Sustainability and ESG

Increasingly, consumers, investors and regulators expect a critical examination of the sustainability of companies and their activities. The scope for action ranges widely – from individual measures such as offsetting emissions to transforming the business model. How can companies use ESG (Environmental, Social and Governance) as an opportunity and meet growing demands?

Overview

The implications of ESG requirements for companies are manifold. Climate change has played a central role in recent years: Laws are accelerating technological change (e.g. automotive sector), consumers are increasingly opting for sustainable products and corporate environmental awareness is moving into the focus of the public – which includes investors, financiers, suppliers and employees.

At the same time, the number of laws, regulations and guidelines on transparency and sustainability is increasing, and companies must ensure compliance with these in a timely manner. Examples of this are, for example, the Supply Chain Act, which obliges companies to have a complex risk management system, or the EU taxonomy, which evaluates ecologically sustainable economic activities of companies via a classification system in order to promote sustainable investments. The relevance is also increasing in financing and on the capital markets: ESG ratings are booming and companies that have been identified as less sustainable are having increasing difficulties with financing or refinancing.

Against this background, it is essential to assess not only ESG risks but also potentials for companies - especially in the context of transformations or investments. A reflective ESG approach will be essential for the future competitiveness of companies in all sectors.

Services

ESG – a comprehensive approach

Questions for our team

What is an ESG program?

First of all, it is important to emphasize that we are not talking about “textbook measures”. It is a matter of acknowledging company-specific circumstances and bring in expertise regarding sector-specific regulation, market and competitive trends in order to be able to develop a target-oriented program of measures. To do this, we first identify the status quo: we analyze existing internal guidelines, initiate on-site investigations, and screen the supply chains. We work closely with the management from strategy development to project implementation.

What is the importance of social issues for ESG positioning?

A comprehensive reflection of the social issues affecting the company creates new opportunities – from addressing new customer groups to reducing of financially relevant reputational risks. New legal frameworks such as the Supply Chain Act extend corporate social responsibility to global supply chains. In the current market environment characterized by a shortage of skilled workers, the development of a differentiated, integrative corporate culture can become a competitive advantage by attracting the best employees and retaining them in the long term.

In what way does the issue also affect financiers and investors?

As society changes, so do the expectations of investors and financiers. Weaknesses in ESG positioning can quickly turn into significant financial risks – for example, if environmentally harmful behaviour by suppliers damages the company's reputation and thus its own sales. Our comprehensive analyses help to identify and reduce such neuralgic but sometimes hidden risks at an early stage – and thus increase the confidence of financiers and reduce credit default risks.

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