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Create value through your ESG transformation
Environmental, Social, and Governance or ‘ESG’ is a bigger disruptor than digital, driving the wedge between tomorrow’s leaders and laggards across performance, long-term value creation, risk exposure and volatility, and stakeholder benefits. Don’t take our word for it, have a look at MSCI that reports companies with higher ESG ratings generate high returns (26.9% higher gross returns for ACWI ESG leaders index), experienced lower risk and boasted less volatile earnings.1 Whereas, stakeholder benefits range from improved customer experience and retention, lower cost of capital, boosted productivity and talent retention, and increased credibility with governing bodies through transparent reporting.
Such wide-reaching benefits only result from companies getting their ESG transformation right across strategy, execution and reporting based on their stakeholder ecosystem and industry. There’s no time like the present to secure the future. Where will you stand?
[1] https://www.msci.com/esg-101-what-is-esg/esg-and-performance
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How we can help
Goodbye theory, hello action! Our goal is to empower leaders and companies to execute their ESG transformation journey. We bring together a passionate community of solvers from strategy, deals, people, tax, legal, assurance, reporting data and technology to help you integrate ESG into every aspect of your business.Whatever the starting point of your ESG journey, we want to be your trusted advisor to help you transform all dimensions of your business, including strategy, transformation and reporting for increased transparency:
1. Understand implications
ESG is on the agenda of all top executives these days but the question is how to start your journey and more importantly from where. From our experience we suggest our clients first take a step back and understand well the implication of this topic on their businesses. Thus, it's best to form a baseline by following both the outside-in and inside-out approach.
- Management workshop
- ESG readiness assessment
- Benchmarking
- Carbon footprint calculation
Management workshop
Before launching an ESG programme it's important to understand what it is, what is already in place today and where your organisation aspires to be. Thus, a discovery workshop with the top management helps assess the starting point and how to map the way forward.
ESG readiness assessment
The ESG regulatory space is constantly evolving. Thus, before thinking about ESG data and reporting. It is crucial to understand what regulations your organisation is in scope of and exactly what data is required. We use a data-driven approach with PwC’s tools such as the ESG Data Jumpstart Kit to help clients understand their regulatory reporting obligations and the related impacts on people, process data and technology.
Benchmarking
Adopt the outside-in approach to see what your peers are doing in the sustainability and ESG space across different metrics. This helps you to clearly understand the ESG maturity of the industry. We help our clients with both qualitative and qualitative benchmarking across a range of best-practice metrics.
Carbon footprint calculation
Carbon footprint or GHG footprint of a company is a significant measure of its impact on the environment. More and more regulations worldwide are asking for a full disclosure of Scope 1 and Scope 2 emissions. We help our clients perform both a rapid GHG footprint calculation and an in-depth one as per the GHG Protocol, a global corporate standard for carbon footprint measurement and reporting and Bilan Carbone® methodology.
2. Create a strategy led plan
Rather than view it as a compliance measure for regulatory requirements, or as a way to maintain the licence to operate, sustainability must be fully integrated into your company's ecosystem.To fully realise the potential of sustainability's impact on your business, you must develop and implement a future-proof business model.
- Stakeholder materiality assessment
- Sustainability strategy & business case
- Target Operating Model Design
- Transformation Roadmap
Stakeholder materiality assessment
Often, we see that investors, asset managers and businesses in general forget a key step before tackling their sustainability agenda - materiality assessment. We help our clients perform a data-driven Impact Materiality assessment to understand the impact your business has on its stakeholders. Now, with the EU CSRD introducing the Double Materiality which involves financial materiality on top of Impact Materiality, it can be quite confusing at times to navigate it. We help our clients perform a Double Materiality in line with regulatory guidelines.
Sustainability strategy & business case
Organisations face a challenging set of demands from their stakeholders to show tangible progress towards sustainability. They also face threats in the transition to a low-carbon economy and from the physical impacts of climate change. Thus, we help our clients to strategically position themselves within a low-carbon economy value chain with clear ambitions, targets and a business case.
Target Operating Model Design
Organisations that are outperforming their peers with the sustainability agenda are targeting the topic holistically. We help our clients define their operating model along four building blocks: Strategy, People, Process and Data & Tech. This approach helps them to understand and prioritise the activities that will have the biggest ESG and enterprise impact and help them develop a realistic transformation roadmap to achieve those outcomes.
Transformation Roadmap
Sustainability transformation involves almost all departments of an organisation and this means having a clear roadmap is imperative for its success. We have helped organisations draw up a transformation roadmap across the four building blocks, Strategy, People, Process and Data & Tech. with clear project management and governance.
3. Transform your business
To create impact through ESG, you’ll need to implement ESG principles across all aspects of your business including strategy, operations, reporting and tax. People and technology will need to work together so you can see more and act faster to make ESG-driven changes to your operations, value chain and entire organisation. Those organisations that are able to perform in terms of ESG are already outpacing underperformers when it comes to long-term value creation, cost of capital, risk exposure and attractiveness to customers and employees alike.
- Operations, processes, & controls
- People, culture & upskilling
- Technology, data, advanced analytics & AI
- Finance & performance management
Operations, processes, & controls
In order to integrate ESG within the DNA of the business it is important to look at the current operations, processes and controls and see how ESG-driven changes need to be integrated into everyday activities. We help our clients incorporate all three ESG dimensions in reporting systems, data collections and disclosure process and related controls.
