ESG (environmental, social and governance) factors in investment decision-making have become mainstream. For financial institutions, from asset managers to banks and pension funds, ESG plays a key role in avoiding significant harm and contributing to sustainable development through thematic and impact investment. At the same time, increasing evidence points to a clear correlation between ESG performance and financial performance.
Sustainable finance has two imperatives:
- To improve the contribution of finance to sustainable and inclusive growth as well as the mitigation of climate change.
- To strengthen financial stability by incorporating environmental, social and governance (ESG) factors into investment decision-making.
Changes in societal expectations of the financial sector are driving demand for ESG and sustainable finance. Challenges faced by investors today include increased scrutiny on ESG reporting, emerging EU regulation on sustainable finance, lack of standardisation and a shift in the risk landscape to a more long-term perspective.
KPMG can assist you with:
- ESG strategy, governance, policy and process development
- Alignment with upcoming legislation, for example the EU Sustainable Finance Action Plan, including the EU Taxonomy
- Benchmark ESG performance against peers
- Support engagement and active ownership
- ESG reporting – develop, optimise and monitor ESG data and performance
- Report to ratings and indices (MSCI, FTSE, DJSI, Sustainalytics, etc.)
- Applying the Task Force on Climate-related Financial Disclosures (TCFD) recommendations
- Advise on green bond frameworks
Read more about ESG and Sustainable Finance: