ESG Strategy Consulting

More than ever before, the volatility and fragility of global interdependent systems have been made apparent by climate change and increasing natural hazards. Businesses across the globe are facing serious threats from climate change. Physical risks associated with climate change include asset loss, service disruption and poor business operations, all of which lead to a multitude of cascading transitional, reputational and liability risks. Therefore, businesses must act in a seamless, coordinated and productive fashion to have a strategic edge over whatever climate change holds for the future.

We at PwC, can help you identify the possible implications of climate change and disasters, evaluate the priority actions needed to adapt to and reduce future climate and disaster risks, make decisions and investment choices based on hazard vulnerabilities, risks and exposures, and enhance your future resilience and agility.

Safeguarding your needs: Our climate resiliency value offerings

PwC’s climate resilience advisory helps you create a panoramic view of your unique risk landscape, so you can act boldly and purposefully. We work with diverse clients ranging from public, private and financial sectors to ensure our recommended solutions have a broad spectrum of applicability, in order to offer the best protection for people and the planet.

• Disaster and climate risk resilience: Our community of solvers works with clients to recommend location-specific adaptation and mitigation actions for various economic sectors to ensure systems’ resilience at scale and safeguard businesses and governments from the ever-intensifying effects of climate change, such as rise in sea levels, floods, heatwaves, droughts and landslides. Our experts can help you conduct climate risk assessments to identify, measure and act on your hazard vulnerabilities, risks and exposures. We have the analytical skills to map a range of portfolio-level climate risks, and the resilience experience to turn risks into actionable insights to deal with various disaster and climate scenarios. Our cutting-edge climate risk modelling and analytics tools will assist you in generating detailed and granular information on climate risks using IPCC and globally reliable hazard data.
  
• Nature-positive solutions: At PwC, we are constantly leveraging relationships and interests centred around environmental issues to enable businesses and governments to respond to the rising climate-induced losses and damages. We are helping clients with nature-positive urban transformations to help mitigate climate change impacts. Nature positive is the foundation for good governance, long-term stable societies and healthy economies, and is a new business model based on regeneration, resilience and recirculation (World Economic Forum). Through our nature-based offerings, we help businesses to become resilient in their operations while also contributing to the Sustainable Development Goals (SDGs).
  
• We, at PwC, can help you identify and prioritise climate risks and opportunities, understand your current performance against peers, and assess the value implications and change initiatives needed to mitigate climate risks.
  
• We can help you determine scope 1, scope 2 and scope 3 carbon footprints, and help you set up a digital tracking solution to enable ongoing measurement and tracking against various climate scenarios. With this value chain-wide greenhouse gas (GHG) footprint, your organisation will be able to translate the implications of carbon into business-specific parameters.
  
• Net zero transformation: We assist clients in their net zero transformation, which means transitioning to a state where a business or economic activity adds no incremental GHGs to the atmosphere. By understanding the strategic sustainability issues for your business, we assess the business case for change and evaluate sustainable investing practices. Those who lead the decarbonisation transition move from defence to offence sooner and lead the creation of new markets for their businesses.
  
• Businesses need to anticipate impacts to the operating model by taking specific steps on climate change, emissions and investments for a low-carbon future. This may include capital or R&D investment decisions, deals, workforce and skills development, products and services design, and customer experience decisions.
  
• Climate resilience, adaptation and mitigation planning: We work with our clients to identify and mitigate climate impacts and adapt to the climate variability through the firm’s climate change consulting. We help businesses to focus on climate resilience and just livelihood generation for communities to gain a social licence to operate.
  
• Climate risk and vulnerability analysis: We support clients in conducting an in-depth analysis of the risks and opportunities posed by climate change under different GHG emissions trajectory and policy regime for policymakers and businesses to take informed decisions around climate adaptation and mitigation strategies.
  
