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The ECOFACT Quarterly is a briefing on environmental and social risks DECEMBER 2019

REPORT relevant for the financial sector. This sample report includes the editorial, FOR MORE CLICK HERE excerpts from three tables, and a limited selection of 9 news items from the 41 items featured in the full report. For information on subscribing to the ECOFACT Quarterly, go to the last page. ISSUE 31

Editorial It’s All Change in 2020

One thing is certain: 2020 is going to see tremendous change in sustainable finance. This will apply first and foremost to any financial institution with business ties to the European Union (EU). You’ll also be surprised at how little people in compliance, product development, and even investment departments know about the imminent changes Editorial – unless they have a very strong ESG team. And even if they are up to date, it’s unlikely that they will have the necessary technical expertise and data. This is a huge opportunity for ESR/sustainability/ESG teams.

The two key drivers of change:

• On December 9, 2019, the EU published the new Regulation on Sustainability‐Related Disclosures in the Financial Services Sector.1 Our recent legal analysis of the package resulting from the EU action plan for sustainable finance shows that, depending on type, financial institutions are facing up to 300 action items.2 These apply to any financial International standards institution that has a branch or subsidiary in the EU, manages an EU-based product, is seeking to acquire clients in the EU, or is selling products to them.

By June 30, 2021, for example, financial market participants will have to publish information about how they integrate sustainability risks into their investment decision-making processes and investment or insurance advice. They will also High-risk sectors have to publish statements on how they take into account the principal adverse impacts3 on the environment and society resulting from their investment decisions – or explain why they do not.

• Equally importantly, the European Green Deal4 announced on December 11, 2019 finally provided us with an initial regulatory roadmap5 for the real economy in Europe. Late last year,6 we explained why it was difficult for the financial sector to act on climate risk as long as such roadmaps were not available: it makes it practically impossible to predict transition risk and assess new market opportunities available to clients or investee companies. Now it will be easier. Emerging risks

If you have the opportunity, support the investment arm of your institution in developing policies, due diligence and assessment processes, as well as reporting and disclosure frameworks. It will be a game changer and provide the basis for work that will affect other products and services in a second phase.

‘Happy New Year’ from the ECOFACT team and all the best for an exciting and busy 2020! Business case

Olivier Jaeggi, Gabriel Webber Ziero

1. Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (27 November 2019). On the same day, the EU also published Regulation (EU) 2019/2089 amending Regulation (EU) 2016/1011 as regards EU climate transition benchmarks, EU Paris-aligned benchmarks and

sustainability-related disclosures for benchmarks (27 November 2019). Peer approach

2. For further information, please contact one of our legal analysts at [email protected]

3. Please note that the concept of adverse impacts is closely aligned with how risk is used in the OECD Due Diligence Guidance for Responsible Business Conduct. In the words of the OECD, assessing “adverse impacts […] is an outward-facing approach to risk,” focusing on assessing the likelihood of adverse impacts on people, the environment and society that an enterprise may cause – and not about risk for the investor or the financial institution itself. The Regulation (EU) 2019/2088 explicitly states that “financial market participants and financial advisers should consider the due diligence guidance for responsible business conduct” developed by the OECD.

4. The European Green Deal: https://ec.europa.eu/info/sites/info/files/european-green-deal-communication_en.pdf New tools & databases 5. As part of the New Green Deal, the EU has announced that it will review all regulations in order to align them with its climate goals; it will also propose the first European climate law and launch a new circular economy action plan by March 2020.

6. https://www.ecofact.com/downloads/ECOFACT%20Quarterly%20Issue%2027.pdf About

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Editorial

ISSUE 20 MARCH 2017

Corporate Complicity

InternationalThe UN Guiding standards Principles on Business and Human Rights (UNGP) stipulates that there are three categories of business involvement that can impact on human rights. ISSUE 20 MARCH 2017

Updates on cross-sector environmental and social standards which might be relevant as a benchmark for risk assessments. Scope: keyA developments company may related cause toor thecontribute most important to harm international to human rights environmental through its and own social activities standards. (actions or omissions) or may be directly linked as a result of its business relationships with other parties.

