EMEIA Financial Services Sustainability Report 2016

Our sustainability journey

EMEIA Financial
Services Sustainability Report 2016

Sustainability in financial services is not just an escalating issue – it's a pathway to inclusive growth. Whether it is deciding on new products to develop, looking to retain and attract top talent, or developing a long-term growth strategy, companies with a reference point beyond profit have a clear advantage over their competition.

Our report looks into the material sustainability issues in the industry and follows our own journey to achieve sustainability.

We invite you to read Marcel's view on sustainability in financial services and explore the rest of our report. We look forward to hearing what you think.

#sustainableFS

Marcel van Loo

Regional Managing Partner
EMEIA Financial Services

Read my welcome letter

Our year

In EMEIA Financial Services, we believe that profitability and inclusive growth aren't mutually exclusive. This report for financial year 2016 shows how we are bringing that to life with our clients, our people and our communities, and how we will continue to come together to meet the challenges ahead. For an overview of our year, watch our executive summary and join the conversation. #sustainableFS

See our year's data in our performance snapshot.

For an overview of our content, click here to download a short summary report.

Play
Watch the video

Materiality in
financial services

Our materiality assessment is a fundamental component of our sustainability journey — it identifies the most important issues for our stakeholders and industry, and informs what we report on. In financial year 2015, our desktop research identified 21 material topics rated by our internal and external stakeholders. Of those, six were rated as priority issues.

Click for more Read more

Our materiality assessment

In financial year 2016, we validated the material issues through an interview on market trends with our Regional Managing Partner Marcel van Loo. The interview suggested that the six priority issues — regulatory compliance; environmental, social and governance (ESG), and climate change risk; culture, ethics and integrity; trust and transparency; governance and risk; and digital innovation and disruptive technology — remain the same. What did change, however, was the order of importance. Our stakeholders now identify digital innovation and disruptive technology as the top priority issue within financial services.

UN Sustainable Development Goals

The importance of the UN Sustainable Development Goals (SDGs) as a framework for addressing global challenges has grown, and this momentum is expected to continue as the terminology becomes more familiar, and organizations continue to assess and report on their alignment with the targets. We have evolved our thinking on the SDGs, undertaking an exercise to review which SDGs are most important to our business and the industry we work in.

Click for more Read more

The importance of the UN
Sustainable Development Goals

We have a direct impact on these key SDGs through our people and the communities we work and live in. In addition, the extent of our influence on addressing the issues covered by the SDGs is much wider because of the nature of our business. We support clients across the whole range of issues included in the SDGs through the diversity of our service offerings — this will be our key strength in supporting the achievement of the SDGs.

Landmark
events in FY16

In 2016, a number of landmark events transcended sustainability and the financial services industry.

Click for more Read more

Brexit

London is currently the center of financial services in Europe and we expect that to continue in the foreseeable future. The fundamentals that underpin the attractiveness of the UK remain unchanged. Financial institutions within the UK are well capitalized, its systems are resilient and the regulatory structure is well tested and well regarded around the world. We expect that the UK's financial infrastructure, connectivity to international markets, skilled workforce, optimal time zone, trusted legal system and regulatory environment will all continue to attract business to operate within the UK. However, many firms may need a physical EU27 nexus for some of their activities if they are to retain EU clients after a Brexit. Obtaining regulatory authorizations can be a slow process and firms are working now to create options for their businesses to deal with all possible outcomes from the negotiations.

Omar Ali, Managing Partner, UK Financial Services states: "Where there is change, there is risk, but there is also opportunity. By being prepared, we can embrace those opportunities.At EY, we are committed to playing our role to enable a smooth transition for our clients and our people across our 14 markets."

Marcel van Loo, Regional Managing Partner, EY EMEIA Financial Services says: "I'm really proud of the work our people are doing for our clients, and with policy makers and governments on Brexit. This is exactly the kind of time where we need to live up to our purpose. It is a game-changing period for the industry, and we are in a position to help shape the future of financial services in the UK and across Europe. Our clients need us to react quickly with strong insight and act with integrity in advising them about the future of their businesses and that is what I am seeing our teams doing."

To gain more insight, please explore Brexit: a financial services perspective.

Advancing the sustainable finance system

On October 5, 2016, 109 of the 197 countries ratified the Paris Agreement to keep the world's warming under the necessary 2°C. The agreement came into force on November 4, 2016, with 130 financial institutions controlling US$13 trillion in investments firmly behind it. The financial services industry called upon the G20 countries to ratify the agreement on the basis that it would allow for better policymaking and improve investment opportunities in low-carbon technology. Specifically, they called for regulations that support renewable energy and energy efficiency, carbon pricing, and a plan for phasing out fossil fuels.

The financial services industry has a unique part to play, from integrated reporting to directing investments and lending toward activities and projects that support climate finance, adaptation, low-carbon impact investments and incorporating ESG throughout portfolios. This guidance is echoed throughout the industry, and we are seeing regulation and policy emerge: new EU Pension Fund guidance mandates that ESG be considered, and the Financial Stability Board (FSB) chaired by Mark Carney has created the Task Force on Climate-related Financial Disclosures, which recently launched its recommendations for the industry. These developments acknowledge that climate change risk and opportunities are global, that businesses need to investigate where they have exposure and that businesses need to report on their findings within the financial reporting structure.

There are, of course, opportunities here: being a first mover can be daunting, but in this scenario, lagging behind is a risk. As we see the increase in policy, the move from voluntary to mandatory compliance, the mounting public pressure and the threats of stranded assets, a real need to assess climate change and business has emerged in light of the Paris Agreement and the new developments from the EU and FSB.

EY is producing insights unique to the financial services industry, from investment perspectives on climate change to the economics of solar power.

Read more about how you can prepare your business on our FS Insights Hub.

About our report

At EY, we want to support the financial service industry's role in society. We do this by working with internal and external stakeholders to enhance sustainability in financial services dialogue, by integrating sustainability into different aspects of our business, and by placing emphasis on the SDGs and what they mean to financial services.

Click for more

At the same time, the increasing impact of the digital revolution — both the disruption and the associated innovation, is affecting the future of the financial services industry's business models as well as its people. We need the vision to see what that future will look like, and we need the insight that our people will be key to the transformation required, so that we can prepare ourselves and our clients accordingly.

We see corporate sustainability as the living example of what it means to build a better working world. This report brings corporate sustainability to life with a particular lens for financial services. It provides a platform for discussion on current and future trends within the industry, along with our response. This report also shows the progress we have made on our agenda across our three stakeholder groups — clients, people and communities — in a transparent manner, highlighting areas for celebration but equally acknowledging aspects where there is still more to be done.

Embedding sustainability into financial services is essential to achieving a successful business. Business leaders are more readily acknowledging that they need to do something to address not only the material financial impact, but also the environmental and social aspects of their organization.