• We help conduct physical and transition climate risk assessment and scenario analysis with IPCC data that is aligned with the Task Force on Climate-related Financial Disclosures (TCFD) and further informs Carbon Disclosure Project (CDP), Dow Jones Sustainability Indices (DJSI) and sustainability reporting requirements.
• Our digital climate resilience analytics tool can provide granular-level risk analysis across your value chain and recommend adaptation measures to build resilient supply chains, physical integrity of the assets and operating plans for the workforce to mitigate ever-intensifying climate change impacts, like rise in sea levels, floods, heatwaves and droughts, to name a few.

• We provide end-to-end support to organisations on identification, listing, validation, registration, monitoring, verification and certification of carbon credits under different market mechanisms such as Verra, Gold Standard, Global Carbon Council and other UN mechanisms such as Clean Development Mechanism and Sustainable Development Mechanism.
• We support organisations in the transaction of issued carbon credits.
• We provide policy-level advisory to national and state governments on developing carbon market mechanisms and registries covering both offset mechanism and emission trading schemes.
• We support clients in designing internal carbon pricing (ICP) mechanisms, keeping in mind the external carbon taxation policies – both existing and upcoming, such as cross-border adjustment mechanisms.

Water-related risks and factors that influence businesses are complex, and consistently feature among the top 10 major concerns as well as material issues for businesses across the globe. With increased local and regional water stress and frequent climate events, water-related challenges are more pronounced, prompting corporates and businesses to consider it an imperative to understand their risk exposure and plan risk resilience for short- and medium-term business security and long-term business sustainability. Companies are investing in water-related stewardship action in direct operations, areas where they operate and across their external dependencies considering: i) the traction on SDG goals and 2030 Water Agenda picking up rapid pace, ii) investors and stakeholders urging companies to disclose water performance, and iii) customers and consumers rallying for sustainable corporate practices.

PwC, through its global network of professionals that are connected via its Water Centre of Excellence (Water CoE), has been supporting corporates and businesses in their endeavours across various stages of corporate water action journey. Our market-leading expertise brings together cross-functional domain capabilities with the best-in-class tools that are essential for navigating the dynamic nature of water-related challenges. This enables us to mobilise appropriate resources and co-create successful outcomes for our clients across all spheres of their water action journey, with the benefit of global capabilities and regional insights including:

Circular economy is a system-focused model of operations, which involves processes that are restorative or regenerative by design, enable resource-use in processes and activities to maintain their highest values for as long as possible, and aim for the elimination of waste through the superior design of materials, products and systems, including business models. The Government of India has been prioritising circularity in recent years through policy amendments, by focusing on higher resource-use efficacy and scientific waste management. The Draft National Resource Policy (NREP) 2019 is guided by the principles of reducing primary resource consumption to ‘sustainable’ levels, with high resource-use efficiency and creating higher values with circular approaches. The NITI Aayog has identified eleven focus areas and formed inter-ministerial committees to facilitate transition from a linear to a circular economy approach for these areas.

Adopting circularity has become imperative for businesses not only for compliance to the evolving regulatory requirements, but also for building resilience towards eventualities like indiscriminate resource extraction, volatile geopolitics and sensitivities in the supply chain, which may result in acute resource scarcity or price fluctuations. In addition to sustainability-conscious western markets targeted by Indian industries, domestic consumers are also gradually becoming more aware, and demanding businesses to be more responsible in consuming and managing resources. Corporates, through innovative circularity-oriented systems and processes, can access greater opportunities for profit through material cost savings and reduced environmental impacts, while further propelling their growth. Corporate strategies may vary – depending on the ambition of the organisation, size of their business, sectoral focus and the maturity of the ecosystem to support their objectives. Initiatives that relate to circular economy are broadly within the spectrum of a ‘9-R concept’ which include:

• the 3-Rs (reduce, reuse, recycle) at the basic level with a wide range of applications
• 3-Rs (recover, redesign, and remanufacture) that prompts introspection into business processes and innovation
• additional 3-Rs (refurbish, repair, and refuse) that involves mature ecosystem and cross-overs between businesses and sectors.