High-risk sectors 1 In particular, the distinction between “contribution” and “directly linked” has recently been the subject of fierce debate.ISSUE 20 OECD incorporating industry feedback into Due Diligence Guidance It can be difficult to differentiate between the harm a company may “contribute to” and the harm that may be committed By the end of 2017, the Organisation for Economic Co-operation and Development (OECD) will release a final version of the by a third party, which a company is “directly linked” to. Although the company might not have caused or contributed to “Due Diligence Guidance for Responsible Business Conduct”. It reflects the information gathered during public consultations the harm itself, it could have been possible as a result of business relationships. Risk factor and is intended to be applicable Riskto all factor economic sectors. The paper is designed toRead act more as “practical (1) support”Read more and (2) explain the OECD GuidelinesJohn Ruggie, for Multinational UN Special RepresentativeEnterprises in a on plain Business language. & Human It’s made Rights, up has Readof twoproposed more documents: (3) criteria thetoRead distinguish Guidance more (4) itselfthese and two categories: Five African countries set fuel Subsidies for fossil fuel production a companionthe of extent useful to tips which and agood business practice. enabled, By conducting encouraged, and or documenting motivated human due diligence rights harm on operations, by another; supply the extent chains to which it Read more (5) import standards should be removed to help reduce Editorial and businesscould relationships, or should havecompanies known can about “identify, such harm;prevent the or quality mitigate of andany accountmitigating for steps how itactual has taken and potential to address adverse it. climate change With support fromimpacts UNEP, are Nigeria,addressed”. Benin, February 9, 2017. Various actors have also tried to further clarify this distinction. … while the EU establishes due Togo, Ghana, and the Ivory Coast have The working paper “Zombie Energy: Why we think it matters: The Due Diligence Guidance for Responsible Businessdiligence Conduct requirements will likely be used as parameter moved to ban the importWhy of fuel is the with distinction Climate so important? benefits of ending subsidies to guidance for future sector specific guidance. The most recent guidance published by the OECD was released in February 2017 sulphur content exceedingIt 50is essentialparts per because fossil each fuel category production” implies different discusses actions how and responsibilities.Alongside this, the EU has agreed to Editorial and concerns supply chains in the garment and footwear sector. million (ppm). The permitted levels of fossil fuels deposits would no longer be Offer for new The legal concept of complicity, and the related court cases, add anotherlegislation level of that complexity. by 2021 Complicity importers meansof tin, that a company

sulphur in importedRead diesel more will fall 3,000 profitable if the subsidies were removed. International standards knowingly contributed to another’s abuse of human rights (“aidingtungsten, and abetting”). tantalum, The goldconcept and of their complicity ores is highly ppm in some of the countries.relevant Although to business Theand Internationalhuman rights. Institute Most of forthe Sustainable cases brought againstmust conduct companies due havediligence concerned investigations alleged complicity.2 technically legal, cheap ‘dirty fuel’ has Development has used new modelling on their supply chain – including smelt- been shipped from Dutch Theports issue that is would that the toconcept include of the“contribution” estimated amountstrongly ofresembles complicity.ers and refiners. Both are The conceived move is intendedas an indirect to involvementEditorial be prohibited forComing use in thesoon:because EU – thethe companycoal, itself oil does and not gas actually that would carry outbecome the abuse. Expected Inprevent fact, by: indirect the mineral contribution trade from to human financing rights abuse can International standards maximum level in Europe hasgive beenrise to 10 allegations ppm uneconomical of complicity. to produce with the removal armed conflict. Human rights groups have High-risk sectors since 2009. DieselWorld emission Bank:However, standardsRevised most Social national andof Environmentalthe jurisdictions subsidies prohibit– Safeguards along withcomplicity the green when-Third commissioning (likelycommented final) a draftthatcrime byavailable and excluding a number the alsoimport allow of for criminal will assist African countriesliability to address when air business house enterprises gas emission are involved. reductions it would finished products containing the minerals pollution and the health and safety of the lead to. February 14, 2017. – as well as providing exemptions for many World BankAn Groupexample Environmental, of this is the ArabHealth, Bank and lawsuit Safety regardingGuidelines the terroristRevision attacks ongoing in Israel.

population and environment. The initiative companies – the agreement is “half-hearted” International standards