Businesses accept that there is a moral, ethical, social and financial imperative to address sustainability risks and opportunities; actions must follow. In doing our part to build a better working world, EY EMEIA Financial Services has a clear role to play in helping our financial services clients address this issue, while at the same time making sure we take action to achieve our own sustainability goals.

Our global connectivity and local knowledge allows us to help our clients operate more effectively and efficiently, wherever they are. The scope of the report is the EY EMEIA Financial Services region, which includes 14 markets (Austria, Belgium, Channel Islands, France, Germany, Gibraltar, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Switzerland and the United Kingdom) and three sectors (Banking & Capital Markets, Insurance and Wealth & Asset Management).

This report covers FY16, from July 1, 2015 through June 30, 2016.

The FY16 data reported is internally assured by an independent business unit within EY specializing in providing assurance on sustainability reporting. The scope of the assurance includes the FY16 data in the Performance Snapshot except partner commitment and carbon emissions: scope 3 (and therefore total carbon emissions, carbon emissions per FTE and air travel emissions). A review for consistency with the data that was assured in FY15 data was conducted. We believe that the independent nonfinancial assurance process enhances the rigor of transparent reporting in line with sustainability reporting guidelines.

Top

Our clients

Any successful relationship is built on trust. And we deeply value our connections with everyone; from our clients to like-minded organizations and individuals. While delivering consistent, high quality service we offer industry-focused insights that promote increased trust and confidence in the financial system. Our aim is to serve as a leading voice for sustainability within the financial services sector, exploring new perspectives with our clients to support that what we do today counts tomorrow.

In an increasingly complex world our clients are dealing with interconnected issues, from global megatrends to sustainability-specific issues. Our global report in The Banker looks at the future of financial services in this context, covering topics such as purpose, digital transformation and regulation.

In our recent financial services materiality assessment, we unearthed a set of key sustainability issues which were on our clients' agenda: digital innovation and disruptive technology, regulatory compliance, ESG and climate change risk, culture, ethics and integrity, trust and transparency, and governance and risk. We too are striving to embed sustainability in our core services, at a time when the financial services industry constantly evolves its appreciation for sustainability as a source of material risk as well as new business opportunities.

Click here to view our climate change and sustainability services.

Digital innovation – the upside to disruption

Digital technology continues to disrupt and fundamentally transform the financial services industry. Customer behaviors and expectations keep changing, including their expectations of financial services organizations themselves. The industry needs to embrace the opportunities this change presents in order to succeed.

Click for more Read more

The Fourth Industrial Revolution

In last year's report, we indicated that financial services organizations were zeroing in on digitalization, with a specific focus on the customer experience, digital privacy, cyber security and FinTech. This year, as we strengthen our digital capabilities with our clients, the Fourth Industrial Revolution, characterized by digital technology, automation, artificial intelligence, robotics, the Internet of Things and the sharing economy, continues to present the most significant challenge for financial services organizations. From a people perspective, financial institutions are currently focusing on the efficiencies they can gain through automation. What they are slower to consider is the resulting impact of large-scale unemployment on the economy combined with the skilled labor shortage necessary for the workforce of the future. In terms of disruptive business models, digital technology is creating nontraditional means of accessing capital outside the traditional banking framework. Similarly, the asset management industry is being disrupted by a new breed of "robo-adviser," which can replicate the strategies of human advisers at a fraction of the cost, and may be able to operate outside the traditional asset management regulatory framework. Going forward, we see a role for digital technology in financial reporting, transparency and compliance.

"Technologies such as robotics, artificial intelligence and machine learning have the potential to dramatically transform financial services. However, we do not yet have a thorough understanding of potential impact, not only on the industry but also on society as a whole."

David Ebstein, Head of Digital, EY Financial Services

How robots can help people understand humans

It is an exciting time to explore the opportunities that big data and analytical advances bring to the understanding of human behaviour.

Read the full report

Watch the film below to find out more about robotics process automation.

Play
What is robotics process automation?

Cyber resilience

Cyber security remains a hot topic within financial services. As the digital world continues to create innumerable opportunities, financial services organizations are seizing upon as many possibilities as they can to better understand, analyze and connect with customers and create new markets and products to meet their needs. In the process, however, some may continue to be overlook the associated risks. Among respondents to our Global Information Security Survey 2016-17, 86% say their cyber security function does not fully meet their organization's needs. 62% say they would not increase their cyber security spending after experiencing a breach that did not appear to do any harm.

Risks around data privacy have also increased as the European Parliament and the Council of the EU came to an agreement on a new EU General Data Protection Regulation (GDPR). The regulation will have a significant impact on businesses in all industry sectors, including financial services. More information on the impact of the regulation is available online and in this report.

FinTech

FinTech products continue to offer alternative opportunities for access to a variety of services traditionally thought of as being part of the domain of the bigger players in financial services, from money transfers to financial planning. The biggest selling feature of these new online financial services for consumers is, in part, the ease of setting up an account. More attractive fees, access to different products and services, and a better online experience make them all the more enticing.

As FinTech becomes more attractive to consumers and technology prices continue to drop, banks are feeling the pinch as it eats into their market share. In response, financial services institutions may need to reassess how they attract and serve a demographic of consumers that is known to be unpredictable in its behaviors and holds limited value in loyalty. A more nuanced segmentation strategy and a better online experience may be needed to attract — and keep — the right customers. More importantly, reimagining their business models to compete more effectively in a digital world, though partnering with FinTech organisations, will enable established financial services organizations to remain competitive.

In EY's FinTech Adoption Index survey, 15.5% of digitally active consumers were using FinTech products

How collaboration with FinTech can transform investment banking

What should the high-performance investment bank of the future look like?

Read more about how collaborating with FinTech can transform investment banking here.

Watch the film below to find out more about how collaborating with FinTech can transform investment banking.

Play
The way we bank now

Example:

Payment Services Directive 2 (PSD2) and the UK's Open Banking Initiative

Read more

Regulatory compliance – necessity and competitive advantage

Regulatory compliance has risen to the top of board and executive agendas in recent years as the cost of failures has proved financially and reputationally damaging and remediation of errors has consumed increasing management time. This material issue will remain a high priority for the financial services industry for the foreseeable future, and organizations will need to continually answer questions such as:

  • Are we adaptable and resilient?
  • Do we conduct ourselves appropriately?
  • Do we have the right governance?
  • Are we resolvable?

Regulatory compliance and questions such as these are not new. What's new is what it will take to anticipate, mitigate and manage new and existing regulatory expectations.

Click for more Read more

The cost of compliance

Since the 2008 financial crisis, governments around the world have increased market intervention substantially, re-regulating banking and financial markets. These regulations, which continue to increase in both number and complexity every year, are fundamentally altering the financial services industry and imposing enormous compliance costs at a time when financial services organizations are seeking to cut costs in an effort to boost revenues in a low-growth environment.

Sustainability in the context of the financial services environment means preparing for an evolving and not always consistent global regulatory landscape, increased regulatory scrutiny and implementation of new regulations to ensure survival of the business over the long term.

