Challenge:
Global investment funds involve various actors across different jurisdictions. The banks’ headquarters are in Europe, limited partners (LPs) in the U.S., general partners (GP) in Hong Kong, exchange-traded fund (ETF) setups in China, and invested projects located within China. These projects must adhere to both Western and Chinese ESG (Environmental, Social, and Governance) requirements. Additionally, the boards, C-suite executives, headquarters, and financiers across these jurisdictions have specific requirements that need to be fulfilled.

Solution:
To address these complexities, we developed a risk-based verification and assurance framework. This framework benchmarks financiers and global bank requirements against a renewable infrastructure framework tailored for sensitive supply chains. Furthermore, we established a three-stage due diligence framework that involves oversight of loan applicants, project developers, and project operators.

Impact:
Our efforts have led to overall compliance with EQ4, IFC PS2*, and sensitive supply chain requirements. We have enhanced transparency and accountability regarding ethical sourcing in loan-projects. Additionally, we have effectively managed risk and facilitated ESG-based loan allocation for globally financed infrastructure projects within China.

Challenge:
The new German Due Diligence Act (LkSG) requires global supply chain oversight for environmental and social factors. It mandates independent verification and reporting for imports into Germany and the European Union.

Solution:
To address this challenge, we developed a risk-based verification and assurance framework. This framework integrates chain-of-custody, product certification, and segregation principles. Additionally, we created a compliance checklist to promote continuous improvement and designed reporting formats that meet statutory requirements.

Impact:
Our efforts have streamlined compliance with LkSG regulations, enhancing supply chain transparency and accountability. As a result, we have also reduced regulatory risks associated with EU-wide renewable energy deployment.