The Evolution of the Banking Risk Management System Under the Influence of ESG Factors

This article examines the structural and functional evolution of banking risk management systems under the growing influence of Environmental, Social, and Governance (ESG) factors. Traditionally confined to credit, market, and operational risks, banking risk frameworks are undergoing a paradigm shift toward an integrated approach that internalizes non-financial externalities. Through a conceptual analysis of global banking practices and regulatory trends, the research identifies a transition from backward-looking, historical data-dependent models to forward-looking, scenario-based methodologies. Key findings suggest that ESG factors have evolved from peripheral corporate responsibility concerns into material risk drivers that directly influence asset quality and institutional resilience. The study categorizes this evolution into three levels of institutional maturity: exclusionary screening, internal rating integration, and strategic alignment with sustainability goals. Furthermore, the paper highlights critical implementation challenges, including data fragmentation, the risk of "greenwashing," and the lack of standardized metrics, particularly in emerging markets like Uzbekistan. The research concludes that while the conceptual integration of ESG is well-advanced, the practical effectiveness of these systems remains constrained by the maturity of data infrastructure, necessitating a proactive approach by regulators and financial institutions to ensure long-term financial stability.