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Climate change is a serious, widespread threat and requires an urgent global response, including in the management of environmental risks. The authors of the study, the results of which are presented in this article, first of all, set the task of assessing the ESG risks of Russian companies at the regional level. The methodology of the study was based only on the analysis of environmental risks due to the historical features of the development of the Russian Federation, the approach of S&P Global in the field of corporate sustainability assessment was adopted, and then the initial values of the companies ‘ E-ratings were adjusted using the impact map developed by the United Nations. To test the proposed approach to assessing environmental risks, we used a sample of data on types of economic activity in the context of the subjects of the Russian Federation. As a result of applying the proposed approach to data sampling, companies were assigned to one of the three categories that determine their exposure to E-risk: high, moderate, and low environmental risk. The E-risk exposure was also assessed based on the company’s regional affiliation to the relevant federal district. The main conclusion of the study was the confirmation of the need to improve the quality of analytics of companies ‘ exposure to environmental risks, the need for more detailed information disclosed by companies.

Stress testing as an effective method of risk management and crisis management can serve as an effective tool for predicting financial stability, particularly under the impact of ESG risks for companies in various industries working on the subjects’ territory of the Russian Federation. The article considers an approach to stress testing algorithm development for metals industry. At the first stage the current state of the metals industry and trends of further development observed by analysts are considered, the largest domestic representatives of metallurgy are analyzed and their key targets and costs of environmental projects are highlighted. Further, industry risk drivers for organizations doing business in the metals industry are presented. After identifying risk drivers, an approach to assessment of the impact of identified ESG risks is presented, then an algorithm for assessing the impact of ESG risks on the cash flow of the Russian metals industry company is formulated and a scheme of ESG stress testing for a metallurgical company is presented. The conclusion of the study identifies various mathematical models that can be used to improve the forecast quality of the impact of ESG factors, gives the key challenges to be resolved for the development of ESG risk management and the improvement of ESG culture in the business community as a whole, and summarizes the benefits of ESG stress testing, which can be used for a whole list of different managerial and methodological actions.