We see the combination of a long term view and a client-centric business strategy to be a sustainable approach in times of trouble. Long-term value creation is critical for business performance, competitive advantage, mitigating risk and strengthening stakeholder relationships. See our firm’s response to this year’s challenges, how we keep serving our clients, and what’s our community engagement in these unprecedented times.
2020 a year of unexpected disruption 2021 a year of structural adaptation to the “new normal” but also a unique opportunity for Luxembourg to position itself as the EU frontrunner in building a sustainable economy
The past 12 months can be divided into the period before and the period after the COVID-19 pandemic. The market circumstances and related market actions and interactions with our clients could not have been more fundamentally impacted by a disruptive event which – in all honesty – was still widely ignored when we woke up on New Year's day, the first of 2020.
Contrary to previous years, which were very much characterised by incremental change, we have thus been facing a “new normal” situation on three complementary levels: (i) the macro-economic impacts of the COVID-19 pandemic, (ii) the related changes to the work environment and (iii) the changes to the market interaction with our clients.
In particular, the impacts on the work environment and on the market interaction are expected to continue as structural changes for the coming years. This implies significantly accelerated digital change, both within our organisation and at our clients, and as well a new people-management approach to endorse remote work and virtual team set-ups in the longer run. Clearly, the pandemic works here as a catalyst for digitalisation, automation and the development of new and innovative tech-enabled services at a faster pace.
PwC has managed the change to the “new normal” in a relatively smooth and immediate manner, capitalising on past investments in cloud-enabled technology, such as the Google suite of collaboration tools. From a business point of view, we qualify this new environment as an opportunity to engage differently with our clients and address different (new) needs and service proposals. These new needs articulate along the core competencies of PwC, such as providing compliance and change management services to our clients in the main business areas of Audit, Tax and Advisory. Specific points of attention we have noticed emerging with COVID-19 are related to new work organisations, cybersecurity, data management and analytics as well as client experience in a digital service set-up. Defining the right balance between digital tools and media channels,and the deep relationship building based on physical interactions with clients, will be the challenge for the forthcoming 12 months and beyond for both our clients and for PwC.
The disruptions due to the pandemic were not the only major impacts to our markets and client base. Significant geopolitical changes are ongoing in parallel, which have been shaping our clients’ business needs in 2020 and are even more impactful for 2021, such as a hard Brexit, the upcoming US elections and the China - Hong Kong conflict. All of these constitute both risks and opportunities that we need to manage as PwC, and for which we have as an ambition to provide our clients our best and most relevant advice.
Lastly, 2021 will be the year for Sustainable Finance in the EU. The EU action plan will start to formalise its compliance requirements with a first major milestone in March 2021 around the Sustainable Finance Disclosure Regulation. The consequences of the EU action plan are way beyond a pure compliance duty. The plan creates a level playing field between financial and non-financial (ESG) criteria to define financial products’ performance and disclosure standards. The response of the industry is far reaching and extends to:
For Luxembourg, the new development around ESG might be as important for our future as the transposition of the UCITS Directive in 1988. Beyond the mere implementation and application of these upcoming regulatory changes, they also offer Luxembourg the opportunity to position itself unequivocally as an EU frontrunner in building a sustainable economy. In seizing this major opportunity of the 21st century, it is our belief that an approach through a “stick” is not sufficient, but that a broad, sector-agnostic carrot is needed as well.
We, as PwC, have a responsibility to help and support these changes, which we fully endorse through our daily interactions with our clients, relevant business associations and the government.
Our financial numbers this year reflect a combination of certain parts of our business growing very fast (like most of our services provided in the Alternatives industry), certain parts of our business being at maturity (like certain tax reporting services provided for investment funds) and, last, but not least, some dampening impact that COVID-19 had in the last months of our financial year.Explore more
The services we provide are bundled across three Lines of Service: Assurance, Tax and Advisory, which are supported by our Internal Firm Services (Infrastructure, IT, Compliance, Marketing & Communications, Client Relationships & Sales, Market Research, Knowledge Management, to name a few of these support services).
Our approach to client feedback is all about enhancing the client experience by listening to them. Their voices do matter for us, and as a professional service firm, it is our duty to identify important problems our clients may face and to help solve them. If we do not have adequate communication with our clients, we are unable to fulfill this task, nor our firm’s purpose.
The COVID-19 pandemic has exacerbated existing societal problems from hunger to homelessness to access to quality healthcare and education. Now, more than ever, we must commit to helping those who are most vulnerable in our communities.