ESG at HPC AG

The ESG approach, which encompasses environmental, social and governance aspects, is too important to be relegated to a buzzword. So we operationalize this approach for our customers:

The term ESG is booming. And not just because of the recent crises. The increase in importance is having an impact on markets, fashions, consumption and investment decisions. ESG is often defined very broadly and used as a synonym for sustainability.

The original meaning, however, is to highlight the risks that companies face with their business models and how to address them. The key measure of the credibility and success of ESG measures is their effectiveness. Complying with regulations such as the EU Taxonomy, Corporate Sustainability Reporting Directive (CSRD), German or European Supply Chain Act is the first step. But it should not stop there. Let’s take the example of a real estate developer. A property developer buys or develops real estate for commercial purposes. It is not uncommon for him to undertake both. This gives rise to various ESG risks. For example, environmental risks (ESRs) if the company uses materials such as concrete or steel whose production and processing consume a lot of resources – such as energy. This generates a lot of CO2. Potential natural hazards also need to be considered.

Social risks, on the other hand, occur when the supply chains of raw materials may not be free of child or forced labor. With regard to governance risks, the composition and background of management is relevant – for example, whether the age of managers is well mixed (young talent). If you invest in such a company and purchase its products or services, these risks should be taken into account. After all, any of these risks can lead to major financial losses or reputational damage. These risks are analyzed as part of an ESG analysis or assessment. ESG thus captures the potential risks to value and corresponding impacts on a company. With the help of a targeted materiality analysis, the relevant aspects are recorded and can be prioritized accordingly.

The HPC team has many years of experience working with science-based data. We support our clients on the path to greater sustainability because we understand the difficulties and possible solutions that arise when navigating the ESG risk landscape. That’s why we’ve developed an impact-driven business model for ourselves and, of course, our clients, based on managing risk and building resilience using accurate, real-time data to make sound business and financial decisions.

Feel free to contact us today for more information on the solutions available to you.

For more details, please contact Emmanuel Zinsu (HPC Frankfurt/Kriftel).