AML & ESG Risk Intersection

Section 1: Overview of the ESG-Financial Crime Nexus

• Explore why environmental crimes have become one of the most profitable illicit activities in the world, and understand how the convergence of ESG risk and AML creates a blind spot that criminal networks are actively exploiting.

Section 2: The Environmental Pillar: Crimes against the Planet

• Examine the five primary categories of environmental crime, their financial scale, the geographic regions at highest risk, and the specific red flags each category leaves in financial transaction data.

Section 3: The Social and Governance Pillars: Human Rights and Corruption

• Trace how human trafficking powers the labour infrastructure of environmental crime, and see how corruption in the Governance pillar functions as the administrative cover that allows these violations to persist at scale.

Section 4: Mechanisms of Convergence: How ESG Illicit Proceeds are Laundered

• Follow the money through placement, layering, and integration, and learn how Trade-Based Money Laundering, commingling at processing facilities, and front company structures conceal the origin of ESG crime proceeds.

Section 5: Regulatory Guidance and International Standards

• Apply the FATF recommendations that govern your institution's obligations, understand FinCEN SAR filing requirements for environmental crime in precise technical detail, and build these obligations into an integrated ESG-AML compliance framework.

Section 6: Detection Systems and Risk Indicators

• Use the transactional red flag indicators from FATF and FinCEN, apply supply chain audit principles to Tier 2 and Tier 3 supplier relationships, and leverage the Wolfsberg correspondent banking framework to manage high-risk regional exposure.

Section 7: Knowledge Check

• Test your understanding through questions and consolidate your learning with a closing summary of the course's key principles and takeaways.

At the end of this course, you will be able to:

• Identify the five primary categories of environmental crime and explain how each category generates illicit proceeds.
• Classify how the Social and Governance pillars of ESG connect to AML risk through human trafficking and corruption.
• Trace the three stages of money laundering as they apply specifically to ESG-linked crimes, including commingling and Trade-Based Money Laundering (TBML).
• Evaluate transactional and behavioural red flags associated with ESG-linked financial crime using FATF and FinCEN guidance.
• Apply FinCEN SAR filing requirements correctly when reporting suspected environmental crime activity.