Sustainability

Realise the Transformation to a Sustainable Economy.

We believe that Sustainable Finance is not only a regulatory requirement, but also an opportunity for you to make an impact on our environment and create opportunities. Furthermore, we believe integration of sustainability risk will improve your risk management.

We observe Sustainable Finance regulatory requirements to increase in terms of both magnitude and impact with market participants stepping up to the challenge.

Sustainability is a no longer a topic on the corporate communication agenda only. Driven by client needs, regulatory requirements as well as an increased appreciation of the risks involved, the subject has received increased attention in the financial services sector. Moreover, the societal call for the financial sector to contribute to a sustainable future continues to increase. Banks, insurance companies, asset managers, private equity and other market players are considered instrumental to finance and realise the transformation to a sustainable economy.

The European Commission has set an action plan on Sustainable Finance, aiming for a greener and cleaner economy, committing to the Paris climate agreement and incorporating the TCFD recommendations. We observe Sustainable Finance regulatory requirements to increase in terms of both magnitude and impact with market participants stepping up to the challenge. We believe that Sustainable Finance is not only a regulatory requirement, but also an opportunity for you to make an impact on our environment and create opportunities. Furthermore, we believe integration of sustainability risk will improve your risk management.

We can assist you addressing the multiple challenges we observe market participants are facing, including:

How can you align your strategic sustainability priorities with your strategic project portfolio?
How can you meet the short regulatory timelines while aligning initiatives with your strategic priorities?
How can you effectively manage the many sustainability driven change initiatives and strengthen your sustainability capabilities while facing resource constrains?
How can you identify and manage the complex dependencies, with the implementation of sustainability requirements affecting both the BAU activities and the change initiatives already in place?
How can you identify the most appropriate approach for sustainability risk integration while facing data availability issues?

We are passionate about sustainability and we make use of what we are good at to make a positive impact and to contribute towards a more sustainable society.

Developments within Sustainable Finance Regulations

We believe Sustainable Finance is one of the most important developments within the (regulatory environment of) financial sector. It is also still one of the lesser-known developments. However, this is expected to change very soon.
Over the last couple of years, there has been a large increase in the development of new regulations in the area of Sustainable Finance, coming from the European Union and the European Committee. Additionally, the European Union has developed an action plan for sustainable growth. Next to these developments, the United Nations has been able to increase the momentum of its program around Sustainable Finance (UNEPFI), which involves highly renowned financial institutions from around the globe. This initiative builds upon the Sustainable Development Goals and provides further substance to the Principles for Responsible Banking/Investments/Insurance.
As of today, regulations regarding financial disclosures, frameworks for KPIs and accounting standards, a taxonomy of economic activities and a range of scenario analyses looking into the impact of climate risks on the financial solidity of financial institutions have been introduced. A complication is that these regulations have published deadlines – sometimes in the near future – whilst a lot of the more detailed regulations are not final yet, thus giving the financial industry little time to prepare and implement. Sustainable Finance ranks high on the priority list of the DNB and they will integrate climate-related risks in their supervision and in the monitoring of financial stability.

The regulatory and supervisory initiatives aim for sustainability risk to become a full-fledged new risk category in the overall business operations of financial institutions. As a result, the impact of these new regulations on the financial services sector is very high. We can support you in answering questions such as:

What are the actual contents of new sustainability regulations and which sections of these regulations apply to us?
How far do our ambitions reach in this area? Do we only want to satisfy the bare minimum of demands or do we want to be part of the early adopters and thought leaders and go way beyond the bare minimum? Or do we want to find a course of action somewhere in the middle?
What is the impact on our organisation? To what extent do we have knowledge regarding these regulations in-house and do we have the right data, processes and systems available?
How can we best organise the changes required for implementing Sustainable Finance regulations?
How can we utilise these regulations to develop new business opportunities?

Over the last years financial institutions have developed and implemented policies to decrease risk driven by adverse environmental and social (sustainability) developments. While the primary focus of the initial measures was limited to reputational risk (resulting certain clients or businesses being excluded), many policies currently in place provide a basic framework to identify and manage sustainability risk.

Most of these risk policies and measures have not been integrated into primary risk and pricing models due to inconsistent and unmeasurable indicators. The relevance of these measures varies by sector, complicating the design and implementation of a comprehensive framework. Effective integration of sustainability risk offers business benefits:

Enhanced resilience: Anticipate emerging sustainability risks.
Competitive advantage: Adapt to changing social and environmental expectations.

Despite recognizing these benefits, market participants struggle with the right approach and resources. We can help set up or strengthen your sustainability risk framework to answer key questions and control your integration initiatives.

In the analysis phase, sustainability management frameworks generate decision-useful outputs by assessing environmental, social, and governance factors. These factors are often hard to quantify and not always available. The next step involves assessing your client portfolio’s exposure to these factors, using scenario analysis and stress testing to quantify impacts.

We understand the challenges of data availability and traditional approaches. Our expertise in risk processes and regulatory developments allows us to provide a structured approach to effectively integrate sustainability risk and realize its benefits.

Interested in working with us.

Call 085 3034271 or complete the form and we will contact you within 24 hours.