Leveraging our exhaustive experience of working with various Government and corporate entities on different aspects of circular economy, we envision a holistic approach for navigating the transition to circular economy. Given the current environmental and market imperatives, we foresee the need to lower the use of virgin material or resources in provision of goods and services, and maximise value across the product life cycle. These need to be taken up urgently by businesses if they are to achieve greater competitiveness in the market in the long run. PwC provides services across the circularity process chain which include:

• Investors are keenly watching how their investments are enabling responsible supply chains. As the global fund flows are increasingly exposed to closer scrutiny on carbon emissions, resource intensity, human rights violation and tax transparency, corporates are looking at cost-effective methods to adopt responsible supply chain practices.
  
• Our understanding of the complexity of supply chain management, deep understanding of the ESG issues in the value chain and sector-specific expertise together can help you understand where the priority ESG issues lie in your supply chain and supply you with cost-effective methods to address them.
  
• Multi-layered supply chains cutting organisational and country boundaries require a pragmatic approach to enhance ESG performance of the supply chain. Our digitally enabled solutions that can accelerate the engagement with suppliers and measure and track specific ESG key performance indicators (KPIs) across supply chains, can also provide a high impact solution to our customers.
  
• We can help you to establish a supplier ESG framework in alignment with prominent supplier rating agencies that can endorse responsible supply chain performance to a wide range of global customers.
  
• We support our clients in integrating environmentally and financially viable practices into the end-to-end supply chain and asset life cycle. We also assist them in optimising logistics and warehousing to reduce emissions, adopting a circular economic system aimed at minimising waste and sustainable use of resources – from product design and development to material selection, (including raw material extraction or agricultural regeneration), manufacturing, packaging, transportation, warehousing, distribution, consumption, return, disposal and net zero emissions.
  
• We also help companies to assess and de-risk supply chains from issues related to sustainability scarcity.
  

• Complexity of ESG KPIs require multiple technical competence to design measurement and tracking systems. The firm’s technology team with extensive experience in various digital technologies can help you to identify, architect, develop, implement and support complex digital technology solutions to measure, track and report ESG performance across your value chain.
• PwC India’s team is also experienced in providing simple point solutions and tools to manage the ESG reporting in India, requirements in alignment with prominent frameworks such as Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), BRSR and International Integrated Reporting Council (IIRC). These solutions can be deployed in your own private cloud, or you may use the highly secure cloud environments managed by PwC.
• As ESG reporting is a continuous process, PwC India has competencies and teams to support management of the ESG data solutions and provide various kinds of managed services offerings. The firm’s partnerships with prominent digital platform providers can help you gain our implementation services, depending on the enterprise platform of your choice, which will give you an optimised total cost of ownership throughout the life cycle of the solution.

• ESG requires a structured approach to capacity building. The National Guidelines on Responsible Business Conduct bestow the responsibility of creating awareness and capacity building on the top management, making ESG capacity and required skill sets a boardroom issue. Our ESG capacity building team can develop and deliver tailor-made ESG capacity building programmes at an optimised cost, through various delivery models.
  
• Our capacity building services address various levels of the organisation specifically – top management sensitisation workshops, focused functional training on ESG for various functions, and organisations wide webinars or e-learning programmes with automated evaluation capabilities. PwC India’s ESG consulting and capacity building services are applicable to the value chain partners such as suppliers or contractors, offering various optimised delivery models.
  
• We assist clients in making a smooth transition to a net zero economy, where no new greenhouse emissions are added to the climate as a result of their company or economic activity. We are working with governments to create ESG frameworks and city decarbonisation tool for sustainable urban transitions. Our sectoral experts can help you determine, measure and offset scope 1, scope 2 and scope 3 emissions from various sectors, in order to develop an effective decarbonisation strategy for the sustainable transition of your company. With this value chain-wide GHG footprint, your organisation will be able to translate the implications of carbon into business-specific parameters.

