Risk pricing can be an art. As this article demonstrates with the pricing of ESG and the challenges that corporates face with both managing their

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Risk pricing can be an art. As this article demonstrates with the pricing of ESG and the challenges that corporates face with both managing their ESG exposure, and the effect on their market cap and capital markets face with pricing in ESG regulation and the material effects of ESG compliance.

While ESG is front and center for covered registrants, cybersecurity risk management regulation is now here. Requiring SEC covered registrants adopt material cyber risk management compliance and here lies a paradigm that has both similarities and difference between ESG and Cyber. Firstly Cyber compliance has an effect on the ‘G’ and ESG through the requirement for boards to demonstrate their governance to the regulation. Secondly cybersecurity risk management is a national, economic and a whole of society security problem. Thirdly public registrants are required to inform investors of their compliance. Finally demonstrating cybersecurity compliance is more complex than ESG compliance.

Now cybersecurity regulation is here, one wonders how markets are going to price cybersecurity risk into covered registrants, based upon material cyber risk report.

Ted Dziekanowski

#cybersecurity #cyberriskmanagement #cyberregulation.

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