ESG and sustainable finance

Background to ESG and sustainable finance
The topics sustainability and climate risks have risen to the top of investors and corporates’ agendas over the past years. A key catalyst of this has been the Paris Climate Agreement, which in turn has resulted in the EU Sustainable Finance Action Plan. On a high level, the plan aims to integrate Environmental, Social & Governance (ESG) factors into mainstream risk management & strategy. This poses several challenges and opportunities for corporates and financial industry participants alike, not only to meet requirements, but also in terms of how a shifting landscape and stakeholder expectations may affect strategy and business practices.

How we can help – what is ESG
Transcendent Group are uniquely positioned to support clients as the topic of ESG transitions from defining what ESG means for the specific company and from ESG teams to mainstream Risk & Compliance processes. With a wealth of seasoned risk management experts combined with experienced ESG practitioners, we support our clients in creating material and effective ESG integration in the GRC framework.

Sustainable Finance and ESG Services provided

• EU Sustainable Finance Compliance Projects
• Gap analysis and project implementation to ensure compliance with upcoming regulation
• Integration of ESG factors in Credit Risk frameworks
• Ensuring compliance with EBA guidelines on loan origination and monitoring, methodology development and process integration
• Climate Risk Assessments
• Assess the potential climate risks of company operations, in line with framework by the Task Force for Climate Related Disclosures (TCFD)
• Project Management – ESG integration
• Kick-starting, or reviving, a company’s sustainability strategy

Track record
ESG as part of the compliance function – Banking 
The client had worked with ESG topics for a while and required a consultant to fill a compliance role. As ESG was a key aspect of their operations, it was important that the compliance function could support on ESG issues. Working with the client to ensure that already completed ESG work meets compliance requirements, this project ensured that ESG topics are treated with the same level of scrutiny by compliance as other topics.

Gap Analysis – EU Sustainable Finance Regulation – Banking/Asset Management
In this project our client required assistance in understanding upcoming ESG related regulation and understanding how the regulation would apply to them. This included a gap analysis testing of current operations against the EU Taxonomy regulation, Sustainable Finance Disclosure Regulation, EBA GL 06/2020, & changes to MiFIDII. As a result of the project, the client was able to ensure compliance in a timely manner and assign tasks, roles and responsibilities going forward.

Project Management & ESG Integration – Banking
Our client in this project had an ambition to holistically integrate ESG into a wide area of banking products, and to make it a key part of risk management processes. Transcendent Group took on a project management role, hosted workshops and acted as a technical advisor for methodology development. The project ensured that ESG is integrated the banks risk management processes in a holistic manner.