ESG and SUSTAINABILITY

Amdeya has best-in-class global expertise in advising banks and companies on achieving Environmental, Social and Governance (ESG) Goals. Amdeya advises banks and companies on ESG and Sustainability in one or all of the following areas:

1. Preparation of ESG plans. This includes the choice of ESG elements which are “material” to the bank or company,
2. Assessment and monitoring of implementation of ESG plans, and how these can be developed as needed,
3. Preparation of ESG reports/disclosures which would reflect ESG plans and their implementation,
4. Structuring of ESG linkages for issuers of ESG-linked financial instruments (whether these are capital or debt issues),
5. Verification of, and providing independent third party assurance of the ESG reports of banks and companies, and the labeling of ESG products as “green”, “blue”, and/or “social”. This would avoid “greenwashing”, and is a requirement by many investors (and regulators),
6. Assessment of projects from E and S standpoints,
7. Providing digital solutions for some aspects of ESG Data Management, and/or ESG Data Reporting,
8. Assessment of energy development projects from ESG perspective (with MiQ, and/or EO100 certifications, if needed),
9. Help in “capacity-building” in ESG. This would be in assessing ESG skills needed, and providing necessary advice/training to build the ESG-skills across the organization,
10. Advice on the latest ESG regulatory requirements and how to meet them,
11. Advice on the latest developments on global ESG “standards”. 

Amdeya has carried out a comprehensive survey of ESG planning and reporting in more than 700 banks in 41 countries. All banks in MENA and Turkey were surveyed. Moreover, around three hundred banks surveyed were in Africa, Central Asia, Latin America, and South East Asia.  The Amdeya ESG survey found out that only a third of the banks in the emerging countries have ESG/Sustainability reports. The banks that have ESG reports are also mostly the larger banks in these countries. The survey moreover found out that most banks plan to have ESG plans and reports in five years time. 

Amdeya recognizes that ESG is still in a developing stage, especially in the Emerging Markets. Most banks in the emerging markets actually already cover many of the elements of ESG. They however need to plan these better, make them more comprehensive, and report on them. It would not take a major effort for them to report on ESG, as the larger banks in the emerging markets are already doing. The banks and companies in the emerging markets would moreover find that ESG is good for business.  

The regulators in the emerging markets are also likely to start demanding that their banks report on some elements of ESG, and on verification of ESG “labeling” of financial products, and ESG bank reports.   

The ESG reports of banks and companies would also be more credible if there is independent assurance of what is being reported about ESG activities and products. Some of these products, including bonds, have been recently labeled “green”, “blue”, or “social”. This labeling needs to be verified, to avoid the risk of “greenwashing”. ESG, and sustainability reports by the largest international banks are now independently verified in order to provide assurance to their many stakeholders.  

Amdeya believes that the way-forward for banks and companies in the emerging countries is to have a “balanced approach” to ESG. Their ESG reports need to cover several elements, in addition to the very important climate-related issues. This is because there are many ESG components that are important for the success of banks and companies in the region. These include good governance, health, financial inclusion, gender equality, water availability, and education among others. The generally accepted approach is to select important elements in ESG that are “material” to a bank or a company which it would pursue and report on.  

The future trends point clearly that banks and companies, especially in the emerging markets, need to give increasing attention to ESG in their business. It is highly likely that the more successful banks and companies would be those that factor in ESG in their plans, and report on these in a structured manner, on an annual verifiable basis.  

For more information on how Amdeya can help in providing ESG and Sustainability advice, you can contact ESG@amdeya.com.