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Climate change and increasing pollution worldwide are modifying the way businesses operate through the way legislative systems work and thought the alternation of consumer preferences. Banks as institutions playing key role in the world economy are not exempt from this trend. For them changing circumstances translate especially in changing risk profiles of their clients which requires adaption of the risk management procedures in order for the new risks to be captured. Once this need is acknowledged, there come the questions of how to do it in practice. Existing methodologies of leading international financial institutions come at aid. Enhancing risk management with the addition of environmental risk awareness and monitoring leads to increased awareness in the banks of various opportunities – to improve risk management from within, to know their customers better, to create new services and product which to meet the new needs of beneficiaries.

The current paper is aiming at presenting a high level view of the matters outlined above and at showing that the implementation of environmental risk management in banks could be only beneficial to them.

environmental risk management, banks, lending, climate change, pollution