Sustainable Finance

Sustainable Finance is on the agenda of banks and insurers but also all other companies. In fact, it should be part of everyone’s strategy as there are enormous opportunities on green, clean, and social financing ecosystem. Increasing pressures from stakeholders and new regulatory contexts are creating a need for a sustainability transformation in finance.  

We help clients with the whole sustainable finance strategy.  It covers everything from better manage risk exposure and contribute to value creation by embedding ESG considerations into core operations for improved decision-making through counterparty risk analysis, scenario modeling, product and process design. 

We provide a deep understanding and focus on ESG investing and lending, harnessing clean energy sources, reversing financed emissions, and adapting infrastructure to more extreme weather by using intuitive and interactive tools for data collection and analysis, and impact finance advisory.

Our wide range of services include:

• ESG strategy / net-zero strategy – determining business impacts across the organization and provide a road map to make the business more sustainable. Establish a vision for sustainability, including alignment with purpose and supporting the integration of sustainability into your corporate strategy. Educate and assist different functions to embed sustainability considerations into their decision making and operations. Conduct a capability gap assessment to determine the level of change required to meet strategic ambition.
  • ESG objectives and policy development
  • Portfolio analysis and management (environmental and social impact assessments)
  • Scenario modeling (stress testing) and risk and opportunity assessments,
    
  • Financed emissions (scope 3) net-zero strategy: integration into corporate and businesses strategy
    
  • Change management: system implementation and training for different functions
    
    
• ESG risk integration – identifying, quantifying and integrating physical risks and transitional risks with significant negative impacts on assets, earnings and reputation into existing risk frameworks. Enhancing existing risk modeling and stress testing capabilities.
  • Integration of ESG risks into existing risk management frameworks
     
• Finance function – residual emissions abatement advisory (voluntary carbon trading platform), Impact finance advisory (e.g., green products, green and social bonds)
  
  
• ESG products – developing sustainable products (funds, bonds, deposits, loans) in order to increase the flow of finance to green and sustainable projects. Setting up processes and supporting technology in accordance with the standards for sustainable products.
  
  
• ESG data, reporting and disclosure – establishing ESG disclosure requirements on entity and product level. Integrating ESG aspects in the investment decision-making processes and advisory processes. Incorporating ESG aspects in pricing, performance management, capital allocation, financial reporting.
  • Data collection and management
  • ESG reporting and disclosure advisory and assurance (including green bonds)
    
  • Regulatory and voluntary standards advisory (compliance and beyond)
    

Financial inclusion

As the human-centered future of financial services becomes increasingly positioned around customer needs, wants, and social priorities, leading with heart and humanity will be integral to success.  Financial inclusion is a critical consideration in defining an organization’s corporate social purpose.

A more human-centric economy rapidly takes shape and financial services organizations must heed the call to engage with a broader array of customer, employee, and community stakeholders in more direct, personalized, meaningful, and socially responsible ways, leading to more inclusive, educated, sustainable, collaborative world and more profitable financial industry. 

We help organizations promote access to financial services for all and help you to lead the way, with financial inclusion efforts that create a higher bottom line for all. 

Grants and Incentives

Governments around the world are seeking to move towards a net zero carbon economy. This is starting to be driven by a range of grants and incentives to encourage changes in economic activity. The range of initiatives is wide ranging, from groundbreaking R&D to the installation of capital equipment to improve energy efficiency and reduce greenhouse gas emissions.

Many governments have started mobilizing unprecedented funds to support the creation of thousands of green jobs as their economies transit to net zero. Identifying the appropriate grant or incentive scheme, developing a compelling case for grant and complying with the requirements for managing a funded project can be complex and time consuming.

Deloitte supports you to establish a funding program or grants and incentives initiatives to support the green transition.

In addition, Deloitte professionals can assist in the following areas:

• Developing application strategy tailored to business plans to maximise the volume of benefits and optimise related commitments
  
• Drafting applications for different funds and grants and advising during the realisation and maintenance periods (aftercare phase)
  
• Assisting informing necessary consortia for funds requiring joint application
  
• Assessment of future aid opportunities or of existing aid against EU state aid requirements
  
• Representation of clients before the EU Commission in state aid cases
• Cost benefit analysis

CFO’s Sustainability Agenda

Environmental, social, and governance (ESG) risks increasingly demand the attention of chief financial officers (CFOs). ESG data points or failure to report can be as harmful as a negative financial disclosure. We guide CFOs on how to manage sustainability risk, assess climate change resilience, inform strategy, understand regulatory compliance, and create long-term value as they transition from CFO to chief value officer.

We cover a wide range of CFO concerns, challenges and opportunities and have helped a number of leading organisations in starting their journey towards a sustainable business performance:

ESG Ambition and Strategy

• Board and Business buy-in – stakeholder engagement, and education, corporate governance for sustainability, leadership incentives
  
  
• ESG Investments, Funding, Taxation – business case & prioritisation of investments, funding of sustainability
  
  
• Finance Operating Model & Capabilities – finance operating model, enable ESG outcomes via finance operational processes, future of finance skills and capability
  
  
• Compliance, Data & Reporting – understand, deliver and automate reporting across various regulatory and external reporting frameworks, integrated management reporting
  
  
• Analytics & Decision Support – integrated ESG/carbon planning & controlling, product, customer, supplier, project insights and analytics, Ffnance and ESG role in procurement & supply chain

ESG in Rewards and Benefits

The actions of business executives are seen as critical in driving the ESG strategy. Although there are mixed views around the effectiveness of incorporating ESG metrics in Executive Board remuneration, it can be a powerful tool for driving leadership behaviors if structured in the right way and linked to transparent and quantifiable performance metrics.

How we can help:

• Embedding more non-financial (ESG) metrics and targets in executive and management incentive plans, both in the short term as in long term incentive plans.
  
  
• Defining and including ESG metrics and targets in the employee’s bonus plans, collective or individual plans.
  
  
• Translating the well-being of your employees also into their reward package, such as offering a flexible benefits package, sufficient benefits and pensions.
  
  
• Ensuring Fair Pay, as this is one of the most enduring and unjust realities in the global workplace. Achieving pay equity is no longer solely a matter of eliminating sex discrimination but requires a deeper examination of varying perspectives and a more granular look at reward data.
  
  
• Designing and implementing green rewards