Embedding ESG into finance strategies
The sustainability revolution is arriving faster than many companies expected, and it’s expanding to include a wider range of environmental and social concerns. Six out of the top-seven long-term global risks are related to sustainability issues. Sustainable finance requires more than simple risk management. Increasing pressures from competitors, customers and market demand, in addition to political concerns and regulatory requirements, are creating a need for sustainability transformation in finance.
Sustainable finance refers to any form of financial service integrating environmental, social and governance (ESG) criteria into the business or investment decisions for the lasting benefit of business and society. Major private and public investments are needed to transform the economy to deliver on ESG goals. Therefore, sustainable finance is crucial for implementing strategies to achieve the Sustainable Development Goals (SDGs).
The financial services industry can play an important role in transitioning to a more sustainable world including steering capital away from the most polluting companies and toward those demonstrating environmental and social leadership.
Additionally, ESG is being integrated into mainstream financial processes. And organisations with robust ESG strategies are seeking to use financing to create an incentive structure that’s more aligned with long-term sustainability goals.
How Deloitte helps clients
Deloitte provides leading-edge advisory services to businesses seeking to forecast sustainability challenges and obtain support with planning and driving change.
We work with clients to determine specific business impacts across their organisations and help develop a road map to guide their journey. To assist your organisation with achieving sustainable finance, we help identify where investments, lending, and operational finances might carry social and environmental risks, and work to mitigate them. We also work with your business to implement climate-resilient financial operations to help integrate ESG criteria into your business (or a loan or investment) in a responsible and dependable manner.
As part of our engagement process, we educate and assist business functions (including strategy, finance, legal, compliance, risk, and front office) to embed sustainability considerations into your decision-making and operations. We also conduct a capability gap assessment to determine the level of change required to meet your organisation’s strategic ambitions.
We help identify commercial value from sustainable finance activities, recognising and anticipating risk, as well as identifying potential revenue streams through innovation of product suites.
Deloitte’s Sustainable Finance services
Materiality & Vision
- Board level education for corporate purpose
- Scenario modelling (including stress testing) and material risk and opportunity assessments
- Taxonomy advisory
- Economic impact assessments, market studies and valuations
Planning & Targets
- Sustainability and decarbonisation strategy with targeting setting and commitments
- Sustainable Finance product design
- Environmental and social footprint analytics
- Portfolio management
- Divestment advisory
- Disaster risk insurance advice
- Intuitive and interactive digital tools for analysis (Applied design with data-driven insights) and data management
- Impact finance advisory (e.g., green products, green and social bonds)
Governance & Sustainment
- Integrating ESG into “core” risk management (counterparties)
Measurement, Assurance & Reporting
- Investor relations: voluntary ESG reporting advisory and assurance (e.g., TCFD, SASB)
Deloitte helps organisations throughout their sustainable finance journey – from ideation through leadership in the ESG marketplace.
We’ve built market-leading assets to help navigate the complexities of data management and modelling, including identifying material climate risks in financial portfolios and stress-testing (ClimWise) and scaling integration of ESG and climate criteria information in investment decisions (ESG Datalab).
We’ve helped define sustainability frameworks and guidelines that have become well-established in global businesses. Leading analysts, including Gartner, Forrester, IDC, and ALM Intelligence, recognise Deloitte for our work.
We leverage our extensive and rapidly expanding network of sustainability practitioners in more than 162 countries to provide our global clients with localised support to navigate their linguistic, cultural, and geopolitical complexities.
Through our culture of collaboration and extensive alliances, we assemble industry leaders and experts to bridge the gap between business and academia, and technology and science to provide the direction our clients need. This includes green and sustainable finance forums, and sustainable finance research institutes.