Act One: The Start
It is the exciting movements we are seeing in the financial sector that have given nourishment to our development thoughts. Driven by the Green Deal, European Taxonomy, ECB demands and new regulatory requirements, sustainability is taking on a new meaning in this area, becoming a key topic in finance as well. Banks are faced with the challenge of operationalising these developments, increasingly asking themselves what systems, through the strategies and choices they put in place, are sustained through the flow of “their” capital. We have spoken to several banks and what they have pointed out to us is the gap that exists at the moment: on the one hand the demands of Europe and on the other the difficulty they perceive in assessing clients and investments according to sustainability criteria – linked to a lack of specific know-how on the subject and a proven methodology.

Our ESG risk assessment tool aims to build a bridge and provide banks with the necessary information and background so that the process is not only successful, but also creates motivation and enthusiasm for all parties involved.

Act Two: The Adventure
We dedicated ourselves completely and intensively to the subject, which in its specifics is sometimes very complex, we talked to different people, analysed the studies, tried to translate everything into a solution. We made mistakes, we went back and started again. This led us to a structure and with concrete contents that we put on the table with various banking institutions.
The biggest challenge was (and still is) the dynamic that there is currently in the topic – every day new studies, task forces, opinions, interpretations emerge…

Another challenge was to manage the complexity, without leaving anything behind, but bringing it to a reasonable level to be able to manage the topic through a software tool.

An exciting journey for both the banks and the companies involved, and certainly a particularly important one for us. The hours (and days) invested and the opportunities for exchange with our strategic partners, but also the concrete work of developing the software were precious moments, which will accompany us in the next steps.

Act three: the “return”, but to the new one
We are now looking forward to entering into dialogue with as many institutions operating in the world of finance to understand how our ESG risk assessment tool can help them. In the meantime, we are working on the final steps of implementation on the software side. We believe that there will be no end to this work, as there should be: it will be a process of continuous deepening and integration of all the developments from the institutional side and the scientific side.

Günther Reifer, Founder and CEO – Terra Institute