ABSTRACT
The main aim of this chapter is to discuss the impact of environmental risk on banks. The main directions and spheres of environmental risk impact on the operational and strategic activity of banks are discussed. Environmental risk is discussed against nonfinancial risk as one of its components: component “E.” This chapter focuses on the definitions of environmental risk and the typology of these definitions, discussing the determinant of environmental risk and identifying the areas of activity of banks most exposed to this risk. The main challenges faced by banks created by environmental risk are described, and possible scenarios for managing these challenges are indicated. Attention is paid to the special role and challenges faced by central banks in the context of dealing with environmental risk.