It's difficult to focus on the future when you're running to stand still.

Our Managed Services offering helps clients to concentrate on moving their business forward, rather than looking back. We pair legacy systems with new technology, knowledge and experience to help financial services clients improve the efficiency of mandatory business processes at a lower cost.

The emergence of regulatory technology

Successfully complying with the multitude of financial services regulations can be complex, time-consuming and costly. In response, new approaches to risk and regulatory management practices across the financial services sector are emerging. Increasing regulatory requirements and a rapidly evolving FinTech sector are driving the financial services industry to innovate and utilize new technologies to help navigate these issues. The objective is to lower costs, improve effectiveness and disrupt the status quo around regulatory compliance. Regulatory technology (regtech) is at the heart of this new approach.

Operating as a key component of FinTech, regtech can help to support more granular reporting standards, scenario analytics and horizon scanning, providing better insights for financial services executives. Regtech can not only provide a more automated, cost-effective way of meeting compliance and regulatory reporting needs, but also enhance consumer confidence over the long term by providing a better customer experience.

In a recent EY survey, respondents suggested that confidence in key aspects of corporate reporting has fallen since the previous survey conducted in 2014. The biggest decline is seen in "confidence in degree of compliance." Only 55% say they are fully or somewhat confident, compared with 84% in 2014. Additionally, in 2014, 71% of respondents felt that corporate reporting was effective in securing the confidence of the board. Only 48% feel the same way today, as a result of increasing complexity, growing demand and resource pressures.

Innovating with RegTech

Turning regulatory compliance into a competitive advantage

Read the full report

Embedding culture, ethics and integrity into financial services

Culture defines how an organization operates — it influences employee behavior and the choices they make, and it affects how stakeholders perceive and interact with the organization. For financial services institutions to make inclusive growth a key contributor to their profitability, they must seek to address culture, ethics and integrity as part of their broader strategy. Culture is a key intangible asset that can help financial service organizations reduce risk, improve performance and deliver long-term sustainable growth.

Click for more Read more

The value of culture in strategic operations

A recent EY report found that 86% of respondents believe that culture is fundamental or very important to a company's overall strategy and performance. In the same study, 92% of respondents indicated that investing in culture has improved their financial performance. Yet, as important as culture is, a significant portion of investors believe that companies do not provide information that allows them to assess corporate culture. Lack of a "culture audit" could be seen as a critical gap, particularly post-financial crisis, as financial services organizations have come under intense scrutiny for a perceived profit centric culture that average consumers feel is pervasive across the industry.

Ultimately, companies that are able to showcase their culture by constantly demonstrating their commitment to doing the right thing for customers, shareholders, regulators and the environment can achieve a competitive advantage.

The sector that registered the most news coverage around alleged unethical behavior was financial services with 97 reported lapses out of 376 news stories involving UK companies and multinationals with a UK presence (26%) . However, according to our recent research with Professor Roger Steare, Corporate Philosopher and Visiting Professor in the Practice of Organizational Ethics at Cass Business School in London, the moral norms of bankers aren't very much different from those of everyone else. In fact, according to Steare's research, "Their scores are about average and significantly higher than those (of people) working in politics, government and the media, who hold them to account." This indicates a gap between the morality of banking professionals and what is reported via the media. What happens in between needs to be explored more.

Rethinking risk management

On the basis of EY's 2015 risk management survey of major financial institutions, we know that a significant majority of executives surveyed around the world say that their organizations are in the process of changing culture. Yet, despite these efforts, 81% say that it's still a work in progress.

Read the full report

Culture in the age of the gig economy

Although the notion of the contingent workforce, or "gig economy," has been around for decades, its rising popularity in the past 10 years has driven it into mainstream business consciousness. In a recent EY study, which surveyed both major employers and contingent workers in the USA, one in two employers reported increasing their use of gig workers over the last five years. Yet, what our survey also found is with that increase came concerns over the impact of contingent workers on the cultural fabric of the organization, with 37% indicating that contingent workers hamper the development of their permanent workforce.

As financial institutions increasingly focus on the number of full-time jobs they can eliminate by adapting, adopting and innovating, and replacing permanent workers with task-oriented contingent workers, they will need to keep in mind the effect these contingent workers may have on their remaining permanent workforce. This is particularly important given that contingent workers are more likely to be ambivalent about their employer's business objectives and less willing to go the extra mile. As financial institutions seek to use contingent workers to improve the efficiency and productivity of their workforce, they will need to place additional emphasis on creating a culture of trust that motivates and emboldens both permanent employees and contingent workers to be actively engaged in the sustainability of the business.

Solution

The National Equality Standard

Read more

Is the gig economy a fleeting fad or an enduring legacy?

The world of work is changing dramatically, and the shape of the workforce is changing with it.

Read the full report

People Risk 2.0 and the use of analytics to improve ethics and integrity

Many financial institutions understand that data and analytics, when harnessed correctly, can help them improve performance and manage risk. Some organizations also understand the human element: the need to create a culture that engages employees and improves people performance. However, few tend to link purpose, performance and engagement with sales targets, operational efficiencies, risk and compliance management, and other strategic business objectives. They don't connect the dots across the organization in such a way as to create tangible, transformational value that has a direct and visible impact on the bottom line. By automating the processes and creating analytic algorithms that can hunt for the patterns hidden amid the reams of data financial services organizations gather about their greatest asset — their people — they can unlock the people factors that lead to better collaboration, more robust risk management, and improved ethics and integrity.

For example, a financial institution that wants to prevent traders from going rogue can look for patterns using existing processes, such as traders logging in at odd hours, not taking holidays, or displaying anomalies in the quantity and quality of trades. Leveraging analytics and machine learning gives financial institutions the opportunity to search for correlations on multiple levels simultaneously in terms of how people are, what people do, the environment people operate in and what the outcome is. By leveraging the relevant data from across the enterprise, the financial institution's network can then automatically analyze the areas that appear to correlate most strongly to the red flags or alerts identified as necessary to trigger an investigation — and they can do it in near real time.

Supporting investment performance through ESG factors

ESG factors are increasingly important for financial service organizations to achieve stable and attractive returns for their customers.

Click for more Read more

Banks and capital markets play a pivotal role in raising funds to support the infrastructure development needed for a low-carbon economy while insurers are reassessing the way they price products, develop new sustainable products and set premiums to account for property damage, legal liability, political risk, stranded assets and the economic effects associated with climate change. Impact investing is a relatively new concept, but it is quickly moving from niche to mainstream. Financial institutions are already recognizing the opportunity – large institutional investors are introducing new impact business divisions, acquiring impact-investment firms and launching impact funds. It is also becoming part of the fiduciary duty of wealth and asset management firms to incorporate ESG factors into their investment portfolios. Investors with US$45 trillion of assets under management have made public commitments to climate and responsible investment, and they are demanding that asset managers provide reliable, comparable, real-time ESG information so that they can make the right investment decisions. Organizations are starting to recognise the opportunity of managing these risks, and are changing how they do business accordingly.

