FUTURE OF FINSERV
At Mphasis , one of the growth pillars for ESG is implementing innovative green practices and minimising ecological footprint . Also , according to our ESG report , at Mphasis 48 % of energy needs are fulfilled through renewable energy and we saw a 148.69 % increase in total waste recycled in 2023 .
In the future , we will see a lot more of this creeping into mandates from clients as well . As such , capital flows will support transition plans made by governments across the world . are becoming integral considerations in risk management .
Financial institutions are adapting by incorporating environmental , social and governance ( ESG ) criteria into their decision-making processes .
John Stephens In the years to come , the financial services sector is likely to be significantly affected by both the physical and transitional risks associated with climate change .
Some of the physical risks include the harm to people and property arising from acute , climate-related events such as hurricanes , wildfires , floods and heatwaves , whereas transitional risks refer to stresses impacting certain banks or sectors arising from the shifts in consumer and business sentiment .
Losses from natural disasters are already increasing , resulting in insurance increasing or even being unavailable in at-risk parts of the world . Consequently , climate change can make banks , insurers and reinsurers less diversified , because it can increase the likelihood or impact of events previously considered uncorrelated , such as droughts and floods .
Going forward , it will be important for insurers to understand that their physical risks are essential on the asset side , but risks also arise from the liability side as insurance policies generate claims with a higher frequency and severity than originally expected . fintechmagazine . com 119