Why we think it matters: In May 2016, High-risk sectors also involves upgrading existingThe families national of the victims of terrorist attacks in Israel, the West Bankand and neglectful the Gaza of Strip other filed minerals several of lawsuits concern in US courts the G7 nations set a deadline for ending refineries to produce fuel toagainst these thestandards Jordan-based Arab Bank. Revised(such guidelines as cobalt). on vegetable February oil 3, production2016. and Emerging risks most fossil fuel subsidies, stating that by 2020. December 6, 2016. processing, offshore oil and gas development, The lawsuits allege thesupport bank forprovided coal, oil,financial and gas services should that end allowed by Why several we thinkPalestinian it matters: militant Many organizations US-based to engage in subscribers: petroleum refining, wind energy, perennial crop Read more (1) Readharmful more (2) activities. The2025. families However, claim thatinvestors the bank and knew,insurers or haveshould companies have known, have its accountsannounced were they being will used to pay the production, ports, harbors and terminals available families of suicide bombers. called on the G20 countries to phase out continue to apply due diligence on conflict High-risk sectors

fossil fuel subsidies as early as 2020, with Emerging risks In 2014, the jury found the bank liable for knowingly providing assistanceminerals, also to thestating Palestinian that they militant will consult group: Hamas. Risk factor OECD Due Diligence Guidanceaims for Responsibleto reduce climate Supply risk Chains and accelerateReleased in February 2017 Consequently, this meant they were complicit in the terrorist attacksthe that OECD took Due place Diligence between Guidance 2001 and for 2004. However, in the Garment and Footwear Sector Business case Report ordered by US CongressArab Bank finds reached ainvestment confidential in greensettlement alternatives. with the US claimantsResponsible ahead of the Supply trial. Chains of Minerals from fracking contaminates drinking water Conflict-Affected and High-Risk Areas. The concept of legal complicityRead more is complex andThe reportdepends on the jurisdiction and on whether the case is civil or criminal. OECD Due Diligence Guidance for Responsible Business Conduct End of 2017 The US Environmental Protection Agency Read more (1) Read more (2) It is probably no coincidence that the term contribution, insteadDraft of guidance complicity, available is used in Principle 13 of the UNGP. But Emerging risks we

(EPA) has released the final version of the Business case should keep in mind thatRegulation the commentary on Principle 17 of the UNGP emphasizes that the human rights due diligence report: “Hydraulic Fracturingprocess for Oil should and uncover risks of non-legal as well as legal complicity. Risk factor

Gas: Impacts from the Hydraulic Fracturing US making moves to weaken Peer approach Water Cycle on Drinking WaterWe are Resources”. currently working legislation on these on issues conflict and weminerals... welcome any requestsChild for labor further and information. impoverished Just farmersget in touch and we’ll The EPA has found that whenbe happy certain to help. are widespread in Madagascar’s On January 31, 2017, Michael Piwowar – the vanilla industry geological conditions are coupled with Simone Hutter and Gabriel Webber Ziero

Free Risk Business case US Securities and Exchange Commission certain management practices, groundwater A recent report has shown that retailers Chair – issued a statement explaining that Peer approach resources can become contaminated with he has directed his department to reconsider and exporters are exploiting already poor the oil and gas extraction chemicals. This compliance and if “additional relief” from Madagascar farmers and ignoring child includes during the injection,References: discharge, labor. Danwatch, a research and media New tools & databases 1 requirements is needed for companies. This storage, and clean-up of frackingSee, most recently,fluids. the second discussion paper released by the Thun Group in January 2017 that has sparked a number of critiques (https://business-humanrights.org/en/thun-group-of-banks-releases-new-discussion-paper-on-implications-of-un-guiding-principles-for-corporate-investment-banks).is in light of ongoing litigation concerning center, has found these businesses are Despite being able to identify factors that also profiting from the USD 192 million 2 See already in 2008: https://business-humanrights.org/sites/default/files/reports-and-materials/Ruggie-companion-report-15-May-2008.pdf,the Conflict Minerals Rule’s violation of the p. 9 Peer approach contribute to frequency or severity of impacts About First Amendment. Piwowar’s suggestion trade in Madagascan vanilla – about 80% to water, the EPA cites data gaps and of the spice sold on the global market is 2 that the Rule “undermines US national New tools & databases uncertainties in preventing the ability to security interests” could lead to legal from Madagascar. The executive director of “calculate or estimate the national frequency Danwatch says the investigation highlighted justification for a two-year halt to and/or Subscribe of impacts”. December 13, 2016. a full repeal of the Conflict Minerals Rule – that there is not sufficient traceability and About Read more The study a disclosure rule set in the 2010 Dodd-Frank transparency in supply chains. He said: 3 Assessment law. This stipulates that manufacturers “Several of the importers and retailers [we] must reveal to investors if minerals used have spoken with are not able to say which New tools & databases Subscribe in their products were sourced from the specific farms their vanilla comes from, Democratic Republic of Congo. and whether there is vanilla in their supply January 31, 2017. chain that has been produced by children”. About 5 December 8, 2016. Subscribe

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ISSUE 31 International standards

Updates on cross-sector environmental and social standards which might be relevant as a benchmark for risk assessments. Scope: key developments related to the most important international environmental and social standards.

