ESG Criteria - The Rise to Prominence In-House Course

26 April 2022
This case study shows how our training empowered the client's credit team with better Environmental, Social, and Governance (ESG) risks & impacts assessment, modelling, & financial model integration.

The client and the requirement:

This course was delivered to members from the following teams: Credit Risk, Japanese Credit Risk, Non-Japanese Credit Risk, Front Office - Origination, Non-Japanese – Analysis & Execution

The client asked for general training on the Environmental, Social, and Governance topic as well as sustainable finance. The requested topics were:

  • Regulatory environment (i.e. EBA guidelines, EU Taxonomy)
  • Transition risks of corporates and their business sectors
  • Disclosure of non-financial risk (GRI, TCFD etc) and how to assess these
  • ESG ratings
  • Incorporation of ESG to the credit analysis/decision process

The training:

Redcliffe Training designed a tailored, case-study lead course for the team of a leading bank focussing on the following learning objectives;

  • Empower the credit team to assess their clients’ ESG risks and impacts and to integrate ESG systematically into the corporate lending analysis
  • Help the credit team understand stakeholders’ expectations regarding ESG and the risks and opportunities these may pose to companies
  • Explain what ESG is and the different ways that transition risks manifest in a company’s bottom line
  • Provide an overview of how ESG is integrated into financial models used by lenders
  • Inform about the landscape of reporting initiatives and disclosure frameworks for sustainability and climate specifically

The course content included the following topics;

  • Background to ESG
    • What are Environmental, Social, and Governance (ESG) criteria?
    • The history of ESG & sustainability criteria
    • The ESG market today
    • The key drivers of ESG (Regulation, Clients, Investors & banks, Companies, Sustainability mega-trends)
  • ESG approaches and criteria
    • Characteristics of different ESG approaches in credit (Sustainable / Green Finance, ESG Integration, Thematic Investment, Impact Investing)
  • ESG factors/criteria
  • Key ESG frameworks, such as GRI, Sustainability Accounting Standards Board, CDP
  • Evaluation of different ESG rating systems and how capital providers use them to assess companies/assets (MSCI, Sustainalytics, ISS, Bloomberg, RepRisk)
  • ESG frameworks and reporting; key initiatives and how they support corporates and financial institutions understand and implement ESG (United Nations (UN) Global Compact, UN Environmental Program – Financial Institutions (UNEP-FI), Global Impact Investing Network, UN Sustainable Development Goals, PACTA)
  • ESG Reporting (Integrated reporting, TCFD)
  • Deep on the transition to a net-zero carbon economy
    • The science of climate
    • Definitions of net-zero carbon
    • The emission requirements of science
    • Climate regulation (EU Taxonomy, Stress tests and their implications)
  • Market and consumer trends regarding the net-zero transition
  • Risks related to climate change (Transition risk or Physical risk)
  • The role corporates can play in the transition to a net-zero carbon economy and related risks
  • Social and Governance
  • Governance and rising risks
    • Corruption and bribery
    • Tax transparency
    • Anti-competition
  • Corporate engagement

This tailored version of our ESG Criteria - The Rise to Prominence course was put together based on the specific training requirements of our banking firm client. To view the technical content or to enquire about running your own in-house version, click here.

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