ESG Regulatory Compliance

The Optima Approach

We help clients understand their exposure to new and upcoming ESG regulations, conducting framework reviews & gap analysis to help you establish efficient, robust compliance processes wherever you fall within scope. We cover SEC, FCA, and EU regimes, assist with mandatory reporting and disclosures, conduct Mock Exams, and proactively help you with horizon scanning to keep you ready and prepared as new ESG-related regulations emerge.

Overview

Our clients come to us for support regarding 4 main ESG Compliance issues:

Complexity and Diversity of ESG Regulations: Asset managers constantly grapple with a complex array of regulations that vary by jurisdiction – which can be especially challenging when launching or managing cross-border funds. The inconsistency and variability in regulations require specialized knowledge and expertise, leading to increased operational complexity.

Data Management: Effective ESG compliance requires robust data management systems to collect, process, and report a vast array of qualitative and quantitative data. Many firms find it challenging to ensure data accuracy, completeness, and timeliness, which is crucial for reliable ESG reporting and disclosure.

Resource Intensity: Balancing the resource intensity of compliance while maintaining profitability and competitiveness is a constant struggle as ESG and sustainability related regulation proliferate.

Consistency & Control: Firms often find it difficult to implement ESG procedures consistently across the first, second, and third lines of defence. Policies might be applied inconsistently across different business units due to diverse operational practices or lack of standardized procedures. Clarity and communication between the first and second lines of defense can present its own issues functions where risk management functions are unfamiliar with operational nuances, leading to generalized advice that might not be applicable across all units.

How does
Optima help?

Standardization: Optima are trusted compliance specialists across the alternative assets segment. We channel this wealth of expertise through an ESG lens to help you develop and implement standardized ESG compliance procedures across all business units. As we work with clients to develop effective ESG compliance, we leverage expert insight to ensure programs are also efficient to mobilise and monitor.

ESG Training: At the request of clients, our ESG compliance support is paired with regular and comprehensive training for both lines of defense to ensure a unified understanding of regulatory requirements and their operational implications.

Active Support on Reporting & Disclosure: Optima will undertake reviews of your mandatory disclosures and the reporting processes that underpin them to ensure line-by-line fidelity to the relevant regulation, paying close attention to explanatory commentary that has been provided by supervisory authorities.

Mock Exams: We also conduct realistic FCA and SEC mock exams to help clients identify weaknesses in compliance programs, allowing firms to address and remedy issues before an actual exam. Our exams provide a realistic simulation that closely mimics the format, intensity, and scope of an actual regulatory exam. We help employees become familiar with the examination process, enhancing their preparedness and response efficacy, while providing a basis on which firms can refine their internal processes to ensure they are robust and compliant. Typically, our mock exams consist of a Pre-exam review, followed by an on-site or remote examination. We then follow up with detailed findings and actionable recommendations highlighting weaknesses, and areas of improvement.