Green Finance

Responsible investment

Never before have institutional investors been more concerned about the sustainability of their investments and portfolios. Environmental, Social and Governance (ESG) matters are now a key component of the process of investment decision-making and portfolio management.

Better environmental, social and governance (ESG) management provides an opportunity for institutional investors to generate greater value for their portfolio companies, their investors, and society at large. We believe that not only are there clear benefits of better ESG management, but that it is possible for this value to be quantified and communicated to investors, acquiring parties, and other stakeholders.

Our services

PwC offers you an experienced team of ESG experts who will provide you with end-to-end assistance throughout the entire transaction lifecycle. Stay one step ahead of your competitors. Given the ever-rising expectations of the market and regulators with regard to sustainability, it is crucial to build trust, cut costs and realise value in transactions. PwC can assist corporates as well as private equity firms in this process.

Deals Service advice for Corporates (M&A)

PwC assists on transactions on the buyer and the seller side, for instance with assessing a target based on ESG due diligence, with integrating the target into the buyer's sustainability strategy and with defining, measuring and reporting KPIs. PwC's advisory services also cover capital markets transactions relating to spin-offs and carve-outs.

Deals advice for Private Equity firms

PwC offers advice at the level of General Partner (GP), Limited Partner (LP) and the portfolio – starting with positioning for a sustainable future and selecting targets, through to ESG due diligence for a final offer. PwC also assists private equity firms in setting sustainability goals, defining KPIs and measuring, steering and reporting them. PwC can also help them develop an ESG profile for the portfolio companies with a view to value-enhancing exit readiness.

Risk Assurance advice on embedding ESG risks in enterprise and business stream level Risk Management frameworks

PwC assists on improving existing risk management frameworks and implementing new solutions for including and monitoring climate change, environmental, social and governance risks in your credit or investment decisions, risk reporting and disclosures.

Sustainable finance

Traditional and innovative new funding sources are increasingly prioritising organisations and projects that focus on climate and social considerations. This is a key driver in financing and realising the transformation to a sustainable economy. Opportunities exist for business and governments to deploy and capture those resources to make a positive impact.

Sustainable finance means that in the future, capital will flow towards more sustainable investments.

This vision will be realised by making changes to MiDIF II and the Insurance Distribution Directive.

Only those companies which take a holistic approach will be able to stand out.

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Our services

Our pillars to be compliant with Sustainable Finance:

Regulation monitoring

Given the green regulatory tsunami, there is an inherent risk of missing out on critical topics or taking required actions too late. PwC provide  a comprehensive overview of the latest regulatory developments in various jurisdictions globally, including impact assessments and recommended actions.

Strategic Regulatory Gap Analysis

Adapting to the constantly changing sustainable finance regulatory landscape and being compliant is key for financial institutions. In order to implement the various new requirements, institutions must be aware of the required changes. Therefore, we offer to conduct Regulatory Gap Analysis comparing status quo and the changes required by law as well as the specific impact of regulatory changes on organisations. By analysing the regulatory gap, we lay the foundations for all of the next steps (e.g. implementation).

Regulatory Transformation

The implementation of the many new regulatory requirements for Sustainable Finance is a highly challenging task for financial institutions, requiring sustainable finance regulation expertise, in-depth understanding of the business requirements and careful planning with consideration of all relevant aspects. We accompany our clients’ strategic regulatory transformation, providing an integrated approach that aligns the regulatory business requirements with the institution’s specific and strategic priorities complemented by excellent regulatory and market expertise in the field.

Risk management and Control framework

Sustainability risk management is one of the central pillars of the new regulatory and market developments in Sustainable Finance and is one of the most challenging topics for financial institutions in relation to sustainability. We support our clients in designing an ESG Risk Management and Control Framework for the effective management of ESG risks throughout their organisation.

Corporate governance structure

With increasing regulatory and market pressure on sustainable finance, financial institutions need a strong and efficient corporate governance structure in relation to sustainability. We help you define the sustainability structure that best suits your needs and ambitions.

ESG Rating Methodology

The new sustainability-related regulatory requirements put significant pressure on financial institutions to find the best suitable solutions for their business. This includes exploring the opportunity to use their own ESG rating methodologies to comply with the requirements, as well as providing added value to their clients. We support you with this opportunity.

EU-SFDR (Sustainable Finance Disclosure Regulation) disclosure

The EU-SFDR obligates you as a financial market participant to disclose to clients and investors how green your financial products are. Moreover, it stipulates that you must disclose how sustainability risks are integrated into the provision of services, for example, portfolio management and investment advice. Under the EU-SFDR, you must classify your financial products into one of three categories: mainstream, light green or dark green. Additionally, it is required that you carry out a due diligence process to consider the “principal adverse impacts”.

EU Taxonomy portfolio assessment

You are required to carry out an alignment assessment of your portfolio against the EU-Taxonomy, which defines which economic activities of your underlying investments (companies and projects) are considered as sustainable. By doing so, you are allowed to brand your investments as sustainable. The EU-Taxonomy fights greenwashing and improves transparency for sustainable investments.

Climate risk reporting (Assessment of climate risks (TCFD))

Correctly assessing and evaluating climate risks is key to protecting your company value. Therefore, a third-party review of your integrated climate risk framework reduces the risk of being blindsided by any climate risks you have not yet considered and ensures compliance regulatory reporting. Moreover, we are seeing a shift whereby regulators are transmitting current soft laws into strict regulations that need to be adhered to.

Contact us

Anita Hatta

Anita Hatta

Partner | ESG Assurance Services, PwC Hungary

Dr. Barbara Koncz

Dr. Barbara Koncz

Partner | Sustainable tax and subsidies, PwC Hungary

Gábor Kovács

Gábor Kovács

Senior Manager | ESG, PwC Hungary

Rita Szalay

Rita Szalay

Senior Manager | ESG, PwC Hungary

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