Our client, an Asset Management arm of a global universal bank, identified several projects to support their ambition to be a leader on ESG responsible investment, as part a multi-year transformation program. The setup and implementation of a CRO dashboard for alternative investments, covering all risk categories including ESG, was one of the key initiatives of this program.
Historically, Europe has led the way on ESG assets as well as serving as a global barometer, but the US is catching up with 40% market growth over the past few years and now accounts for $17 trillion, so nearly half of the global $35 trillion ESG assets under management.
As the ESG agenda continues to gain prominence, with global ESG assets expected to grow to $53 trillion by 2025*, there is an increasing demand from the upper management to have a risk dashboard that can provide a global overview of the risk situation within asset management. This requirement is also driven by the evolution of regulation that requires further transparency to identify ESG risks.
Within eight months, Capco delivered the CRO dashboard, from stakeholder interviews and initial analysis, through to mapping datasets, identifying risk metrics and development of a dedicated ESG-risks part for alternative investments (private equity, hedge fund, real estate, private debt and infrastructure debt).
The main challenges came from data availability and quality. To address, the project team assessed all IT tools used by the investment team within the alternative investments business. At the end of the project, Capco global ESG team also delivered ESG workshops for the client.
Capco’s team produced an agile automated risk dashboard for upper senior management to identify key risk indicators as a single global view. All data sources were documented, with the centralized development effort ensuring reduced local implementation costs.