The stark reality is that the financial services sector is facing substantial change. Traditional risk-management frameworks are proving inadequate for today's complex, interconnected threat landscape. Non-financial risks, covering anything from climate change and cybersecurity to social unrest and regulatory divergence across jurisdictions, are no longer minor concerns but the central drivers of business performance and sustainability.
For a second consecutive year we at Projective Group have completed an extensive study of the non-financial material risk disclosures facing the world’s largest banks, insurers, asset managers, financial market infrastructures (FMIs) and law firms.
For a second consecutive year we at Projective Group have completed an extensive study of the non-financial material risk disclosures facing the world’s largest banks, insurers, asset managers, financial market infrastructures (FMIs) and law firms.
The report includes more than 1,500 individual disclosures taken from the annual reports of 170 organisations across 22 countries and reveals striking shifts in corporate risk priorities and reporting practices. Despite an unavoidable data lag of six months, our findings show strong directional trends and regional divergence that provide clear market insights for industry leaders and risk assessment teams.
Download our non-financial & sustainability risk benchmarking report here.
The global shift toward DMA as a new standard
The data suggests that 2026 will be the year DMA becomes the global standard for large public companies. Financial institutions that wait for regulatory mandates will find themselves playing catch-up while early adopters gain competitive advantages through superior risk management, stakeholder trust, and operational resilience.
Financial institutions that wait for regulatory mandates will find themselves playing catch-up while early adopters gain competitive advantages through superior risk management, stakeholder trust, and operational resilience.
Double Materiality Assessments (DMA), a key component of the EU Corporate Sustainability Reporting Directive (CSRD) represent a new approach to risk evaluation requiring organisations to evaluate an organisations material Impacts, Risks and Opportunities from two critical perspectives.
Firstly, there is financial materiality which is concerned with how external environmental, social, and governance factors impact financial performance (i.e., Risks and Opportunities). Then there is impact materiality which considers how the business’ operations affect people and the environment (i.e., Impacts).
Tellingly, the growth in adoption of DMA’s extends far beyond Europe, where the CSRD mandates such reporting, indicating a global shift in corporate transparency expectations.
Adoption and early findings: DMA goes mainstream
Our study presents compelling findings. There has been a 46% increase in firms adopting DMA reporting between 2024 and 2025. 70% of major institutions now disclose DMA findings, proving this isn't just a European phenomenon. It anticipates continued growth in the disclosure of non-traditional ESG topics, including financial crime, artificial intelligence, and cybersecurity risks, though adoption rates remain surprisingly low.
Non-financial risks move centre stage
In the past, boards have treated environmental, social, and governance (ESG) factors as compliance checkboxes or public relations exercises. That era is ending. The latest research reveals a fundamental shift: 70% of major financial institutions now recognise that non-financial risks have a direct impact on their bottom line (up from just 42% in 2024).
One-third of all disclosures still focus on governance topics.
Environmental factors jumped from 27% to 31% of all risk disclosures in just one year. Climate adaptation and biodiversity concerns both moved up in overall risk rankings. Climate change mitigation maintains its position as the second most disclosed risk globally. One-third of all disclosures still focus on governance topics. Emerging digital risks including AI, cybersecurity, and data privacy gain recognition but remain surprisingly under-adopted.
Regional divergence widens amid regulatory pressure
Despite global alignment on top priorities (robust governance, climate change, workforce management), significant regional differences are appearing. North American firms show 33% decline in DEI disclosures. European institutions lead in comprehensive risk disclosure adoption. Further expanding the rift between the EU and other jurisdictions, a raft of new EU regulations including the CSRD (Corporate, Sustainability reporting Directive), SFDR (Sustainable Finance Disclosure Regulation), CBAM (Carbon Boarder Adjustment Mechanism); and EUDR (Deforestation Regulation) are increasing sustainability disclosure requirements for financial institutions at both entity and product level. Companies will need to carefully navigate this significant regulatory divergence balancing the different needs of shareholders, regulators, customers and other stakeholders across their global footprint.
Companies will need to carefully navigate this significant regulatory divergence balancing the different needs of shareholders, regulators, customers and other stakeholders across their global footprint.
Discover your blind spots and benchmark your maturity
Download the full report to discover where your firm stands in the risk revolution and identify potential blind spots in your materiality assessment. Our Projective Group experts are standing by to provide tailored insights that will help you navigate this evolving landscape with confidence.
About Projective Group
Established in 2006, Projective Group is a leading Financial Services change specialist.
We are recognised within the industry as a complete solutions provider, partnering with clients in Financial Services to provide resolutions that are both holistic and pragmatic. We have evolved to become a trusted partner for companies that want to thrive and prosper in an ever-changing Financial Services landscape.
