Trends in Financial Services
Across the financial services industry; from commercial and investment banking to diversified asset management, from capital markets to private equity and insurance; ESG issues are material to accessing capital.
The importance of sustainability considerations into global financial services has become central to strategic management of opportunities and risks. ESG (Environment, Social & Governance) Risks are now seen as mainstream financial considerations driving the integration of ESG Risk and Enterprise Risk Management (ERM). Moreover, climate related financial disclosures are an expectation as stakeholders in the financial markets increasingly demand decision-useful, climate-related information. According to the World Economic Forum’s Global Risks Report 2020, for the first time the top five risks by likelihood were environmental.
The key question facing businesses in the sector is how to get direct action in sustainable investing and how to meet the evolving standard requirements to maximise the commercial opportunity available and be considered prudent from a risk perspective. Sustainable financial services must drive performance and mitigate risks through collaboration and transformation to build long-term value. Anthesis’ financial advisory consultants support the financial services sector in its transition toward a low-carbon economy by aligning growth with due diligence.
Sustainability in the Financial Services Industry
The financial services industry has a crucial role to play in funding the response to climate change to prevent a greater than 2-degree global warming scenario. A failure to address sustainability topics result in measurable financial and societal losses. However, engaging with modern sustainable finance practices can drive impactful growth that can facilitate the transition to a low carbon economy, encourage growth and protect financial and business institutions from climate-related risks.
All financial firms must put in place the procedures to show they are looking for ESG risks and opportunities and assessing them. To close the gap between current state and stakeholder expectations, they must integrate sustainable finance methods and ESG into investment decision making, portfolio risk management, operational improvements, portfolio companies and investment holding assessments and reporting to LPs.
Financial Sector Expertise
With over 100+ years of combined experience, Anthesis’ global team has the sustainable finance consulting expertise to help financial institutions identify risks and opportunities for capital formation around decarbonisation, ESG and other sustainability topics. We support clients in understanding the landscape to proactively avoid ESG risks and position their company to capture growth in ESG & Corporate Social Responsibility (CSR).
We wanted the ESG screen as we were keen to understand the definition of ESG and to see the criteria you would be using. We were also interested to see how others would view us through this lens. The Anthesis screen provided us a with a “mirror”. The value to Neste was that it confirmed we are on a right track to addressing ESG issues. It also helped us to identify some potential improvement opportunities, several of which we are working on, and others that warrant further evaluation.
Anthesis supported us in the preparation of our 2018 Integrated Report and in the development of the materiality analysis of Roche Colombia. Their experience and knowledge were key to allowing us to focus on the most important issues for our company and stakeholders, and helped them [our stakeholders] understand our advances in environmental, economic, social and good corporate governance.
Corporate Social Responsibility Leader, Roche
I have worked with Anthesis for many years. They have a depth of ESG understanding and expertise, allowing real analysis and advice on the emerging issues that are becoming increasingly material to our clients. What sets them apart is their willingness and ability to apply this, together with technology solutions, to enhance the quality and speed of their reporting.
Partner, Latham & Watkins
Tools for Supporting the Financial Sector
RiskHorizon – The purpose made tool helps legal advisors, investors, finance professionals and deal makers to identify the material ESG risks and opportunities at an early stage of the deal cycle and take full account of the relevant issues throughout the transaction life cycle. It is a ground-breaking, cost-effective, web-based tool spanning millions of data points from more than 175 countries, covering 30+ global risks – economic, environmental, technical, social and geo-political.
Clean CO2 – a carbon management tool that allows companies and events to offset and reduce their carbon footprint. It accompanies users throughout the process of neutralising their company’s activities and greenhouse gas emissions, helping them to achieve carbon neutrality by investing in projects to reduce emissions, such as energy efficiency, renewable energies and carbon sinks.
Footprinter – is the leading technology platform for enterprise sustainability. Customers use Footprinter to expand the scope, reach and impact of their sustainability programs.
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Our Latest Thinking
TCFD: Exploring the Guidance for Private Equity
The UN Principles of Responsible Investment (PRI) launched a technical guide on implementing the Task Force on Climate-related Financial Disclosures (TCFD) for private equity general partners. The Guide sets out the actions that GPs can take to address the four-pillar framework of the recommendations proposed by the Task Force on Climate-related Financial Disclosures (TCFD).
Anthesis’ Financial Advisory Services
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Private Equity Firm Environmental Due Diligence and Permit Assessment
Anthesis conducted an Environmental Due Diligence (EDD) assessment for a portfolio of more than 50 construction material manufacturing sites for a private equity firm
Financial Services Organisation Modern Slavery Act Compliance
Anthesis carried out a four-stage approach to support a global financial services organisation compliance to the UK Modern Slavery Act
Institutional Investor ESG Risks Screening
Using the Anthesis-designed RiskHorizon™ tool, we followed three simple steps to perform an ESG screening for an institutional investor looking to invest in a chemicals company,