(Credit: K2)K2 Integrity (K2), a risk and financial crimes advisory firm, has launched an independent certification program for environmental, social and governance (ESG) strategies for funds and fund managers. The offering will continue to help assist clients in addressing risk, meet regulations and compliance requirements, and assess, design, and implement certifications and trainings for the marketplace.
Applying its proprietary framework, K2 Integrity will conduct a detailed review of qualitative and quantitative metrics to verify that a fund and manager is compliant with ESG best practices. K2 says its assessment takes into consideration applicable regulations that improve trust and transparency as these relate to ESG criteria. It also mitigates the risk of "greenwashing," which has become more prevalent as interest in ESG investments has grown.
"The need to validate and quantify ESG initiatives has never been greater, as investors, regulators and other stakeholders pay closer scrutiny to funds' activities," said Andrew Rabinowitz, Co-CEO of K2 Integrity. "Funds and fund managers must make sure they are following through on their ESG commitments." The assessment certification brings together ESG, regulatory, legal, industry, training and certification expertise, he adds.
This ESG certification is based on a fund's voluntary self-disclosure and independent review by K2 Integrity experts, who analyze, assess and validate the fund's own commitment to investors. Rather than rely on self-reporting by a manager, independent certification provides a review of approach and processes, as well as demonstrates alignment with the industry's best practices.
According to a recent survey by Callan, 78% of asset managers now incorporate ESG into their investment allocations. And according to Morningstar, as of the first quarter of 2022, more than 2,000 asset managers globally handle some $343 billion in sustainable funds, with such strategies taking in more than $96.6 billion in net new deposits over the period.
Other recent ESG solutions include VelocityEHS and Frostbyte Consulting, which have partnered to enhance and speed implementation of software that can help companies quickly track and achieve ESG targets.
PwC and Sphera are also partnering to build a stronger ESG digital management platform that will help companies increase their ESG efforts and accountability, the organizations say.
