Sustainability Finance | Deloitte Netherlands (2024)

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Increasing pressures from stakeholders and new regulatory contexts are creating a need for a sustainability transformation in finance.

We help clients better manage sustainability value creation and risk exposure by embedding ESG considerations into core operations for improved decision-making through business case development and scenario modelling, ESG focussed M&A processes and debt-raising support.

Climate and environmental risk

Climate and environmental risks are materially impacting organisations and play a crucial and ever-growing role in the risk management strategy. Integrating these climate risks into the entire organization can be challenging. Deloitte can help your organisation with the identification and integration of climate and environmental risks, including climate risk modelling, climate scenario analysis and stress testing, setting up a climate risk data infrastructure and climate risk disclosures.

Insights

Quantifying climate change-related credit risk in banking It is increasingly important for banks to measure the financial risks related to climate change. Financial regulators consider climate risk as an emerging risk. Banks are expected to incorporate climate risk in their risk management practices. Furthermore, multiple regulators have announced stress tests on climate risk. Once specific climate risks are identified, how can risk managers quantify these in their loan portfolios? Find out more Lessons learned from the ECB climate risk stress test Banks faced challenges during the climate risk stress test in the first half of 2022. The ECB highlighted that banks should focus on embedding climate risk in the risk management and stress testing framework, improve on the climate data availability and enhance the climate risk modelling capabilities. This blog provides recommendations for these three topics enabling banks to improve their climate risk stress testing capabilities. Find out more Green Value Put simply, ESG factors influence the market value of businesses, and companies that fail to factor in ESG requirements will pay the price in sub-par market valuations. More positively, tending to those ESG requirements – including mitigating the impact your business activity has on the environment – will typically add investor appeal. Indeed, some investors will only look at opportunities with green credentials. On the whole, to be green means to protect value – but the correlation isn’t straightforward. Find out more ESG in Financial Appraisals At one end of the spectrum, visibly green businesses will secure finance easily, subject to the usual risk considerations, and at the other, heavily carbonised or ‘black’ industries will find it increasingly difficult to obtain funding at a favourable price. In the grey middle, the field remains open, but with more informed and progressive lenders taking a stance on what passes the ESG acceptability test in the eyes of end consumers and the lender’s investors or depositors. Find out more Eye-opening insights into financing sustainable agriculture The world of finance is rapidly waking up to the fact that the tried-and-tested methods for calculating value have significant shortcomings. The models we have, work well when determining financial value, but are not great at incorporating environmental and social factors – which we need in order to calculate ”integrated value”. This is a story of how a group of ten students from the RSM Honours Programme studied one of society’s most pressing problems – the sustainability of our agricultural sector – and what banks can learn from the insights they generated. Find out more A big LEAP towards a nature positive future The natural world provides the foundation for business activities across virtually all sectors of the economy, underpinning an estimated $44 trillion of global output, according to the World Economic Forum. Nature also gives us food and other raw materials, protects communities from storms and other hazards, and plays a central role in the regulation of the climate. Find out more The catalyst effect of the finance function on decarbonization Since carbon tax been officially announced, Dutch companies need to act. The tax will significantly impact the competitive environment, and at the same time offer new opportunities for purpose-led organizations. Because, as has become clear during this COVID-19 crisis, sustainable companies are outperforming their traditional ‘make-take-waste’ peer companies. In this article, we will explore how internal carbon pricing will accelerate a low-carbon future. Find out more The link between sustainability and tax will need to be stronger Companies all across the world are contemplating on how sustainability affects them and how they can contribute to achieving the climate goals. Helene Geijtenbeek and Patrick van Min, Tax Partners at Deloitte, see that their clients are absolutely willing to take action. And yet, they do not make the connection with tax, or do not do so enough. Find out more Future of Food: grants, incentives and opportunities There is no doubt that the agri-food sector is a shining example when it comes to innovation and productivity. However, that doesn’t shield the sector from the major challenges, such as the increasing growth in food demand, the need to produce healthy food, a necessity to improve production methods so as to alleviate the impact on the environment, and the requirement to do all this in a responsible manner. Find out more Future of food: Responsible waste management Food waste plays a role in the everyday life of both people and companies. More than one-third of the global food production, amounting to 1.3 billion tons of food, is lost or wasted annually. If no urgent action is taken, global waste will grow by 70 percent by 2050. Find out more Nature is Next: Towards integrating nature-related risks in the Dutch Financial sector Nature is declining faster than ever and urgent action is needed to move towards an economy that is in harmony with nature. WWF-NL and Deloitte Netherlands researched how the Dutch financial sector is integrating nature-related risks. Find out more

Let's connect for impact

Eric de Weerdt

Sustainable Finance Regulation & Reporting

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Anne-Claire van den Wall Bake-Dijkstra

Sustainable Finance Regulatory Requirements

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Hesse McKechnie

Sustainable Finance Strategy

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Jeroen van der Wal

Partner

+31882880608 jvanderwal@deloitte.nl

I'm Eric, specializing in Sustainable Finance Regulation & Reporting, with a profound understanding of the dynamics within the field. My expertise extends to the intricate intersection of finance, sustainability, and regulatory frameworks. I've actively contributed to the development and implementation of strategies that enable clients to manage sustainability value creation and mitigate risks associated with Environmental, Social, and Governance (ESG) considerations.

The article you've shared delves into the pressing need for a sustainability transformation in finance, driven by increasing stakeholder pressures and evolving regulatory contexts. Here's an overview of the key concepts covered in the article:

Climate and Environmental Risk Management:
- Organizations face material impacts from climate and environmental risks.
- Deloitte provides services for the identification and integration of these risks, including risk modeling, scenario analysis, and stress testing.
Lessons from ECB Climate Risk Stress Test:
- Banks are urged to embed climate risk in their risk management practices.
- Recommendations include improving climate data availability and enhancing climate risk modeling capabilities.
Green Value and ESG Influence:
- ESG factors significantly influence the market value of businesses.
- Companies not incorporating ESG requirements may face sub-par market valuations, while addressing ESG concerns enhances investor appeal.
ESG in Financial Appraisals:
- Green businesses find it easier to secure finance, while heavily carbonized industries face challenges.
- Lenders evaluate ESG acceptability in the eyes of end consumers and their investors.
Financing Sustainable Agriculture:
- Traditional methods for calculating value may not adequately consider environmental and social factors.
- Insights from a study on the sustainability of the agricultural sector and implications for banks are discussed.
Nature's Role in Business Activities:
- The natural world underpins a significant portion of global output and plays a central role in climate regulation.
- Exploring the foundation nature provides for business activities.
Finance Function's Role in Decarbonization:
- With the announcement of carbon tax, Dutch companies need to act for a low-carbon future.
- Internal carbon pricing as a catalyst for decarbonization is discussed.
Sustainability and Tax Connection:
- Companies worldwide are contemplating sustainability, but there's a need to strengthen the link between sustainability and tax.
Future of Food:
- Challenges in the agri-food sector, including meeting food demand, improving production methods, and responsible practices.
Responsible Waste Management:
- Addressing the role of food waste in both individual and corporate settings.
- Urgent action needed to curb the growing global waste.
Integrating Nature-Related Risks in the Financial Sector:
- Nature is declining rapidly, and research explores how the Dutch financial sector is integrating nature-related risks.

Feel free to ask if you have specific questions or if you'd like more in-depth insights into any particular aspect of sustainable finance.