Two sides of the same coin? On the practical convergence between ESG regulation and AML/CFT and its implications for banks

Environmental, Social and Governance (ESG) obligations and anti-money laundering and counter-terrorist financing (AML/CFT) requirements are commonly treated as separate regulatory regimes. In practice, banks increasingly encounter situations in which ESG-related risks and AML considerations overlap. This article explores the practical convergence between ESG regulation and AML/CFT frameworks and its implications for banks’ gatekeeping role. It shows how environmental and social misconduct may generate money laundering risks under the all-crimes approach and argues that banks should adopt an integrated, risk-based approach to effectively manage integrity and societal risks.

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• Two sides of the same coin? On the practical convergence between ESG regulation and AML/CFT and its implications for banks door J.G.C.M. Galle & S.A. Serberie in Compliance, Ethics & Sustainability