Fiduciary duty and ESG

Although there is a popular belief that fiduciary duty creates a barrier for investors when it comes to embedding ESG issues into investment processes, a UN report strongly advocates otherwise. In fact, the report indicates that not only are there positive outcomes for institutional investors that take ESG issues into account in their investment decision-making, but also that "failing to consider long-term investment value drivers, which include environmental, social and governance issues, in investment practice is a failure of fiduciary duty." It seems that much of the resistance relates to outdated perceptions about fiduciary duty and responsible investment — what fiduciary duty means and what ESG integration means in practice. There is a misunderstanding that financial returns will be forsaken at the expense of achieving social or environmental obligations. By integrating ESG factors into processes, investors will be able to make better decisions, that improve investment performance, in alignment with their fiduciary duties. This, in turn, enables investors to contribute more effectively to a more sustainable society.

In what is being hailed as a "landmark moment" and a "breakthrough," the European Parliament recently approved the revised European pension fund directive, committing ESG obligations into EU law. The updated Institutions for Occupational Retirement Provision directive covers the €3.2 trillion European workplace pensions market. It contains clear requirements for European pensions to consider ESG issues, which campaigners say are "the strongest and clearest requirements" on such issues ever seen in an EU regulatory text. In addition, the European Commission has set up a panel of 20 sustainable finance experts with the remit to "hardwire" sustainability into EU financial policy, meaning it's only a matter of time before sustainability regulation increases.

Stranded assets and climate risk

As the debate over climate risks — and stranded assets in particular — grows, financial institutions are aware of, and taking action to mitigate the impact of climate risks on their portfolios, even if they can't divest the risk entirely. Countries are also taking action, with Ireland being the first to pass a law to fully divest public funds from fossil fuels. At the same time, however, both financial institutions and countries are beginning to understand the flip side: the opportunities that arise from the transition to a low-carbon economy. No one fully understands the complexities of climate-related issues yet, or the risks and the opportunities of how they are related to the stability of the financial system. However, financial institutions do understand that they have a key role to play in taking action, most specifically by incorporating the management of climate-related issues into their day-to-day activities. In doing so, they can help their clients to manage risks while taking advantage of opportunities, reduce the risk of a systemic financial crisis and create a competitive advantage amid a rapidly changing landscape.

Climate change: The investment perspective

Climate-related risks are too far-reaching for financial institutions to avoid entirely. They will impact all sectors, and require tangible actions to address these issues.

Read the full report

From risk to opportunity

Solar photovoltaic (PV) energy is widely recognized as a crucial component in addressing our worldwide need for secure, affordable and renewable energy. Although many investors still see PV as a niche investment shaped by ecological rather than financial criteria, economic and environmental factors are creating a new set of mainstream investment opportunities in renewable energy. Between 2010 and 2014, more PV capacity was installed than in the previous 40 years and a record US$329 billion was invested in global renewable energy in 2015, of which solar assets accounted for 49%. This growth trajectory seems certain to continue. In fact, Bloomberg New Energy Finance forecasts that renewables will account for around 65% of an estimated US$12.2 trillion investment in all forms of energy generation between now and 2040. Over the same period, PV is expected to jump from 2% of installed global generation capacity to around 26% — more than any other source.

Many institutions and major investors are still only dabbling in this market, with solar assets typically representing less than 1% of total allocations. Given the sizeable opportunity, it may be time for investors to rethink their position on PV and incorporate solar as a part of mainstream asset allocation.

Capturing the sun: The economics of solar investment

Despite the environmental benefits, economic factors are the most important drivers of growing solar investment.

Read the full report

Solution

Incorporating ESG issues into business strategies

Read more

Building trust through transparency

Consumer confidence in financial services continues to face challenges. Building trust with customers and being transparent with stakeholders and the public about company operations – for example, pay, tax and employee representation – is more important than ever.

Click for more Read more

Corporate culture is a hot topic among financial services executives and boards, with a focus on demonstrating the right culture. Measures to avoid the setting of unrealistic targets and to instill a sense of responsibility can be effective in rebuilding trust, especially when visibly being monitored and reinforced by leadership.

Independent Forum of Independent Audit Regulators releases its 2015 inspection findings

In March 2016, the Independent Forum of Independent Audit Regulators (IFIAR) released its report relating to its 2015 inspection findings. The survey indicated that 43% of inspected audits of publicly listed companies had only finding, with the most frequent areas being around fair value measurement, internal control testing and revenue recognition.

Although there were improvements in deficient audits from the previous year, the IFIAR is not yet satisfied. In its quest to further improve audit quality globally, it will be working with the Global Public Policy Committee, of which we are a member, on a new initiative that focuses on effective root cause analysis and implementing responsive actions. The IFIAR will measure progress over the next four years, with a goal of reducing the number of audits with only one finding by 25%.

Consumer trust in banking

Findings from our 2016 Global Consumer Banking Survey contain both good news and bad news in relation to trust. On one hand, banks are largely trusted to keep consumers' money safe. On the other, relatively few consumers completely trust banks to provide unbiased advice that puts their needs ahead of the banks' objectives. Traditional banks also fall behind nontraditional competitors relative to transparency of fees and recommending products and services most relevant to their customers' needs.

Separate survey results suggested that consumers feel that the banking and financial services sector treats their workers well and is seen as being innovative, but that it lacks transparency and integrity. Europeans remain the most distrustful of the sector. Our article, Customer trust: without it you're just another bank, explores the challenges and opportunities ahead for the consumer banking sector in both building and maintaining trust with its customers, evidencing how trust is a material issue for the sector.

Case study

Integrated reporting

Read more

"Investors are demanding corporate reporting that better reflects companies' long-term sustainable growth prospects. Integrated reporting can be seen as a tool to enhance trust and transparency in the markets as well as improve the understanding of the 'integrated thinking' process within the business itself"

Gulenn Tambe, Partner, EMEIA Financial Services

Governance and risk’s evolving role

Financial services organizations are facing pressure to re-evaluate their risk governance models in the wake of rising demands for organizations to place equal emphasis on both financial and nonfinancial risks. This is in addition to the ongoing prudential and conduct regulatory reforms that have already fundamentally altered business models.

Click for more Read more

At the same time, the Fourth Industrial Revolution is creating a profound shift in governance. Process automation and robotics offer the potential for organizations to apply processes quickly and consistently while eliminating the risk of human error. However, the same innovations that offer these opportunities also risk disaggregating the value chain, with smaller players offering segmented products and services that traditionally would have been provided by one financial services organization.

