Financial Services

Background

The bank had a strong corporate lending portfolio but limited internal capacity to evaluate environmental and social risks. As regulations evolved and standards such as the Green Asset Ratio came into effect, the bank risked falling behind peers on sustainable finance readiness.

Credit risk models excluded climate considerations, ESG scoring was inconsistent, and green lending was minimal. International investors began requesting ESG risk disclosures and due diligence protocols.

The bank’s leadership recognized the urgency of aligning with ICMA principles, integrating climate risks into its underwriting processes, and expanding its sustainable finance offerings—but lacked a roadmap to do so.

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Case Study

The Problem

The bank faced structural limitations driven by legacy risk models, fragmented sustainability data integration, and a lack of product innovation in green and sustainable finance.
These constraints significantly hindered its ability to respond to escalating investor expectations, comply with emerging regulatory frameworks, and address growing client demand for ESG-aligned lending solutions. In the absence of a comprehensive ESG risk assessment framework and alignment with sustainable finance taxonomies, the institution was increasingly exposed to reputational, compliance, and market risks.
Furthermore, the bank lacked capabilities for forward-looking scenario analysis and climate risk quantification—critical tools for assessing the financial implications of both transition and physical climate risks.
Developing climate heat-maps and embedding these insights into credit and portfolio decisions had become imperative for ensuring long-term resilience and regulatory readiness.
The bank also needs a sustainability managements system for good governance.

Our Solutions

To address these multidimensional challenges, we delivered an integrated transformation program encompassing Sustainable Finance, Risk Management, Strategy, and Governance advisory. Our engagement began with a diagnostic review of the bank’s existing credit risk architecture, ESG and sustainable finance data infrastructure, and product portfolio. We developed a customized roadmap to embed sustainability into the bank’s core risk framework, aligning methodologies with international standards.

Our team designed and implemented an ESG Risk Assessment Framework that integrates environmental and social criteria into credit evaluation, underwriting, and portfolio monitoring processes. This was supported by the development of bespoke climate risk scenario analyses, including transition and physical risk pathways, and the creation of sector-based climate risk heatmaps to inform portfolio steering and capital allocation.

Simultaneously, we worked with product development teams to structure new green and sustainability-linked loan offerings, in line with ICMA and LMA principles, enabling the bank to expand its sustainable finance portfolio while meeting investor and regulatory expectations.

To institutionalize these efforts, we supported the design of a Sustainability Management System (SMS), including governance architecture, policy frameworks, accountability mechanisms, and internal reporting protocols. This system ensures cross-departmental ownership, executive-level oversight, and consistent integration of ESG priorities across the organization. Together, these initiatives positioned the bank for regulatory alignment, improved investor confidence, and enhanced long-term resilience in a rapidly evolving financial landscape.

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