We support financial institutions to understand whether a specific transaction or client complies with international standards, complies with the institution's policies, and presents reputational risks to the financial institution.

We also derive strategies to adequately address the controversial aspects of a transaction in order to mitigate negative impacts and reputational risk.

Examples:

• Assessed compliance of transactions against the Equator Principles and the corresponding standards of the World Bank Group (including IFC Performance Standards).
• Carried out reputational risk assessments for transactions in sensitive sectors (such as forestry or thermal power) or controversial products (such as asbestos) in various countries, covering all types of transactions and client relationships.
• Supported a national export credit agency in assessing compliance of several dam projects with relevant international standards.

Controversial sectors and countries

We help our clients understand what are the risks resulting from investments into specific sectors or countries.

Examples:

• Drafted a strategy paper to support an international financial institution in assessing reputational risks when financing new nuclear power plants.
• Assessed reputational risks related to the country’s human rights situation to support an investment decision related to a sovereign wealth fund of a Middle Eastern country.
• Benchmarked a bank's exposure to climate change risks at the portfolio level against a market average. Similar studies were carried out for other risks, such as financial risk related to site contaminations in corporate lending (owing to potentially impaired values of collaterals).

Financial products

We support our clients in understanding the reputational risk related to their financial products. We assess the suitability of investment guidelines and marketing material to mitigate the risk that the financial institution is exposed to criticism.

• Assessed a real estate related product and its potential to be perceived as socially irresponsible in the aftermath of the financial markets crisis.
• Assessed an investment opportunity related to sustainable forestry in the Amazonian rainforest and its potential to be perceived as harmful for the environment and indigenous communities.
• Assessed several funds investing into renewable energies (e.g. hydropower) and their potential of having negative impacts on the environment or the local population.
• Assessed several funds investing into food commodities and agricultural production and their potential of being perceived as having negative impacts on people in emerging markets.