New role for internal audit

Post-financial crisis, regulators and standard setters have made it clear that internal audit should play a broader role in reviewing and challenging a model that embraces the entire governance, risk management and internal control framework of the organization. In response, internal auditors are putting themselves in the shoes of the board of directors to assess risk oversight and how culture and behaviors align with risk appetite. Internal auditors are increasingly focused on all aspects of culture and conduct risk. Improvements that organizations are making to culture, behaviors and the alignment of incentives are integral to good governance and effective risk management.

In addition to focusing on culture and conduct risk, internal audit also needs to form an opinion about the nature and operating cost of controls required to keep the level of conduct and reputational risk aligned to risk appetite. And they need to apply more judgment to outcomes. Internal audit needs to work with the business on actions that drive cost-effective improvements that align to the financial services organization's strategic objectives.

Regulators mandate capital, liquidity and leverage requirements

New regulatory reforms seek to mandate new capital, liquidity and leverage requirements. In addition to introducing new regulations, regulators are also looking to have them fully embedded into business models. Governance structures need to ensure business models are consistent with these new higher requirements and that they do not create excessive conduct or compliance risks.

Meanwhile, boards and senior executives expect internal auditors to undertake rigorous testing to demonstrate that governance systems and controls across the organization are effective, with the overall aim to strengthen risk governance and reduce the likelihood of future regulatory intervention.

However, the significant increase in capital required, coupled with increases in compliance costs and the impact of competition from new entrants, has raised questions about the long-term sustainability of many firms' business models. Cost-cutting may address issues in the short term, but in the long term, organizations may need to alter their business structures and operating models to lower cost enough to compete effectively.

Example:

The Bank Governance Leadership Network

Read more
 
Top

Our people

At EY, our purpose is to build a better working world. This starts with our people.

The exceptional experiences our people have at EY empower them to grow their careers and become purpose-driven leaders who make a difference in businesses, governments and communities around the world. Our clients expect us to bring multidisciplinary, high-performing teams to help them address their most critical challenges. And with the quality and commitment of our people, that's what we do.

Within EY EMEIA Financial Services, we are living some of the principles associated with a purpose-led professional services organization, with all the opportunities and challenges that entails. In this context, we need to focus on building a sustainable work environment and culture for our people against the background of rapidly changing business, demographic and social environments. Our concentration on engaging our people, the development and behaviors of our leaders and the culture of our organization all enable us to be innovative and agile as we face changing times. We don't get this right 100% of the time but we do believe we are selecting the stepping stones to build toward something exceptional — something that matters for our clients, our people and our communities.

Read more

Walking in our
people’s shoes

Because we believe that our people are the foundation of our successful business strategy, we have grown EY EMEIA Financial Services to an organization of almost 12,000 people across 14 countries.

We want to attract and retain people who are committed, motivated and engaged to achieve the ambition we have set as part of our purpose and vision.

Click for more Read more

An award-winning approach to recruitment in a competitive market

We were ranked a top-three employer among students by Universum. Universum is the global leader in employer branding, working with top universities, alumni groups and professional organizations to gather insights from students and professionals in 60 countries on how to attract and retain talent that fits their culture and purpose. We are committed to hiring a diverse profile of talent that represents the communities we serve. This means constantly looking for new sources of talent across all of our markets and, in conjunction, ensuring we are fully focused on issues such as the gender pay gap and our current employees' experience.

Example:

Removing degree classification from entry criteria

Read more

"All new recruits have friends working for EY and other companies. They listen very carefully to what these friends have to say and what they experience in their working environment. So I think excellent people engagement is key for recruiting as well."

André ten Damme, Financial Services Leader, Netherlands

A pioneering approach to performance management

Performance management has been in the headlines as many organizations review their processes. We continue to spend considerable time finding an approach to engage all our people in a way that focuses on career progression and open, honest and two-way conversations. We know we must have a culture of continuous feedback and conversation about our people's careers, development and performance. If we do this right, we will provide our people with the right environment to help them develop into purpose-driven leaders.

We remain committed to being innovative in the way we engage and motivate our people. For example, our 10° Program (which we are piloting in regions across the globe), adopts a promotion-readiness approach — and is not a traditional performance evaluation program. The program reinforces our career progression culture by strengthening and simplifying the connection between performance and reward, as well as by providing more opportunities for high-impact coaching. The feedback on the 10° Program has been positive as we move to a system that is less reliant on proxy ratings.

"I have found 10° makes open and honest career conversations more accessible. As the coaches developed into their role, they became increasingly confident at providing great developmental feedback."

Lucy Sharratt, Consultant, EMEIA Financial Services

A reward strategy that is transparent, fair and competitive

The landscape for reward is changing and there is a need to focus on what reward looks like for the future. Organizations are struggling to rebuild profitability following the recession. With revenue growth hard to come by, they are focusing on cost containment and performance improvement as the paths to profit growth. This requires them to balance four often conflicting challenges: cost containment, performance improvement, talent engagement and risk management. This has led to a marked increase in the oversight and governance of reward within many organizations.

In addition, with a mixed-generation workforce at its highest, meeting the demands of different generations is adding a level of complexity as well as new business areas and ways of working.

As a result, we continually revise our reward offering so that it remains competitive with those provided by other high-performing companies. The reward offering itself is divided into four key components:

  • Career development, which offers a range of coaching and learning, internal and external opportunities, and assignments and mobility experiences
  • A work lifestyle that allows our people to work flexibly while continuing to meet the commitments of our clients as well as their families and communities
  • A range of benefits for our people to choose from, which best support them and their families in their health and well-being
  • Compensation that aims to be fair and competitive, financially responsible, and an incentive for high performance

Our commitment for FY16 was to increase the level of transparency surrounding our reward strategy. We achieved this by improving communication with our people to help them understand the links between their pay and performance, through creating a reward booklet that explains how their total reward is calculated.

We also believe that it is in the interests of the organization and consistent with our values and culture to ensure that we have a fair and just pay system. We are firmly committed to the principle of equal pay between men and women, and also among ethnic groups, for comparable work. That's why each year we undertake a salary review across our 14 markets and apply rigorous checks at each stage of the process to ensure we are aligned with our strategy, including a complete gender pay review within each market.

Example:

United Kingdom and France

Read more

Better conversations that help our people connect and collaborate

We want to encourage our people to speak with one another and share ideas. To support this, we ran a "Jam," an online "Big Conversation" that allowed our almost 12,000-person-strong workforce to connect and collaborate across markets and ranks. It gave them a voice and a platform to be heard using a digital approach that pushed the boundaries of what was possible.

"I think that change can be very positive and we can embrace it. We need to evolve rather than be critical of change, and EY is giving us a chance to be part of the approach and create our own legacy. I was committed to embracing the Jam and encouraged my colleagues to make something of this, to express our ideas, come up with ideas and make the change happen."

