As a leading financial centre in investments funds, and particularly in cross-border distribution and asset servicing, Luxembourg is the location of choice to support this trend. This leading position, combined with local expertise, is essential to attracting investors who are seeking performance, transparency and the high service quality related to such investments.

Following the evolution of sustainable finance related topics witnessed during the last few years, a rally has taken place towards Environmental, Social and Governance (ESG) products and ESG integration, with sustainable funds capturing a significant portion of inflows in Europe and some asset managers announcing that they will integrate ESG within their entire range of products. This trend is likely to further accelerate in the next two years due to the regulatory developments in Europe.

Virtually all stakeholders in the asset management landscape are attributing unprecedented focus to sustainability issues, and the AWM industry’s role in overcoming them. Both retail and institutional investor segments are prioritising non-financial impacts alongside financial returns, demonstrating

a strong proclivity for sustainable products and managers.

During the last 18 months, PwC Luxembourg has worked hard to reflect on and develop its own sustainability risk-assessment strategy. This led to a structured approach and transparent dashboarding on ESG risk. With this in mind, the firm felt that expanding the range of solutions proposed to PwC clients was key. In addition, integrating the financial performance on top of the ESG assessment will be key for portfolio managers going forward.

What Advantage GreenGate provides is a scoring methodology to companies and funds and a life-cycle assessment (LCA) diagnosis for companies’ products and communities. It also advises companies and communities on the assessment of their sustainable path.

Benjamin Gauthier, Risk Management and Regulatory Partner said:

“Due to the new regulatory context on ESG, it will be critical for the market players to assess ESG risk exposure, but also to connect it with financial performance. This is precisely what Advantage GreenGate has been working on for the last five years. As part of PwC’s ESG service offering, we felt that this was a great opportunity to collaborate with them to widen our sources of ESG risk assessment and make our clients benefit from their experience.”

  François Génaux, Advisory Leader at PwC Luxembourg said:

“In recent years, sustainability has gained traction and is increasingly recognised as a necessity, and no longer as a trend, something that PwC clearly recognises.  When looking at sustainability within the context of the financial services industry, PwC can help investors and companies navigate through the “Sustainable Finance maze” and most importantly turn the challenge into a business opportunity. We believe that with this new relationship we are strengthening our ESG service offering to PwC clients and taking another step in the right direction of Sustainable Finance.”

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Francesco Confuorti, CEO, Advantage GreenGate, comments:

“The joined business relationship of Advantage and PwC is a positive development as it enhances the opportunities and benefits for the financial community in helping firms and funds adjust to the definition of financial and non-financial indicators for compliance, risk management and investment. This supports all kinds of participants as it guides them to be attentive and assertive in their path to achieving sustainable investment goals which is beneficial to their investors, the community and the environment overall. Advantage GreenGate has developed a proprietary scoring algorithm based on a statistically robust, highly correlated combination of relevant ESG and financial indicators of company strength, credit quality and probability of default and will apply it to the analysis of funds and companies.”