New OECD Guidance for Banks on Due Diligence for Responsible Corporate Lending and Securities Underwriting The OECD’s new guidelines were developed together with a multi-stakeholder advisory group of more than 50 organizations and endorsed by 48 countries. The document defines expectations regarding due diligence for the business at the heart of the banking industry. It is the first document to broadly recognize environmental and social standards for corporate lending and underwriting transactions, although these transactions represent the vast majority of banking finance activities. The paper goes beyond the climate discussion, addressing the entire spectrum of the Sustainable Development Goals (SDGs). October 29, 2019. ECOFACT is proud to have contributed to these important guidelines. If you want to know more, please to not hesitate to contact us as at [email protected] or +41 44 350 60 60. Editorial

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Coming soon: Expected by: International standards ISO/WD 32210 Framework for sustainable finance: Under development. No time plan publicly available. Principles and guidance

High-risk sectors High-risk sectors

Developments relevant to six specific high-risk sectors, such as news on risk factors and trends, the relevant regulations, and best practices. The table below contains an update on controversies, and comments on the corresponding reputational risk for financial institutions.

Information based on RepRisk data Analysis based on RepRisk data, combined with insights gained in ECOFACT’s consulting practice

RepRisk runs the most comprehensive database The grades take into consideration the degree of reputational risk to financial institutions that is associated Emerging risks on environmental, social and governance (ESG) with investments in the subsectors mentioned. An “A“ indicates that transactions related to this topic present risk. RepRisk systematically collects and analyzes comparably low reputational risk, while an “E“ indicates high reputational risks. negative incidents, criticism, and controversies about companies and projects worldwide, and offers information on activities related to human rights violations, breaches of labor standards, corruption, environmental damage, and violations of international standards. www.reprisk.com

Level of controversies FI exposure ECOFACT summary ECOFACT

# of RepRisk risk incidents per quarter Share of news risk rating Business case and trend of the last three months† criticizing banks and / or insurers

The palm oil sector is associated with issues such as deforestation, threats to endangered species, and poor working conditions. While, “No Deforestation, Peat, Exploitation” (NDPE) commitments by RSPO members have been criticized for a lack of on-the-ground verification, FIs are urged to request NDPE commitments from their clients and to monitor 10% compliance. FIs lacking stringent palm oil policies or involved with companies that do not adhere to best practices face 42% considerable reputational risks. D

Coal-fired power remains highly controversial due to its impact on human health and the environment, and particularly Peer approach to its contribution to climate change. FIs involved in financing coal-fired power plants or with clients associated with the 7% coal industry are frequently targeted by NGOs. Increasing numbers of FIs are distancing themselves from coal-fired power 8% projects and companies. E

†The green / red arrows mean that the number of RepRisk risk incidents has fallen or risen by more than three risk incidents in the last three months, whereas the orange arrow means that the change in the number of RepRisk risk incidents in the last three months has been smaller than three. *Indicates a change in the ECOFACT risk rating compared to the previous quarter. New tools & databases About

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High-risk sectors

Risk factor evict residents” if their villages are on top Risk factor of mineral deposits. November 20, 2019. Nickle mining for electric vehicle RSPO forces consumer giants to batteries causing environmental Read more adopt green alternatives destruction in Indonesia The Roundtable on Sustainable Palm Oil With the popularity of electric vehicles driving Risk factor (RSPO) is set to penalize consumer goods demand for batteries to power them, millions makers who fail to transition to green Brazilian government seeks to allow of tons of nickel and its derivatives will be palm oil. Palm oil production is devastating mines on indigenous reserves required over the coming decades. Indonesia Southeast Asian forests, largely due to the is particularly rich in nickel deposits, which The Brazilian government has presented a slash-and-burn deforestation techniques Editorial are close to the surface and concentrated bill that will open the door to more mining that continue to cloak Singapore, Malaysia, at twice the levels found in other countries operations countrywide, including on and Indonesia in smog. Green growers say such as Australia. Environmental advocates indigenous lands. The Mines and Energy that their cleaner, but more expensive crop are warning that nickel mining in Indonesia ministry announced in July that it was has failed to sell, so RSPO has opted to is already negatively affecting livelihoods forming a working group charged with force consumer goods makers like Unilever and ocean ecosystems, and is resulting simplifying Brazil’s mineral prospecting and Nestle to buy larger quantities of green

