Sustainable Risk Management in Green Banking

Green banking represents a pivotal component of a sustainable financial system, enabling the transition toward environmentally responsible economies. This paper explores the specificities of sustainable risk management within the context of green banking, focusing on the challenges and opportunities arising from the implementation of sustainable financial strategies. Particular attention is given to the integration of ESG (Environmental, Social, and Governance) criteria into risk management processes, as well as to tools for identifying and mitigating environmental and regulatory risks. The findings highlight the importance of improving the regulatory framework and developing new methodologies for risk management tailored to the unique features of green banking. It is concluded that sustainable risk management not only protects banks from potential losses but also facilitates long-term socio-economic progress. This paper contributes to the understanding of green banking’s role in financial stability and sustainable development.