People, culture & upskilling
Weaving ESG into company culture requires a simultaneous top-down and bottom-up approach. Employees want to be in the know, they want to upskill, they want to trust that their organisations are prioritising their needs as well as the environment and their communities. This is why we offer customised upskilling programmes that engage your workforce, empower them and finally, equip them to create impact in their roles.
Technology, data, advanced analytics & AI
Leveraging technology and data can accelerate a company’s ESG agenda. We help our clients in understanding their ESG data needs, existing data elements and sources and inturn choosing the best technology to fit their needs.
Finance & performance management
Finance leaders and the finance function of the future will be responsible for the integrated financial and non-financial reporting to satisfy regulators and investors while providing integrated ESG management reporting to drive strategic and sustainable decisions. Our multi-disciplinary team across advisory, assurance and tax can guide you end-to-end to transform your finance function across data, technology, process and people to meet internal and external reporting and performance expectations.
4. Report & refine for transparency
Get the trusted information you need to make sound decisions. Use proven tactics and smarter technologies to identify, measure and hold your business accountable to ESG requirements. Take a proactive approach to proving your commitment, to employees, customers, shareholders, suppliers and other stakeholders, using the right data, metrics and disclosures. Future reporting won’t just be about financials—it will also be about measures like people insights, intellectual capital, and social and environmental impacts.
- Reporting readiness assessment
- ESG certification & accreditations
- Develop ESG reporting
- Assurance
Reporting readiness assessment
Currently due to the lack of a standardised non-financial reporting framework, businesses are reporting as per multiple international guidelines and standards (GRI, SASB, IIRC, CDP etc). Additionally, the upcoming Corporate Sustainability Reporting Directive (CSRD) will require robust reporting. To deal with this we advise that our clients perform a reporting readiness assessment to assess their current state and uncover the missing data.
ESG certification & accreditations
ESG certifications and accreditations like EcoVadis, CDP, BCorp etc. are great quick-win for businesses to gain confidence of their stakeholders. The issue is determining which are the most suitable certification and accreditation for your business and then understating how to go about it. We help our clients help answer these questions with our support and industry expertise.
Develop ESG reporting
We support you in reporting scope definition, efficient data access and automation to ensure you comply and communicate with impact on all reporting obligations and reach benchmark levels on stakeholder communication. Stakeholders across the business spectrum see ESG reporting and metrics as important indicators of an organisation’s overall health and impact.
Assurance
Stakeholders across the business spectrum see ESG reporting and metrics as important indicators of an organisation’s overall health and impact. Additionally, the upcoming Corporate Sustainability Reporting Directive (CSRD) will require companies in scope of the Directive to obtain mandatory assurance. Through our Assurance services, we strengthen the trust and transparency of ESG reporting and deliver confidence to stakeholders that information is robust.
Leverage our data & technology, alliances and partnership ecosystem
We want to be your local trusted ESG transformation advisor, guiding you through the ESG transformation journey from strategy to execution to reporting. To do that, we leverage unique proprietary PwC products, innovative technology alliances and complimentary partnerships to bring you a unique end-to-end service offering that will execute your ESG transformation and propel your performance.
PwC has numerous joint business relationships with external firms, and we have specifically entered into enhanced Alliance relationships to drive unique ESG solutions. These Alliance relationships have strong brand recognition, with complementary products, skills and talents, and have a proven track record of working strategically with PwC.
SAP
Workiva
Microsoft
Salesforce
AWS
Workday
Oracle
DataIku
Galytix
Lifeware
PwC has developed digital tools and accelerators to help you deliver efficient, reliable, impactful and sustainable ESG outcomes. Our human-led, tech-powered approach can help you act in all stages of your ESG path: from reporting and disclosures, to climate risk assessments, governance processes, setting your strategic roadmap and more.
ESG Data Compass helps rapidly identify which regulatory and business frameworks you need to comply with, what data you need to report on and where you can find the data within you system landscape. It is the basis for our clients non-financial reporting transformation before identifying which tools, process and people dimensions need to be transformed.
ESG Gap Assessment tool helps accelerate the current state analysis of your ESG non-financial reporting capabilities across compliance, people, process and technology dimensions. It is the basis on which we then recommend your future ESG non-financial reporting state and operating model.
ESG Digital Perception tool gives you insight into the your stakeholders online perception of your ESG digital footprint, ranging from sustainability reports, articles, forums and social media chatter. We use this to provide you a unique insight into how effective your ESG communication, engagement and branding is with your stakeholders.
And many many more …
In everything we do, we believe in solving important business issues for our clients, end-to-end. We do that through collaborating, innovating, and going to market together with not only our wider PwC territories in EMEA and globally but also with complimentary and specialised ESG boutiques advisors and experts. We've developed strong partnerships with a number of local and regional partners to bring you a holistic end-to-end ESG transformation service offering that stretches across advisory, tax, assurance and industry specific ESG challenges and opportunities.
We're doing our own ESG work at PwC Luxembourg
Climate change is one of the most pressing problems facing our world today. It is in the interest of everyone that we see systemic change that averts climate catastrophe and unlocks the potential of green growth. At PwC, we believe the business community has a key role to play in making that happen. And we’re determined to play our part. That’s why we’re making a worldwide science-based commitment to reach net zero greenhouse gas emissions by 2030. At PwC Luxembourg we have aimed to deliver on our purpose by putting a Corporate Responsibility and Sustainability strategy in place. We’re committed to our corporate initiative, The New Equation, and we continue to build trust and deliver sustainable outcomes for all our stakeholders, including investors.
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Contact us
Frédéric Vonner
Advisory Partner, Sustainable Finance & Sustainability Leader, PwC Luxembourg
Tel: +352 49 48 48 4173
