ESG risks grow more complex, financial institutions face mounting pressure to integrate environmental, social, and governance standards into third-party oversight. In this episode, experts from Aegon UK, EBRD, and the IFC explore practical strategies for assessing supplier ESG compliance, managing geopolitical risk, and aligning due diligence with evolving global standards, offering actionable insights for risk leaders navigating a shifting landscape.

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As ESG becomes a non-negotiable in financial services, institutions must pivot from checkbox compliance to strategic integration. One major takeaway from this episode of Risk Leaders Connect is that ESG risk is no longer confined to niche categories like emissions or child labor.

Instead, it's a sprawling and evolving web of material risks, ranging from geopolitical instability and cybersecurity gaps to sub-regional vulnerabilities in global supply chains. Companies must now go deeper and further into the third-party ecosystem, using data-informed frameworks to prioritize risks and responses.

Another key insight is the rising tension between resource constraints and growing ESG expectations. With over 600 suppliers, Aegon UK had to get strategic, focusing its efforts on just 50 vendors that represent 88% of its spend. This kind of laser focus helps ensure ESG oversight where it matters most.

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