Three questions for Dr. Bernd Liesenkötter on ESG risks at regional banks

Dr. Bernd Liesenkötter: Because ESG risks are no longer a marginal issue. Step by step, they are becoming an integral part of bank management. This means that regional banks should assess the potential impact of climate, environmental or transformation risks on their business model at an early stage. Those who wait until the last minute to deal with this topic not only increase the implementation pressure lasting on them but also run the risk of appearing ill-prepared in audits. What matters is not so much perfection as a plausible, transparent approach to managing proprietary risks.

Dr. Bernd Liesenkötter: The biggest hurdle is often not implementation willingness but the available data foundation. Especially for their small and medium-sized corporate clients or real estate portfolios, regional banks are often lacking reliable information – for example regarding emissions or energy efficiency classes. That is why banks need a pragmatic approach: Where they are lacking precise data, they must find a way to make reasonable assumptions, calculate approximate values and conduct qualitative assessments. The effort required for this should not exceed the resulting management benefits, so as not to create additional bureaucracy that offers no real added value.

Dr. Bernd Liesenkötter: Banks can clearly set themselves apart from their competitors through their ESG expertise – especially when they don’t simply treat requirements as elements of a checklist but contextualize them for their customers and translate them into good advisory service. Their customers expect guidance, not just more questionnaires. Institutions who explain their sustainability requirements in a clear and understandable manner and combine them with smart portfolio management not only strengthen their own position in the market but can also generate additional financing impetus. That is precisely where the opportunity lies: in viewing ESG not merely as an obligation but as an integral part of future-proof customer relationships.