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What is ESG Risk?

ESG risk refers to potential negative impacts on a company’s financial performance due to environmental, social, or governance issues. Examples include regulatory changes, reputational damage, and operational disruptions. Managing ESG risk involves identifying, assessing, and mitigating these risks through sustainable practices and policies. Effective ESG risk management can enhance resilience and long-term value. Investors increasingly consider ESG risks in their investment decisions.

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