Sara Carvalho, Manager, EY Portugal (Ernst & Young Angola, Limitada)

Addressing the career path needs of the future

The shape of our organization and what people want from their career is changing. People want to be valued for the skills they bring and not for the extent to which they conform to a predefined career path that may restrict those skills. At the same time, our business is growing to focus on areas of strategic importance, such as digital, analytics and cyber resilience. Therefore, we need to address the flexibility of our career paths and ensure we are valuing all the capabilities that people bring to the table. To this end, we are piloting technical professional careers for those with technical skills and capabilities. We are also looking to enhance the role of non-partner leadership to align with the increasing need for experience, and reflect the value that non-partners bring to our business.

Building our
future leaders

Our needs of leaders and leadership are changing. We are moving from a world of top-down only styles of leadership to more collaborative and conversational styles of leadership. In developing our next generation of leaders, we need people who understand our journey and display the behaviors that will enable our direction of travel. These people are collaborative, connected to the market place, believe in stewardship and legacy, and are accessible and proactive in their empowerment of and engagement with their people. This is not always easy and we need to support our leaders in making the transition.

Click for more Read more

A blueprint for growing our leaders

From the moment our people join EY, we aim to help them develop purpose-driven leadership skills: to lead inclusively, to encourage others to think differently and to ask better questions that lead to better answers for our clients' toughest challenges. Leadership at EY is our blueprint for growing leaders. We see personal leadership as a fundamental attribute. As such, we focus on helping all of our leaders at all levels to demonstrate presence, vitality and agility. To do this effectively, we are increasingly measuring our leaders on "how" they undertake their business as well as what business and activities they do. It is not sufficient in today's environment to focus on the numbers alone. At goal-setting time, individuals need to consider the "what" as well as the "how" of their goals, and at the end of the year, feedback needs to reflect both measures.

Learning and development—supporting a lifetime of learning opportunities

Our industry-leading learning and development programs provide our people with both professional skills and technical skills. We have specific development programs and milestone events that provide opportunities to grow at key transition points in our people's career.

Example:

Global NextGen; supporting our future leaders

Read more

"The (GNG) program has given me access to some of the most tailored and effective learning experiences I have had during my career. The program demands significant commitment, which can be difficult to manage at times, but the training, peer network and interactions with leadership that the program offers is hugely valuable."

Tim Hill, Executive Director, EY UK&I

Counseling that creates relationships based on trust

Counseling, which serves to guide, mentor and encourage our people around performance, career management, compensation and learning, has been shown to be a source of motivation. We found the number one retention predictor of our people is counselor performance and therefore we are concentrating on deepening the quality of counseling and developing a counselor accreditation program for implementation in 2017. In addition, we will increase the clarity of the role and responsibilities of counselors and implement a feedback method for assessing counseling quality.

Delivering on our promise to our people starts with our partners

Our partners play a unique role within EY — setting the right standards and leading by example. We are invested in helping our partners be their best selves because what they do matters. One of the ways in which we are supporting our partners to do this is through articulating and embedding behaviors that enhance our spirit of partnership. Legacy is also hugely important. All of our partners aim to leave the business in a better state than the way they found it and help to develop the next generation. We support our partners to build a legacy that lasts beyond their time at EY through our Partner Transition Program, which provides personalized retirement preparation for partners as they approach this major transition. The program offers active sponsorship from a senior partner, European-wide workshops to help partners navigate the transition with insight from industry experts and support from professionally certified coaches and market specialists. It also provides dedicated time for retiring partners to explore options and plan for their time after EY.

Example:

Meet Denise Larnder who took part in the transition program

Read more

Creating a collaborative, cross-border organization

Organizationally, we have to be able to work cross-border, be innovative and aim for success. We need to enhance the potential of our teams across all 14 of our markets, and we need a business that is collaborative.

Click for more Read more

Mobility that leverages the diversity of our global network

Having the highest-performing teams depends on our people's ability to work without borders and understand our business. We encourage international assignments and experiences through a variety of programs, including the EMEIA Mobility Pipeline and our New Horizons scheme. We also focus on all forms of career mobility and support people in sharing their knowledge and experience beyond their immediate teams wherever possible. Going forward, we aim to increase awareness of the programs we have and enable more people to access them.

Mobility can be a key reason for people joining an organization like ours. While the experiences mobility creates is undoubtedly beneficial to EY and the individual, it can also sometimes seem to slow down an individual's progression in the short term, and we are sensitive to this. However, in the longer term, mobility opportunities set the foundation for future leadership, and this is evident in the number of our people in leadership roles who have all had some form of mobility experience.

"For three months, as part of the Global New Horizon Program, I swapped my Swiss office location to explore the actuarial and insurance landscapes of Hong Kong and Tokyo. I worked on several interesting and challenging projects at subsidiaries of European and American insurers. The intense face-to-face client exposure provided me with an invaluable experience. Although the hours were long, I felt the vibe of Hong Kong as a city that never sleeps and brought back memories from my assignment that I will never forget."

Alexander Aeberli, Senior Consultant, Switzerland

Flexible working that centers on exceptional output and quality, not location

With a changing workforce demographic and a desire to give our people more flexibility, we implemented Workplace of the Future, which offers a different way of working, supported by technology that allows people to make more flexible choices about how and where they work. We implemented this because we recognize that we have a changing workforce: over 50% of our people belong to Generation Y. By 2020, this figure will increase to 85%.

Through a unified and global approach that combined the strategies of talent (HR), technology and real estate, we were able to implement new technology and real estate solutions such as virtual meetings, remote working tools and new open floors that lead to collaboration across our people.

While the infrastructure gives us the base to move to new ways of working, behaviors need to follow. Not everyone is comfortable with open plan working, and not all leaders are comfortable with people working at home. As with all change programs, shifting behaviors is the hardest component. To reflect this, the program is now transitioning to EY@Work, our initiative to provide modern office spaces that are designed around how to improve not just where our people work, but also how they work.

Example:

EY Switzerland signs Work Smart Charta

Read more

Successful team performance

We think about diversity and difference in its broadest sense — diversity is about all differences. We value and respect individual differences, not just those commonly used to define diversity, such as gender, ethnicity and sexual orientation, but also areas such as background, working style and education. Intentionally and explicitly, we focus on both diversity and inclusiveness. Inclusiveness is about leveraging these differences to achieve better results. It is about creating an environment in which people are able to bring their differences to work each day and contribute their best in every encounter.

Our strategy encourages action at both the organizational and the individual level:

  • Organizationally: We need to drive cultural transformation by taking several steps required to build a culture in which differences matter and all people feel and are valued.
  • Individually: We need to learn about, be aware of and value differences; we need to be role models and lead teams inclusively.

There is no silver bullet. We realize that we are on a journey and that change doesn't happen overnight, nor is change a straightforward process. What we do have is strong leadership commitment and resources dedicated to ensuring that we embed diversity and inclusiveness throughout the organization. However, transforming culture and behaviors is something that builds over time, and everybody in our organization needs to be aware of this shared responsibility.

Example:

Celebrating International Day of Persons with Disabilities

Read more

Women in Financial Services

We are a strong advocate for women in leadership, and through our Women. Fast Forward program, we are making a stand for advancing talented women into leadership positions. We recently surveyed banking and insurance leaders from 23 countries to understand how our industry is addressing the impacts of diversity and the advancement of women.