• The Companies Act, 2013 made CSR spending mandatory for companies (small- to large-sized), and has now defined the regulatory boundaries governing CSR activities by bringing in more transparency and accountability, right from the board level. This necessitated a newer level of alacrity and flexibility on the part of corporates to gear up and respond to the requirements posed by Section 135 of the Act, including the most recent Companies (CSR) Amendment Rules 2021, which mandated companies to ensure strategic CSR investments, leading to effective spending and disclosures. These new amendments intend to promote accountability and transparency within the CSR ecosystem with regard to implementation and reporting.
• We are working with several corporates and/or their foundations to help them through this journey and support in providing strategic direction to their CSR programme design, implementation and reporting as per the intent and spirit of CSR rules. We have been helping them navigate through the new challenges along the continuum in this dynamic landscape of CSR. PwC’s CSR Advisory practice helps clients to strategise and manage their CSR programmes, and assess impacts on the economic, environmental and social parameters, within their operations and in their supply chains, as well as report on the same. We offer significant value to our clients (at different stages of the CSR life cycle) based on the CSR maturity level, with customised services for planning, assessment, implementation and evaluation.

Our key services at each stage of the CSR life cycle are outlined below

• Impact investing
  We provide and evaluate investments made into companies, organisations and funds with the intention to generate a measurable, beneficial social or environmental impact – alongside a financial return – and ensure sustainable investment.
• Value creation in deals
  
  • Corporates/private equity: Embed ESG factors as a value driver in a deal construct to enhance value and transaction price, increasing an investment’s resilience after acquisition and impacting its exit value.
    
  • Corporate intelligence due diligence: In-depth analysis of publicly available information regarding legal entities, their owners/beneficiaries and management in order to identify any signs of untrustworthiness.
    
  • Forensic investigations: Conduct investigations into corruption, corporate governance and the financial aspects of major commercial disputes of corporates. It includes the review of data privacy and cybersecurity policies of businesses.

Climate change has made it challenging for the financial sector to assess their investment risk decisions. At PwC, we bridge this gap by helping our clients create ambitious goals and targets to become climate and nature-positive in order to enable them to make future-ready investment decisions. Voluntary carbon markets is a game-changer for carbon offsetting. At PwC, we support clients in accessing voluntary sustainable markets and realise revenue from carbon credits and plastic credits.

• Green taxonomies: We have considerable experience and expertise in creating green taxonomies that are harmonised with international taxonomies to facilitate the inflow of sustainable finance for industrial decarbonisation. We are also enhancing and expanding collaborations with financial markets to protect businesses against future losses and damages through climate risk insurance and disaster risk financing. Additionally, we can help you structure your project pipelines for mobilising climate investments that can have long-lasting and multifaceted positive financial implications for your organisation.
  
• Green and social bonds: Support clients in green financing for new and existing projects or activities, with positive environmental and social impacts.
  
• Sustainable banking funds and stock exchanges: We help integrate ESG criteria into traditional banking and capital markets, setting ESG performance and net zero as key objectives.
  
• International development: International financial institutions have a key role to play in mitigating risks for developing economies, while ensuring more efficient allocation of public and private capital. Moreover, we support governments and sectors in utilising cross-border capital flows to fund investments in sustainable development.

Stakeholders are demanding a greater level of transparency from companies on their tax affairs as tax is increasingly viewed as a powerful indicator of a company’s societal contribution. The way companies manage and control their tax risks (including tax strategies, tax policies and governance framework) is seen as an important factor in assessing the sustainability of a business.

In India also, stakeholder interest in ESG is intensifying, causing companies to reshape their purpose and operating model. This means finding a balance between financial returns, environmental impact and societal progress. Transparency cannot be compromised and hence cannot be used under balancing. Tax is integral to the ESG conversation and brings a distinctive advantage* to the overall ESG profile.

Stakeholders are using ESG considerations, including tax information, to assess an organisation’s ESG governance and risk profile as well as societal responsibility. Moreover, it is envisaged that more and more regulators would rely on disclosures relating to tax transparency going forward.

Tax is emerging as an important lever to incentivise climate action in many geographies. With highly visible examples – US IRA channelled as tax incentives for decarbonisation and the EU’s progressive plans to impose carbon border adjustment taxes – focus on tax is an essential element of ESG.

Download the Tax and ESG flyer

Our services include