ESG & Responsible Investment
The investment industry is in a maturing phase of its ESG & Responsible Investment journey, making a shift from voluntary to mandatory activity in many regions. Firms need to be able to adapt and respond quickly to remain compliant with evolving regulation, avoid greenwashing scrutiny, keep up with ever-growing client demand, and make the most of emerging ESG risks and opportunities.
How we work with clients
We have unrivalled experience and market insight to help our clients define and deliver their ESG & Responsible Investment strategy and operating model. We work across the value chain to support organisations to define and embed their chosen approach to ESG & Responsible Investment.
Our support includes:
ESG Strategy & Transformation
- Understand where you want to lead vs. just keep up, how you compare to your peer group and where the tactical and strategic wins are
- Define the capabilities you require across different functions, and develop the supporting business case
- Mobilise and manage your cross-functional ESG & RI change portfolio
ESG Regulatory Readiness
- Horizon scan for the regulatory requirements and voluntary code standards across jurisdictions
- Undertake detailed business impact assessments on the regulations and standards facing you and your clients, and form a tailored action plan
- Deliver change across your operating model to ensure initial regulatory readiness and ongoing compliance in BAU in a scalable and efficient way
Sustainability Risk & Greenwashing
- Understand the maturity of your enterprise risk framework to understand potential hotspots of unmonitored sustainability risk
- Develop a robust sustainability risk framework that integrates with the current enterprise risk approach, including defining roles of 3 Lines of Defence
- Conduct sustainability risk remediation to put in place enhanced sustainability risk monitoring with defined oversight responsibilities
Climate and Nature
- Understand the cross-functional impact of your climate and nature strategy, define the necessary capabilities and plan to deliver against climate and nature goals e.g., Net Zero and Biodiversity
- Meet climate regulations and commitments, including under TCFD, NZAMI and TNFD
- Put in place the climate and nature data & technology capabilities required across public, private and multi-manager investment strategies
Data, Technology & Client Reporting
- Define and deliver an integrated, end-to-end data model and technology architecture to support ESG integration and client disclosure
- Automate and standardise tools and processes supporting investment decision making and client reporting, making the most of 3rd party ESG data & tech providers
- Design and deliver market-leading ESG client reporting and disclosure
Why Alpha?
Our deep industry and implementation experience mean we are uniquely placed to help our clients navigate their ESG & Responsible Investment journey.
We specialise in investment management. Our industry focus means we understand ESG in the context of your business and how it impacts each of your functions.
We bring a pragmatic mindset and collaborative approach based on our wide-ranging, hands-on experience. Our recommendations are practical and designed to instill long-lasting, meaningful change with high levels of buy-in from business stakeholders.
What they say
The team at Alpha really helped us to understand the fundamental drivers of ESG within our business and how to leverage these while developing others
Head of Responsible Investment, Global Asset Manager
Q&A with Global ESG & Responsible Investment Practice Leadership: Vanessa Bingle & Troy Mortimer, UK and Pierre-Francois-Hue & Renaud Piastrelli, Continental Europe
What are the current ESG & RI priorities of investment firms?
Vanessa: “We have seen a massive shift in ESG activity from a commercial priority to a regulatory imperative, as seen by the amount of work undertaken by firms to ensure compliance by EU’s SFDR and the UK FCA’s climate-related disclosure requirements, to name two recent examples. Meanwhile, client demands continue to evolve, with varying ESG requests placed on managers under increasingly short timeframes.”
Renaud: “Data and technology remains a priority, with firms looking to implement strategic architectures that are scalable and adaptable to evolving client and regulator landscapes, rather than tactical, point-to-point solutions. Many firms are also concerned about accusations of greenwashing risk.”
What steps are firms taking to avoid greenwashing risk?
Troy: “Greenwashing risk is the risk that statements made publicly about a firm’s approach to integrating ESG in the investment process don’t match up to reality. This is a major concern for senior management at investment management firms, as well as a top priority at regulators around the world. We’re seeing firms undertake meaningful reviews of the landscape of sustainability risks across the firm, to understand where greenwashing risks may be concentrated.”
Renaud: “Additionally, we see firms move from informal to formal embedding of sustainability risks within key risk & governance forums. They are working hard to ensure that investment processes are well documented, and that there is robust evidence to back up claims made externally, which could swiftly be provided to clients, if asked.
Firms are also proactively reviewing their 1st and 2nd line governance and controls to ensure ongoing monitoring of their ESG commitments and avoid potential greenwashing risk.”
What steps are firms taking to ensure their Data & Technology meets their ESG ambitions?
Pierre-Francois: “We see investment firms focusing on three key areas of their ESG data & technology platforms, typically where the demand cannot be easily met by external providers:
1. Matching capabilities: matching several eternal ESG datasets with key internal datasets such as holdings
2. Private markets & Fund-of-Fund portfolios: enhancing capabilities to capture and analyse ESG characteristics in private markets and Fund-of-Fund portfolios
3. Operating model: building scalable solutions that are adaptable to changing regulatory and client demands, rather than solving single isolated pain points”
Vanessa: “Many firms have struggled with their ESG data & technology over the past c. 3 years – as the data & technology has moved from a custom-built add-on to a core requirement. Many firms are starting to define their strategic roadmap for ESG data & technology – to ensure that each regulatory solution built takes the organisation towards a coherent whole, rather than being a point-to-point, standalone solution. ESG data & technology budgets are under increasing scrutiny, and organisations are working hard to justify their development and ongoing data & technology budgets.”