Read the full report

Our multi-award-winning method for diversity and inclusion

High-performing teams (HPTs) aim to provide teams with the tools and knowledge needed to perform at their best, including a range of broad-reaching self-service solutions and targeted high-touch experiences.

"Based on my personal experience and that of the core team, the feedback on HPT has been 100% positive. The importance of building the confidence in the group, being comfortable in sharing vulnerabilities and becoming more comfortable with one another has had a positive and long-term benefit on the account. The materials and the facilitation available to support the building HPT initiative are good and unreservedly recommended based on our account team experiences to date." - Jonathan Bourne, Partner, EMEIA Financial Services, UK

Example:

Women Athletes Business Network (WABN)

Read more
Top

Our communities

With the updated EY EMEIA Financial Services corporate sustainability strategy, we now have two clear ambitions for our communities:

We aim to:

  1. Build collaborations and sponsorships that enhance the "sustainability in financial services" dialogue
  2. Continuously grow as a responsible business through investment in the wider society and our own operations

These objectives enable us to focus our priorities on supporting entrepreneurs and the leaders of tomorrow in addition to building a financially inclusive society — all while managing our own footprint.

Read more

Enhancing the
dialogue

Our work in this area includes championing the SDGs, advocating for increased FinTech collaborations as well as supporting the financial inclusion community. This provides us with the opportunity to progress against our strategic community initiatives.

While our ambition in this area is strong, we recognize that this is something we have started to build on in FY16, and that we will continue to grow further in FY17.

Click for more Read more

UN Sustainable Development Goals (SDGs)

We see the SDGs as a real turning point for the world, and they naturally fit with EY's mission of building a better working world. Welcomed by the sustainable business community, the goals serve as an important milestone as we drive forward our efforts on corporate sustainability. As well as identifying the most relevant SDGs to EY Financial Services, we've been supporting the SDG Private Sector Advisory Group, as well as enhancing the dialogue on the business case for SDGs.

This year, we're pleased that EY renewed its relationship with the SDG Private Sector Advisory Group for another two years. Alongside other major business leaders, EY is supporting the fund to build a roadmap for how public-private alliances can provide large-scale solutions for achieving the SDGs. Through this, we hope to raise awareness of how private sector cooperation and collaboration is crucial to meet these goals, to support work on the ground and to help build a better future by 2030.

In addition, it's important that we're contributing to the conversation surrounding the SDGs. In the UK, we signed an open letter to the UK Government, alongside 80 other businesses, calling for the Prime Minister Theresa May to demonstrate the Government's commitment to delivering the SDGs in the UK and overseas. It's just one way we're using our voice and convening power in this area.

We've also been contributing to the debate around SDGs and their relevance for professional and financial services by engaging different UN agencies from the United Nations Institute for Training and Research to the United Nations Conference on Trade and Development and the United Nations Environment Programme – Finance Initiative, and our clients. We've been there, speaking and participating at events and conferences designed to drive this dialogue forward, from the SDG business case to integrating them into corporate reporting.

Through all these elements, EY is supporting how the SDGs recognize and give an international platform to highlight the role business can play in furthering sustainable development.

Further information

SDG relevance to business

Read more

EY FinTech Talent Program—learning from the innovators

FinTech innovation can be a powerful vehicle for increasing financial inclusion, improving productivity and mobilizing dormant capital for the benefit of the wider economy.

Our FinTech team is focused on helping FinTechs to scale up. We achieve this by providing EY member firm's services, tailored to FinTechs, and through leveraging our relationships across the financial services sector. Along with providing this support, we recognize the need to learn from FinTech innovators in order to respond to their needs most effectively.

As part of our commitment to providing high-quality career development opportunities to our people, we have established a program of secondments into the EY FinTech team and into FinTech companies themselves. In collaboration with Innovate Finance, an independent membership-based industry organization for FinTechs in the UK and Europe, we launched the EY FinTech Talent Program. The program has been piloted in the UK at the manager level, and it involves working with FinTech companies on a three-month pro bono secondment.

Participating FinTech firms have so far been recognized innovation leaders from across the banking and payments sectors. Each company in the program proposes a high-impact project in which the EY manager can work toward tangible results. Throughout the secondment, EY FinTech leader Imran Gulamhuseinwala provides ongoing support to the secondee.

Case study

Pockit

Read more

"The EY FinTech Talent Program is an exciting addition to EY's pro bono secondment programs, supporting high-growth FinTechs in their growth journey. Through the program, we are uniquely positioned to learn from high-growth FinTechs while offering our experience to build a better working world. A year after launching the program, we are delighted to see the impact the program has had on our people and the FinTechs."

Imran Gulamhuseinwala, Partner, EMEIA Financial Services, UK

Microfinance Network

Microfinance plays a significant role in providing sustainable livelihoods to disadvantaged groups all over the world. The provision of loans, savings and payment products for the underserved and unbanked populations is critical to promoting inclusive finance.

EY EMEIA Financial Services actively engages in this area through our Microfinance Network (MFN), hosting events with network organizations, such as the Inclusive Finance Network Luxembourg, European Impact Investing Luxembourg, NpM Platform for Inclusive Finance and Financial Inclusion Forum UK. We actively support clients involved in financial inclusion, such as microfinance institutions (MFIs), development financial institutions (DFIs) and microfinance investors (MIVs). We also provide strategic pro bono services to support financial inclusion.

The MFN team seeks to build trust in the area of financial inclusion by addressing key challenges that MIVs and service providers face.

In a recent interview, Professor Muhammad Yunus spoke with EY's Zaina Ahmed Karim about what EY can do to help find innovative ways to lend to the unbanked.

Interview

Professor Yunus, Nobel Laureate

Read more

Client protection in microfinance: The current state of law and regulation

Client protection has been recognized as an issue that should be addressed by the microfinance sector and its regulators, to ensure that microfinance can keep growing in a way that benefits clients.

Read the full report

The promise of microfinance and women's empowerment

The microfinance revolution has transformed access to financial services for low-income populations worldwide. Around 75% of the world's 200+ million microfinance clients are women. As such, access to microfinance offers economic empowerment for women.

Read the full report

Partnering with Positive Planet

Based in Paris, Positive Planet is an international nonprofit established in 1998 to contribute to poverty alleviation through the development of microfinance. Operating projects in more than 50 countries, its mission is to develop economic, social and environmental inclusion across the world in a fair and sustainable way. Its projects are aimed at giving access to financial services, education, entrepreneurship, markets, health, housing, water and sanitation, and clean energy to the greatest number of people, particularly the poorest and most needy, to promote the fulfilment of individual aspirations and potential for the benefit of future generations. Through its knowledge and experience, we support the skills development of various economic stakeholders in France.

