Recounting the business’ journey of implementing a meaningful ESG strategy, Neil divulged that OSB Group identified the importance of taking this responsibility seriously, understanding the United Nations’ Sustainable Development Goals, and identifying areas where the group could make a meaningful impact.

“As a business, we are committed to our ESG strategy and the pathway to net zero regardless of any regulation or what others in the market are doing. That means we have dedicated more time and resource to our ESG strategy development and implementation than we were required to,” he said.

“We also created a comprehensive plan that aligns with our values of responsible stewardship, safeguarding our business, and enhancing support for our customers.”

However, based on his experience and his discussions with others in the industry, Neil claimed there was still significant room for progress in this sector when it comes to implementing ESG.

“I spend much of my time talking with others in the industry in order to share our learnings and approach and agree that there is much work to be done across specialist finance to maximise the potential of ESG.”

B&C also talked to Neil about the current state of ESG in the specialist finance market, and the main challenges stopping firms from embracing ESG.

What are the main causes for the lack of knowledge and understanding about ESG?

To implement an ESG strategy properly and to fully understand what it means to [a firm] and its stakeholders requires time, effort, energy and expertise. We’ve changed from a group of various individuals who had ‘side of the desk’ responsibility for various facets of ESG, to having a dedicated team whose sole role is to get to grips with the complexity of the ESG frameworks and guidance and to strategise, plan and deliver, and critically, to lead change and to take the whole business with them — upskilling through the organisation. My job will be done when we are no longer needed because everyone within the bank has the requisite knowledge and competencies to play their role.

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Do you think there are enough resources and guidelines that firms can use to implement ESG strategies?

One of the challenges ESG professionals face is that there is too much, often unclear, guidance being presented to the market. The industry is focusing on trying to streamline the guidance and make it much more consistent and interoperable across various reporting jurisdictions. An example of unclear legislation is the EPC guidance, which was then ultimately scrapped by the government. Ensuring the guidance is clear and enforced will be vital to the future of ESG.

In terms of resources, firms are struggling to recruit ESG expertise, especially those that also have industry experience and knowledge. A successful ESG strategy though will require this to be embedded within all cross functional areas and governance structures where ESG is considered as a key thread in business strategy and key decisions making. Firms are struggling to recruit and upskill resource in key functional areas for ESG to be fully embedded and understood. However, as ESG evolves across industry and corporations, I expect the resource strain to relax over time.

What should firms do in order to implement a meaningful ESG strategy within their business?

To fully understand what risks, opportunities and initiatives are relevant to individual firms, they should undertake a full ESG materiality review — this will allow the firm to give consideration to a wide variety of stakeholder requirements, and will enable the firm to focus on those ESG topics that are material to that specific firm. It will also help align and integrate the risks mitigants, opportunities and initiatives to the firm's overall strategic goals, objectives and business operations and practices.

It is important though that the ESG initiatives are not only balanced across the three ESG pillars, but also the firm’s financial wellbeing. For example, a wholly environmental-centric approach could have unintended consequences on colleague or customer outcomes or on a firm’s financial position. There are clearly some initiatives that firms can adopt that will pick at the low hanging fruit, but other initiatives such as net zero ambitions may need to be transitioned over a longer term.