Investment risk management specifics in ESG investing: CEE stock markets examining

One of the most dynamic trends in the development of the modern market of financial investments is ESG investing. Investing which is based on the inclusion of Environmental, Social and Governance criteria into consideration. In this case, there is an actual problem of analysis mapping ESG criteria with investment risk management. This article considers specific features of inclusion ESG assessments into investment risk management. For this purpose, the S&P Global system of ESG scores was used. The assessments of market risk for both direct and portfolio investments were considered. The dichotomy between the approaches of diversification and prioritization based on ESG criteria had been identified. The article offers expansion of portfolio risk management within the framework of a three-criteria optimization model (risk, return, and ESG score based criteria). The article justifies the investment decision on the basis of construction of an effective set of pair “risk – ESG score” which provides an analogue of the classical frontier line in modern portfolio theory. The implementation of this approach was carried out to the companies included into stock index baskets of three Central and Eastern European (CEE) stock markets: Poland, Czech Republic and Hungary. 
JEL classіfіcatіon: G11