Becoming Sustainability proof

Services

Becoming Sustainability proof

SustainabilityProof

Services

Becoming Sustainability proof

At Deloitte we have one ambition: to be the guide throughout your sustainability journey. As we recognise the challenges your business faces every day, we want to be the lighthouse to guide your journey to becoming Sustainability proof.

Introduction

At Deloitte we see sustainability as the source of many opportunities. It has the power to harness great potential but if not appropriately conceived and developed it can also represent a series of significant risks. What are they?

Even though the majority of stakeholders today recognise the value and impact of sustainability information they are not ready to grasp the relevance and appropriately determine the impact of such data. Historically, intangibles have never really been accounted for in the same way as tangible assets.

Further evidence suggests that this is also due by the complexity of businesses to understand, identify and prioritize such risks related to intangibles in their Enterprise Risk Management (ERM) process, given that it has a bias for short-term risks linked to strategic objectives of one to two years.

In order to allow investors to make informed decisions on capital allocations, they need accurate, timely and reliable information. In addition, other stakeholders are becoming more keen on holding companies accountable for their impacts on environmental and societal criteria, increasing the need for adequate disclosure on risks.

Transparency and the value of meaningful reporting are the very basis of true sustainability strategies, as corporate disclosure improves and the falling trend in quarterly reporting continues apace.

Unfortunately, short-term corporate targets and quarterly reports, greatly hamper the ability the ability of corporates to be able to align their business strategies with their sustainability strategies, as they feel pushed in a schizophrenic spiral.

Good reporting should enable investors to identify and finance companies which can focus on the long-term drivers of value creation in their business.

The Sustainable Development Goals (SDGs) comprise a global and inclusive agenda to end poverty by 2030. Several private sector players have been deepening their understanding of investment impact and have already sharpened their strategies accordingly. Together, we can make this our investment priority.

Both investors and companies need to pay much attention to the way they capitalise on SDGs and how they inscribe them into their business and investment strategies.

As achieving the UN’s SDGs will require ‘pouring $1.4tn into low-and lower middle-income countries’, the private sector and investors will have a big role to play in this journey. For the private sector to act, policy-makers must step up and empower investors to help them mobilise private capital through regulations, incentive structures, and public-private partnerships.


At Deloitte we have one ambition: to be the guide throughout your sustainability journey. As we recognize the challenges your business faces every day, we want to be the lighthouse to guide your journey to becoming SUSTAINABILITY PROOF.

The need to capitalise on the private sector’s resources represents an opportunity for investors who are already keen on SRI. As outlined, there are a number of SRI strategies that can be helpful in attaining goals in line with the SDGs. Although impact investing has been elected by some as the preferred strategy, we have seen how relevant other approaches are in pursuing specific sustainable themes and already delivering on these targets.

The systemic integration of ESG criteria represents a solid starting point for investors who intend to structure an SDG investment policy. Not only those companies that are proving to be the best performers across classes and industries should be their sole focus.

The SDG investor has a responsibility to ensure that a positive change is made, and is therefore instrumental in making that change.

In this respect, engaging with issuers is essential to guaranteeing that sustainability is embraced by many and in a consistent fashion. The motivators to invest sustainably have radically increased in the past years. What the future holds is an even stronger push and business case for investors to take the lead and reshape the economies and development agenda.

The adoption of environmental, social and governance (ESG) considerations in investments has matured continuously in the past decades. This trend falls under the denomination of SRI – ‘sustainable and responsible investment’ – and it has evolved from a risk management focus (typically linked to investment exclusions of specific companies and sectors) to one that seeks opportunities for the creation of long-term value for business and society.

Promoting ESG adoption throughout the investment value chain can encourage greater private investment in sustainable development, resulting in greater impact. The various actors in the investment value chain, including asset owners, asset managers and companies, have been increasingly including ESG and sustainability information in their reporting processes.

This has meant a strong boost for the SRI market which, to quote the latest Global Sustainable Investment Alliance (GSIA) report 2018, is now at $30.68 trillion of assets being professionally managed, registering an increase of 34 percent since 2016.

Today, several practitioners apply at least some form of extra-financial evaluation in their portfolio, though this is not sufficient to fall under an SRI denomination or to meet the requirements of one specific strategy.

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How do we help you?

Strategy, Risk Management & Compliance

Preparing for the Green Deal

Operations

SDGs integration

Reporting and Assurance

Sustainable Finance

Contact

Francesca Messini

Francesca Messini

Director | Fintech & Sustainable Finance Leader

Francesca is a Director within Deloitte Advisory & Consulting and specialized over the last fifteen years in strategy and regulatory advisory. As part of her role, Francesca is leading the sustainabil... More

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