This book provides a comprehensive analysis of the regulatory framework governing sustainability in the non-banking financial sector, with particular emphasis on insurance companies and investment funds. It examines the implications of environmental, social, and governance (ESG) and climate-related regulations for ESG risk to management practices and market behaviour within these institutions. While existing literature predominantly focuses on the banking sector, this book addresses a significant research gap by offering an in-depth examination of non-banking financial institutions.

The book is structured into two parts. The first part outlines the general sustainability framework applicable to insurance companies and investment funds, focusing on key concepts, regulatory developments, and emerging trends in ESG risk regulation across the non-banking sector. It explores how insurance companies and investment funds design and implement ESG risk management strategies in major jurisdictions, including Europe, the United States, and other global markets. The second part assesses the impact of ESG regulatory frameworks and their ongoing evolution on market behaviour, considering factors such as geographical location, industry characteristics, firm size, and the level of market development.

By integrating an analysis of existing regulatory initiatives with practical insights into ESG risk management, the book offers both theoretical and applied perspectives. It is intended for academics and students in financial law, economics, and sustainable finance, as well as for policymakers, regulators, and practitioners seeking to understand, assess, and manage ESG risks in financial institutions.