The widely endorsed “Sustainable Development Goals” (SDG) by financial institutions are an important milestone in achieving environmental, social and governance (ESG) progress.
It is no longer sufficient for financial institutions to declare their alignment with SDG. The stakeholders of pension funds, insurance companies and banks require a product or service that is inextricably and explicitly linked with how we, as a society, are going to cope with the upcoming transition. Put it simply, the stakeholders require SDG goals to be a core integral part of the product.
Regulation is catching up with the demands from society, as from 2021, the new EU Taxonomy will be playing a major role in the transparency towards this agenda. Building SDG into the processes as an integral part can take more than one form. Financial institutions can:
Achieving SDG while maintaining the financial performance requires a forward-looking approach in this transition.
Reliance on historical patterns can no longer be taken for granted, not least because the very structure of the economy is undergoing a rapid and seismic change.
A forward-looking approach incorporating SDG must be used in all activities:
LINKS Analytics, Innorbis and Triple A – Risk Finance have jointly developed a proposition to support this forward-looking approach required to integrate SDG in the investment policy and process.
Goals and assumptions
Strategic session to support the board in formulating a view and beliefs on SDG
Strategic Investment plan
Implementation and Outsourcing
Monitoring and Execution
Evaluation and Adjustment
Regular evaluation of SDG performance and adjustments to the strategic investment plan if required.
Innorbis provides accurate and reliable measurement of the current progress of companies and institutions with respect to SDG and is able to report on EU taxonomy valuation and helps being compliant towards the new regulation for reporting purposes and disclosures
Using its proprietary Mira Agent-Based Modelling framework, LINKS Analytics provides the translation of SDG data into expected asset class returns and the future macroeconomic environment.
At the strategic level, the alliance provides institutional investors with forward-looking scenarios that take into account transition pathways. The scenarios (including the base case scenario) can be tailor-made based on client views and expectations. This provides seamless integration of ESG related risks into forward-looking analyses; such as ALM and ORSA calculations done by Triple A – Risk Finance.
Companies, institutions, and countries are monitored using approaches that can measure the behavior and realized progress based on open source sustainability measurement units.
The technique measures real progress and is not a normative tool for ranking companies or institutions. By measuring the real progress, it is possible to capture the real transition value of companies and institutions:
The platform enables institutions to go beyond the dialogue phase and contribute to the actual realization of the SDG and sustainable agenda through targeted investments. Main characteristics of the technology are:
Our solution offers you the necessary tools to integrate SDG into your entire investment cycle and take care of all your worries with respect to SDG and investing. Together we will be able to make the world a better place.
Do our themes appeal to you and is our culture exactly what you are looking for? Take a look at our vacancies. We are always looking for talent!
Understanding financial risks is a complex matter. We lay the foundations for your strategy and help you comply with laws and regulations.
Please contact Ridzert van der Zee
© 2023 AAA Riskfinance. All rights reserved.