Industries - Finance

Contents:

Driving towards a Sustainable Future

In order to thrive in the contemporary landscape, financial institutions must transcend mere adherence to expectations. Our financial services advisory teams collaborate with global financial institutions to facilitate genuine impact and drive positive social change.

Sustainable finance entails the integration of ESG considerationsinto financial planning and investment decisions. Financial institutions must contemplate the incorporation of ESG considerations into their financial services strategy, envision a digital future, and enhance risk mitigation processes to achieve excellence.

Metsims boasts strategic expertise, technical proficiency, and innovative thinking. Anchored in robust relationships within the financial sector and cross-disciplinary insights across various sectors, we integrate best practices that resonate in global markets. Our comprehensive range of services encompasses environmental analysis, enabling financial sector companies to prioritize sustainability. Within our sustainable finance practice, we leverage substantial experience, seamlessly integrating both climate and financial approaches.

Sustainable finance involves integrating ESG considerations into financial planning and investment decisions. Financial institutions must contemplate the incorporation of ESG considerations into their financial services strategy, envision a digital future, and enhance risk mitigation processes to achieve excellence.

Challenges, Risks, and Opportunities in the Sector

The financial industry is undergoing an extensive sustainability journey that spans from individual investors to development banks. Risks and challenges inherent in this journey also present numerous opportunities for growth and positive impact.

Addressing financed emissions is crucial for financial institutions because they indirectly contribute to greenhouse gas emissions. While financial institutions may not directly cause emissions, they often fund projects that involve greenhouse gas-intensive activities, such as fossil fuel extraction and transportation. Therefore, it is imperative for financial institutions to actively monitor and measure the indirect emissions resulting from their financing activities, particularly investments in high-emitting industries. Once these emissions are identified, financial institutions can develop strategies to control and reduce them, which may involve investing in renewable energy projects or supporting energy efficiency measures. By proactively addressing financed emissions, financial institutions can play a pivotal role in advancing the transition to a low-carbon economy and contribute significantly to mitigating the impacts of climate change.

Financial institutions must proactively manage environmental and social risks associated with their investments and lending activities. This encompasses the thorough assessment of risks related to climate change, biodiversity loss, human rights violations, and other environmental and social issues.

There exists a risk of greenwashing in the financial sector, where institutions may make claims about their sustainability performance without substantive actions or meaningful metrics to support those assertions. It is imperative for financial institutions to prioritize transparency in communicating their sustainability performance and utilize credible metrics to accurately measure progress.

Presently, there is a lack of standardization in the reporting and measurement of sustainability data. This absence of uniformity poses a challenge for financial institutions seeking to compare sustainability performance across different companies and sectors.

Financial institutions frequently prioritize short-term returns, potentially resulting in investments that emphasize immediate gains rather than long-term sustainability. It is crucial for financial institutions to develop investment strategies that strike a balance between short-term and long-term considerations.

There is a limited availability of sustainable investment opportunities, particularly in emerging markets. Financial institutions need to collaborate with companies and governments to develop sustainable investment opportunities that support the transition to a low-carbon economy.

What Can We Do Together?

Numerous studies can be conducted on product sustainability and corporate sustainability within the financial sector, an industry where Metsims boasts nearly 20 years of experience We stand prepared to accompany you on your sustainability journey, leveraging our extensive experience. Our capabilities include calculating financed emissions, stress-testing diverse climate scenarios, establishing frameworks for green/sustainable financial products, developing project-based Key Performance Indicators (KPIs), and crafting sustainability strategies, business models, and action plans. Explore our competencies in this field and engage with our experts!