in massive toxic slag piles. Continued process. Reflecting those efforts, this latest palm oil. RSPO members such as consumer International standards development of the industry could entail bill will legalize many of the small-scale, companies, retailers, traders, and palm irreparable damage to the environment and independent wildcat mines that are currently growers must now increase their sustainable further degradation of residents’ quality operating illegally. Brazil’s Bolsonaro-led purchases by 15 percent annually or face of life and health. There are currently 11 government has also sought to open fines and possible suspension. Large consumer nickel smelters around the country, 25 indigenous reserves to mining, logging, and firms have pledged to use green palm oil High-risk sectors mine-smelter combinations slated to open farming interests, a move that observers in their products, but warn that there by 2022, and thousands of nickel mines. say helped to feed the fires that swept are also sustainable supply reliability and The actual number is unknown, as many through the Amazon rainforest earlier this transportation issues to overcome. are illegal. The country is notorious for its year. October 3, 2019. October 16, 2019. corruption, and human rights campaigners Read more Read more are concerned that “police, army and Emerging risks government will continue to collaborate to

Emerging risks Business case Risks that may become material in the near future or are relevant when looking into a company’s business model, but are not yet considered as highly significant risks from a financial institution’s reputational risk perspective, or are not related to a high-risk sector.

Air pollution

Research links air pollution to aggressive behavior and violent crime Peer approach Analysis of three 2006–2013 US government data sets by American researchers revealed a same-day link between a rise in fine-particulate air pollution and violent crimes, the vast majority of which were assaults. If fine particulate matter levels (PM2.5) increased by 10 micrograms per cubic meter in a single day, violent crimes increased by 1.4 percent. If ozone exposure increased by 0.01 parts per million in one day, an increase of 0.97 percent in violent crime or a 1.15 percent increase in assault resulted. Further calculations determined that if daily PM2.5 levels could be reduced by 10 percent, more than USD 1.1 million in crime costs could be saved each year. Researchers checked for other possible explanations for this finding, such as weather, heat waves, precipitation, and other general factors at county

level. Air pollution levels have also been linked to increased levels of the stress hormone cortisol in the human brain. October 9, 2019. New tools & databases

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ISSUE 31 Business case

Information that underlines the business case for environmental and social risk management in financial institutions.

New Jersey tackles gun control in a unique way – leveraging relationships with banks and gun retailers Faced with federal inaction to address gun control in the US, as well as mass shootings and gun violence, the State of New Jersey has expanded (via executive order) its already rigorous firearms purchase background checks, placed restrictions on retailers selling to the state’s law enforcement agencies, and will require vendors and financial institutions to adopt its policies to maintain eligibility for state contracts. The governor’s announced plan was short on details but expected to include suggestions from gun control groups, including enhanced training for retail workers, electronic record-keeping requirements, and background check services for private gun sellers. The state claims that it pays USD 1 billion in bank fees annually and spent USD 70 million on firearms and supplies for law enforcement in the space of a few years, suggesting that it has significant clout to alter practices on a wider scale. The state is encouraging others to pursue similar tactics in other jurisdictions. September 10, 2019.

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Sector and issue policies adopted by insurers (A) indicates the number of insurers among the 9 Systematically Important Insurers which have adopted a policy, guideline, or commitment addressing the corresponding sector or issue for their investments. (B) indicates the number of insurers which have adopted a policy, guideline, or commitment addressing the corresponding sector or issue in underwriting. Only the sectors or issues covered by policies are included in the table.

Sector policies A B Issue policies A B Agriculture 2 1 Climate change 6 4 Palm oil 2 1 Agricultural commodities 2 1 Tobacco 3 2

This table includes the 9 global systemically important insurers (G-SIIs) according to the Financial Stability Board: Aegon N.V., Allianz SE, American International Group, Inc.,

Aviva plc, Axa S.A., MetLife, Inc., Ping An Insurance (Group) Company of China, Ltd., Prudential Financial, Inc., Prudential plc. Source: fsb.org Editorial

Sector and issue policies adopted by banks (C) indicates the number of banks among the 30 Systematically Important Financial Institutions which have adopted a policy, guideline, or commitment addressing the corresponding sector or issue and disclose its content. (D) indicates the number of banks which disclose that they have adopted a policy, guideline, or commitment, but do not disclose the corresponding content. International standards Sector policies C D Issue policies C D Agriculture (general) 8 5 Biodiversity 1 3 Biofuels 3 2 UNESCO World Heritage Sites 18 1

