Dual threat, dual defense

Environmental, Social, and Governance (ESG) considerations and Financial Crime Compliance (FCC) have traditionally operated in separate silos. But what if these two domains could work together to uncover deeper insights and create a stronger, more comprehensive approach to risk management? Our latest paper explores how integrating ESG factors into FCC processes can enhance your institution’s ability to detect illicit activities, comply with regulatory requirements, and build trust with stakeholders. 

Consider these key statistics:

• Environmental crime generates $110 billion to $281 billion in illicit funds a year 
• The global cost of corruption, including bribery, is at least $2.6 trillion per year
• In Madagascar, authorities uncovered illegal financial flows of $160 million from rosewood logging, an illegal practice, from 2009 to 2020
• In 2023, Italian and German authorities arrested 14 people and seized €90 million in assets involving an illicit waste-trafficking scheme

 The potential to leverage ESG considerations within FCC is immense, especially when harnessing advanced technologies like generative AI, natural language processing (NLP), and unstructured data analysis. These tools offer a deeper look into the activities of companies and their networks that may be involved in generating illicit funds. 

Read our point of view to get actionable insights on how integrating ESG principles into FCC frameworks can provide a more comprehensive perspective, enabling your institution to: 

• Proactively detect and prevent financial crime linked to environmental and social misconduct
• Strengthen compliance efforts while advancing sustainability goals
• Improve risk management capabilities and minimize the negative impact of financial crime
• Enhance your institution’s reputation and appeal to socially conscious investors
• Build stronger, more ethical relationships with clients

As financial institutions face increasing demands from stakeholders and regulators for transparency and accountability, integrating ESG into FCC frameworks becomes not a matter of if, but when.