Sustainability consulting services

Managing sustainability risk for a business is complex. It impacts financial, operational, regulatory/compliance and reputational risk. New regulatory initiatives, such as Task Force on Climate-Related Financial Disclosures (TCFD) and SS3/19 for insurers, require businesses to ensure governance and risk management considerations are no longer a tick-box exercise but are addressed in an effective and proportionate manner that adds real value.

Our experienced risk team can help your organisation manage these risks by:

• training your people (including the Board) on the risks that exist, the regulatory requirements and how to manage them (monitor/report/mitigate)
• ensuring an appropriate level of risk governance of climate risk is in place in your organisation
• working with you to integrate climate risk into your risk management framework
• defining your climate risk appetite
• reviewing and challenging your targets and metrics and providing benchmarking against others in yours and other sectors
• providing assurance on your TCFD disclosures
• developing tools for you to identify and assess resilience to climate risks including stress and scenario testing
• working with you to understand how your firm will manage a climate risk rated reputational event

Wherever your organisation is on its risk management journey, our consultants will tailor our services to your requirements and offer a service designed around your business goals. We work with you to provide a best-in-class governance and risk management structure that will not only satisfy increasingly onerous requirements but will reassure your customers and clients that you are a sustainable business with a long-term future.

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Regulatory initiatives, such as Task Force on Climate-Related Financial Disclosures (TCFD) and The Pensions Regulator (TPR) new Single Code of Practice, schemes are now required to ensure that governance and risk management considerations are no longer a tick-box exercise but are addressed in an effective and proportionate manner which adds true value to your scheme and members.

These new regulations will expect schemes to understand, interpret and implement new requirements. We can support you in building a governance framework that not only addresses those requirements that your scheme may be subject to but will, more importantly, help you make effective decisions and manage risks.

Some areas that schemes will be expected to address include:

• implementing appropriate changes as required by new requirements
• reviewing the effectiveness of your Trustee Board
• implementing training requirements
• integration of ESG considerations into scheme activity
• documentation of governance activity and communication of benefits to scheme members

Wherever your scheme is on its governance and risk management journey, our consultants work with you to provide a best-in-class structure to not only satisfy these increasingly onerous requirements but reassure your members their future income is in safe hands.

Taskforce for Climate-Related Financial Disclosures (TCFD) aligned disclosures will become fully mandatory across the economy by 2025.

All organisations need to be gearing up for this reporting, with larger pension schemes, master trusts and listed companies already required to start issuing reports from 2022/3 and all other institutions following over the coming years.

TCFD is about more than disclosure, it is about the effective management of climate related risk and opportunities. Regardless of the complexity of the business or size of assets held, we are well placed to provide pragmatic, decision appropriate advice to help you.

Much of the focus of investment activity to date has been on asset portfolios and, in particular, re-alignment of equity portfolios. To take this limited focus is to both underestimate the potential impact and crucially to miss out on potential opportunities. Instead, we believe it is useful to consider an approach based around:

• Aim to do no harm – Put in place effective climate risk management
• Benefit from the opportunity – Be intentional around the changes taking place and the opportunities that are arising as a result
• Control the controllable – Make sure your climate governance allows you to monitor developments within your own scheme and in the wider market place

With that in mind, it is important that all aspects of the Integrated Risk Management Framework and the interaction between them are considered, including:

• Assets – As well as equity risk, climate factors can impact yields, credit ratings and currency so these are things that need to be considered
• Liabilities – The benefits paid by a scheme can be affected by climate-driven changes to inflation and mortality rates; the value placed on the liabilities can be affected by climate-driven changes to yields; the expenses of running a scheme can be affected by climate-driven operational risk
• Employer covenant – Whilst a scheme cannot diversify away employer covenant risk, employers should be engaged with to help understand how this risk interacts with asset and liability risk under different scenarios. In particular any climate-related risk attached to a contingent asset arrangement set up as part of a funding agreement should be considered.

Our people can assist you with all your investment requirements. In particular we will be releasing tools to assist you with testing how different climate scenarios might pose challenges to your journey plans. Our emphasis is on helping you take meaningful and timely actions that will make a real difference, rather than being seen as a compliance burden.

The data required to undertake carbon footprint and other sustainability analyses is rarely in one place. Data is needed from finance systems, HR systems, travel booking systems, and a host of external sources. These systems were typically not built for sustainability analysis purposes. The datasets involved can be large and incomplete.

Our expert data analytics team helps you collect, collate and use such data. We have expertise in building data warehouses that use translation programming to transform data for use in analytical engines. We have tools available that enable that data to be used in producing regulatory reporting, such as SECR, TCFD and gender pay, as well as enabling deeper analysis. All these tools come with data visualisation screens to enable quick yet detailed data interrogation and a deep understanding of your position.

Once you understand your current position, it is likely you will want to drive improvements. Our consultants are skilled in identifying where these are possible and how to drive change. For example, a large driver of carbon footprint for office-based firms is the commute that its employees undertake. We can help reduce this through implementation of Electric Vehicle and car sharing policies, providing incentivisation schemes for cycling or using public transport, and designing communication and engagement strategies.

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A majority of people in the UK want sustainability prioritised in economic recovery. Many need to feel that their employer takes sustainability seriously. With as much as a quarter of a business’s value being attributed to its reputation, it is important for all organisations to act now.

Our unique approach makes it easy for employers to support their corporate objectives by making the benefits they offer their people more sustainable. This goes beyond green initiatives alone and encompasses wellbeing, reducing inequalities and helping communities.

Through DrumRoll, our in-house creative agency, we produce refreshingly straightforward communications ‘written by real people, for real people’. We work with you to bring the subject of sustainability to life and help shape a better future for you, your employees and the environment.

Whether through gamification, real-time data or webinars and surveys, our approach to involving your employees in your sustainability journey can increase employee engagement and help drive better outcomes for everyone.

We use our research, analysis and experience to create tailored engagement approaches that put your employees at the heart of your journey. Rather than just telling people about your sustainability action plan, we want to involve them in the process to help them feel part of the plan, understanding the impact they can how now (and not necessarily in 20 years’ time) and increase engagement.

Our communications illustrate the benefits to employees, highlighting the improvements their small steps can make to their world – their families, their communities – all while seeing the progress on your longer journey, whether that be toward carbon neutrality or even being carbon negative.