This table includes the 30 Systematically Important Financial Institutions (SIFIs) according to the Financial Stability Board: Agricultural Bank of China, Bank of High-risk sectors America, Bank of China, Bank of New York Mellon, Barclays, BNP Paribas, China Construction Bank, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Groupe Crédit Agricole, HSBC, Industrial and Commercial Bank of China Limited, ING Bank, JP Morgan Chase, Mitsubishi UFJ FG, Mizuho FG, Morgan Stanley, Nordea, Royal Bank of Canada, Royal Bank of Scotland, Santander, Société Générale, Standard Chartered, State Street, Sumitomo Mitsui FG, UBS, Unicredit Group, Wells Fargo. Source: fsb.org Emerging risks

New tools and databases

This section presents new tools and databases that can help to identify or manage environmental and social risks. Business case

PRI tool forecasts “forcible, abrupt” policy response to climate change, highlighting investor risk exposure The Inevitable Policy Response (IPR) tool is headed by the Principles for Responsible Investment (PRI) in partnership with Vivid Economics and Energy Transition Advisors. It predicts a global “torrent” of “forceful, abrupt, and disorderly” policy change as early as the mid-2020s, as governments attempt to respond to increasing impacts of climate change. Investors are warned against complacency and encouraged to act now to determine risks to their portfolios as “[t]he greater the delay in responding, the greater the potential Peer approach cost.” The IPR forecasting tool is promoted as a business planning case replacement for the International Energy Agency’s (IEA) New Policy Scenario (NPS) to be used by investors, corporates, and regulators. It will be continually updated to reflect developments, but the tool’s early predictions include peak coal around 2022, oil in 2028, and natural gas near 2040, and almost all the world’s electricity will be produced by renewables by 2050. September 24, 2019.

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About this report ISSUE 31

This briefing is tailored to the needs of individuals and teams in charge of assessing and controlling environmental and social risks in corporate banking, investment banking, and commercial insurance. It aims to provide an update on risks, standards, tools, and best practices that are relevant primarily from a reputational risk perspective.

The content is organized into four levels: each item of information is headed by a title which allows the reader to digest the report in less than five minutes. Subsequently, a brief abstract summarizes the key facts. Additionally, if appropriate, a short comment illustrates why this information might matter and, finally, a link to the original source allows the reader to drill down further into the subject.

Our research process consists of four steps: firstly, ECOFACT collects information from international newspapers and specialized periodicals. Secondly, the websites of the most relevant NGOs, international organizations, private and academic research centers, environmental and sustainability think-tanks, and government agencies are visited regularly. Thirdly, specialized newsletters to which we subscribe are screened, and finally, organizations in charge of international environmental and social standards are contacted.

Selection criteria for the content of the briefing: a) information on environmental and social risks that b) was published (in most Editorial cases) over the past quarter, and c) is relevant from the reputational risk perspective of a financial institution. The scope covers the ten principles of the UN Global Compact.

About ECOFACT

ECOFACT has addressed the risks and opportunities that environmental, social and governance issues present to the financial sector International standards since 1998. We work primarily for banks, insurers, institutional investors, and international standard-setters.

We help our clients to improve their understanding of credit, reputational, compliance and liability risks in the context of sustainability, ESG and responsible business conduct. High-risk sectors Due Diligence We assist our clients in designing processes and conducting due diligence: We provide solutions for issue monitoring, policy development, portfolio screening, individual risk assessment, and engagement services.

Research Products In addition to the ECOFACT Quarterly, ECOFACT also produces the Policy Outlook. The Policy Outlook covers regulatory change Emerging risks pertaining to ESG and corporate responsibility issues. It a monitoring and implementation package that consists of an online tool and provides access to a network of peers.

Knowledge Sharing Business case ECOFACT hosts three events that facilitate knowledge sharing among peers and experts: • The Policy Outlook Conference gives you the chance to join peers and experts from the fields of public policy, legal & compliance, corporate responsibility and sustainability in exploring how financial firms are addressing corporate responsibility regulations. • The Environmental and Social Risk (ESR) Roundtable provides an opportunity for peers to discuss the challenges that arise

as environmental and social issues are further integrated into financial institutions’ business with corporate clients. Peer approach • The Reputational Risk Management (RRM) Roundtable is a platform for dialog and knowledge sharing on common and best practices in reputational risk management in the financial sector. ECOFACT is a signatory to the United Nations Global Compact and the Principles for Responsible Investment, and a member of Swiss Sustainable Finance. New tools & databases About

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