Environmental, Social, and Governance (ESG) Risk as a Challenge for Business

The aim of this chapter is to discuss the impact of ESG risk on business and indicate ways to mitigate this kind of risk. The main directions and spheres of ESG risk impact on the operational and strategic activity of companies are discussed. This chapter focuses on the last definitions of EU taxonomy, ESG risk, and the typology of these definitions, discussing the determinants of ESG risk and identifying the areas of activity of companies most exposed to this risk. The formal and procedural solutions aimed at mitigating ESG risk by business are discussed. The main challenges faced by companies created by ESG risk are described, and possible scenarios for managing these challenges are indicated.