ESG Risk Assessment and Management Consulting

Environmental, Social and Governance, or ESG risks are being used increasingly by the investor community to assess the sustainability and risk profile of companies

ESG risk management can have a range of impacts on an organization’s financial performance and its underlying shareholder value. Multiple bodies of research point to a positive correlation between financial performance and strong corporate ESG risk management policies and practices.

ESG risks are real and so identifying and thereafter managing and mitigating them can help reduce costs. Conversely, failing to adopt a comprehensive ESG risk management approach to identify, report, manage and / or mitigate these ESG risks can lead to increased costs.

Equally, a well-considered strategic review of your organization’s ESG risk landscape can reap financial rewards through opportunity identification.

ESG Risks

Whereas Governance factors have been a feature of the corporate agenda for the longest time, it was in 2020 when we saw long standing Social issues such as racial and other inequalities being firmly thrust onto board and executive committee agendas around the world.

And on the Environmental front, we are witnessing planet earth on it’s accelerated path to increasingly intense climate-related events at the same time as our window of opportunity to remedy the situation and act to avoid widespread economic, physical and social dislocation and devastation is rapidly closing.

Environmental Risks

Environmental risk considerations include climate change mitigation and adaptation, green- house gas (GHG) emissions, water security, waste, pollution, resource utilization & depletion and deforestation.

ESG diagram Environmental Social Governance

Social Risks

Social risk considerations include inequalities, diversity & inclusion, employee relations, health & safety and working conditions.

Governance Risks

Governance risk considerations include executive remuneration, board diversity and structure, donations and political lobbying, and bribery and corruption.

Contact one of our experts today to discuss your
ESG Risks needs

Our ESG Risk Services

We provide a range of tailored ESG risk assessments and engagements including risk governance, risk strategy and climate-related analytics.

  • Helping your organization establish climate oversight and assessment responsibilities at the board and executive management levels.
  • Identifying macro-level risks and opportunities that can impact your organization by undertaking sector and scenario analyses.
  • Assessing and determining the climate component within pre-acquisition due diligence.
  • Identifying portfolio holdings with the highest exposure to climate change and conducting in-depth climate analysis on them.
  • Helping your organization develop and implement a process to identify, assess, and respond to climate-related risk and ensuring that climate-related risk owners and sustainability practitioners have been involved to ensure an effective risk identification process. 
  • Assist your organization in ensuring that all climate-related risks that may impact your organization’s strategic and operational plans are clearly identified, managed, and reported.
  • Assessment, development, and validation of your organization’s Net Zero target or Science Based Targets.
  • Carbon footprint analysis, including Scope 3 analytics.
  • Climate-related services including scenario analyses used to evaluate an organization’s economic and financial resilience under different climate circumstances. 
  • Supplier climate risk analysis

Our Strategy and Approach

We are a specialized consultancy bringing a unique combination of sustainability, risk management, global financial services, governance and audit expertise, built on a foundation of commercial expertise, independent thinking and pragmatism.

We provide best in class ESG thought leadership coupled with an in-depth command of key, strategic issues including:

Expertise

Expertise on the current global, macro-economic and geo-political landscape and its inter-connectedness with ESG and ESG risks.

Analytical Skills

A time-tested track record of superior analytical skills now being applied to climate risk analytics.

Thought Leadership

Thought leadership on target alignment and target setting (such as Net Zero or SBTi) for organizations.

Working Knowledge

Excellent working knowledge of the latest climate disclosure requirements such as TCFD

Frameworks

Strong understanding of global governance frameworks.

Our unique combination of sustainability, risk management and global financial services are reinforced and underpinned by our:

Focus on risks

Our focus is exclusively on ESG Risk Management.  We help organizations identify, measure, and manage ESG risks and undertake ESG risk mitigation. ESG risks and climate risks are now regarded as significant risks and thus need risk mitigation.

Whether you need a review of ESG Governance or ESG Risk Management or the development of an ESG Strategy that is seamlessly and tightly interwoven with your business strategy, our focus remains exclusively on ESG Risk Management and its components and related parts.

Experience

We understand the nature of risk, and the implications of action versus inaction, having spent more than three decades successfully leading and managing large, complex global businesses.

Having served on multiple boards in differing environments and settings: chairman, non-executive director, executive director, internal, external, financial services, energy, not-for-profit, regulated, regulatory; we bring a high level of knowledge and governance experience. 

This experience underpins our high-level of business expertise and judgement supported by a successful track-record spanning decades.

Understanding the risks

We understand that ESG risks can be transverse in nature and therefore are not always able to be neatly compartmentalized and assigned to a specific area or department for resolution.

We have a deep understanding of the spectrum of ESG risks: from physical risks (whether acute or chronic) to transition risks (whether they be regulatory, market driven, technological or reputational). We understand how assets can have exposure to and vulnerability to some physical risks.

We understand the interconnectedness of environmental, social and governance risks.

Foundational to our approach and focus is our independent thinking.

With our focus being entirely and exclusively on ESG Risk Management and its component and related parts, we provide guidance and recommendations by gaining a thorough understanding of your business and thereafter delivering to you specific, measurable and actionable recommendations that reflect the reality of your business environment and which are tightly aligned to your business needs and objectives.

ESG Risks Management Framework

We approach ESG Risk Management with a carefully considered assessment framework that is based on several, established and recognized authorities and ESG risk management frameworks. These include:​

The Financial Stability Board (FSB) established the TCFD to develop recommendations for more effective climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.

TCFD is committed to market transparency and stability and believes that better information will allow companies to incorporate climate-related risks and opportunities into their risk management and strategic planning processes.

The Network’s purpose is to help strengthen the global response required to meet the goals of the Paris agreement and to enhance the role of the financial system to manage risks and mobilize capital for green and low-carbon investments in the broader context of environmentally sustainable development. The Network defines and promotes best practices to be implemented within and outside of the Membership of the NGFS and conducts or commissions analytical work on green finance.

Principles for Responsible Investment (PRI) is a United Nations-supported international network of investors working together to implement its six aspirational principles, often referenced as “the Principles”.

The United Nations Environment Programme Finance Initiative (UNEPFI) is a global partnership established between the United Nations Environment Program and the financial sector, established in 1992.

The Sustainability Accounting Standards Board (SASB) is an independent nonprofit organization that sets standards to guide the disclosure of financially material sustainability information by companies to their investors. SASB Standards identify the subset of environmental, social, and governance (ESG) issues most relevant to financial performance in each of 77 industries.

The Sustainable Development Goals (SDGs) are an aggressive, but achievable group of objectives that, if attained, will make the world a much better place. The 17 goals seek to end poverty, ensure food security, make access to healthcare universal, protect the environment, and much more. Success will require meaningful engagement by charities, for-profit corporations and governments.

Entities, including businesses, governments and non-profits, face an evolving landscape of environmental, social and governance (ESG)-related risks that can impact their profitability, success and even survival. Given the unique impacts and dependencies of ESG-related risks, COSO and WBCSD have partnered to develop guidance to help entities better understand the full spectrum of these risks and to manage and disclose them effectively.

The combination of these judiciously blended ESG risk frameworks combined with a high level of expertise and commercial pragmatism provides a robust and very compelling approach to ESG risk mitigation and managing ESG risks within an organization.

ESG Risk Guard is ready to support you

Contact us to benefit from expertise, insights and knowledge into the ESG risks that can impact your organisation and be better positioned to address and manage these risks within an organization.

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