"EY's collaboration with Positive Planet is a prime example of driving inclusive growth. Through engaging with Positive Planet's mission and providing skilled sponsorship, EY is increasing access to financial inclusion with a focus on entrepreneurship and empowering economic stakeholders in emerging markets. As a member on the board of directors, I'm proud to support the collaboration between EY and Positive Planet." - Isabelle Santenac, Assurance Leader for Financial Services, EY EMEIA and Positive Planet Board Member

Continuously grow
as a responsible
business

Our goal is to grow as a responsible business by investing in the wider society and our own operations. We aim to move beyond legacy notions of corporate social responsibility and toward shared and long-term value. Our aim going forward is to increase the dialogue for sustainability in financial services through strengthening our strategic collaborations with entrepreneurs, not-for-profits and the public sector.

Click for more Read more

The EY Vantage Program

Entrepreneurs transform economies and drive innovation. We understand that one of the most powerful impacts we can have is to help entrepreneurs grow and succeed, both at home and around the world. Through the EY Vantage Program, we work with the nonprofit organization Endeavor to provide support to high-impact entrepreneurs at no fee, promoting social and economic growth where it is needed most. Top-performing managers and senior managers work alongside high-impact entrepreneurs to address their businesses' biggest obstacles to growth. Vantage placements include projects, such as helping to evolve business plans, developing growth strategies, identifying and implementing process improvements for their front or back offices, and providing financial analysis. Throughout our work, we are driven to have the maximum possible impact by using our core competencies — our skills, knowledge, network and time.

In FY16, our EY EMEIA Financial Services business placed 22 Vantage Advisors across 11 countries. They delivered over 5,000 hours of pro bono work (equivalent to US$1.8m) to entrepreneurs. An additional 23 financial services employees supported the program remotely as virtual advisors.

Case Study

SYNAQ

Read more

Enterprise Growth Services

Enterprise Growth Services (EGS) is a global corporate social enterprise that extends our top people, services and experience to small and growing social impact organizations at accessible, not-for-profit rates. Our clients change lives in low- and middle-income countries by creating steady jobs and affordable access to education, health care, sanitation, off-grid energy and clean water. We send experienced employees to help our clients improve their resilience, profitability and growth prospects through tailored, hands-on, three-to-six month projects.

To date, EGS has worked with over 50 clients in 25 countries, affecting the lives of millions of the world's poorest and most marginalized people. We source many of the enterprises EGS supports through impact investors such as Acumen, a nonprofit that raises philanthropic capital to invest in companies and innovative ideas that tackle poverty on the ground.

Case Study

Jibu

Read more

Galen Welsch, Jibu's CEO, described working with EY as "a gamechanger," saying "EGS filled a skill set and experience gap that was crippling our capacity to scale. For the first time, we're able to make management and business model decisions that we were previously making blindly." Jibu is on track to create approximately 9,000 jobs and bring clean, affordable drinking water to a million customers a day by 2020. We're proud to have helped them and proud of Alex for taking the next step in his career by joining Jibu as their CFO.

Youth Business International

Around the world, 73 million young people are unemployed and 156 million young people live in poverty. Our work with Youth Business International (YBI) over the past five years supports young entrepreneurs on a global scale by strengthening the organization's network performance management and accountability process.

This year we hosted an interactive panel discussion on behalf of YBI to launch our latest joint report, Supporting young entrepreneurs: what works? The speakers, which included YBI's CEO Andrew Devenport, entrepreneur Daniel Cox of Brock Toys and Allan Ssembajjwe representing Enterprise Uganda, demonstrated that while there was a clear need for mentoring and effective training, also crucial were proper monitoring, evaluation and learning. The development and entrepreneurial sector needs to celebrate successes but also be honest, recognize failures and learn from these together.

To support YBI further, we commissioned a joint report with YBI to create an evidence and learning review, drawing on the global EY network. The report seeks to address the gulf in evidence of what works best when provisioning support for young entrepreneurs in different social and economic contexts.

Supporting Young Entrepreneurs: What Works?

An Evidence and Learning Review from the YBI network

Read the full report

"By working with YBI, we offer a highly gratifying experience, both professionally and personally. The collaboration provides development opportunities from our top-performing people to work alongside YBI and its members."

David Lindop, Financial Services Advisory Partner, UKFS

Entrepreneurs Only! Understanding digital transformation

From June 24 to 26, 2016, we invited 50 members of our Entrepreneur of the Year (EOY) network to the annual "Entrepreneurs Only!" weekend in Berlin. Innovative founders of digital startups and experienced entrepreneurs exchanged ideas and discussed disruptive concepts as well as the potential challenges of digital transformation for established companies.

"Digitization offers companies the opportunity to increase the efficiency of internal processes, to optimize business models and thus to increase revenues. And last but not least, it can result in entirely new business models. The constructive exchange with young digital entrepreneurs is essential in this context as creative and disruptive ideas of startups can reveal new possibilities to established companies." — Peter Lennartz, Head of EY Startup Initiative in Germany, Switzerland and Austria (Ernst & Young GmbH Wirtschaftsprufungsgesellschaft and Ernst & Young AG)

"The panel discussions have shown how fast changes and innovations take place. Seemingly well-established products and companies can disappear from one day to the other. The opportunities for entrepreneurs have never been better! I believe that our North German ethos fits perfectly into this future. We are always open to new things. And this makes me proud." — Ulrik Ortiz Rasmussen, Founder and CEO of Rail & Road Protec GmbH and finalist of the German Entrepreneur of the Year Award, 2013

Social Business Trust

EY EMEIA Financial Services is a founding member of the Social Business Trust (SBT) charity. SBT helps one million people in need across the UK through an innovative collaboration using professional skills for social good. SBT supports high-growth potential social enterprises to scale-up their impact using the skills of top business professionals, with remarkable results. In the six years that we have supported SBT, more than 100 employees have given nearly 9,000 hours of professional support across 21 social enterprises in areas including business planning, financial modelling and customer services. Those social enterprises are pioneers tackling some of the UK's most pressing social issues, from educational disadvantage to elderly isolation. All have already achieved at least £1m in annual revenues, largely from trading rather than fundraising, or are on track to do so. With SBT's help they can grow to help many more people in need.

How are our people helping?

  • Julian Broughton, Executive Director, Transaction Tax, UK has taken on the role of investment director for a youth homelessness enterprise, Step by Step. Julian heard about the opportunities to get involved after SBT presented at an event earlier this year.
  • Janika Parmar, Senior, Performance Improvement, UK arranged four "Voice of the Customer" challenge days for teams of EY people to help social enterprises I CAN, Brightside, User Voice and Twining Enterprise to better understand their customers and improve their customer experience offering.
  • Chris Scott, Senior, Valuation and Business Modelling, UK undertook a three-month secondment to Shakespeare Schools Festival to carry out a review of their pricing strategy.

"We're incredibly grateful to everyone from EY who contributes to what we do. It's a fantastic achievement!"

Adele Blakebrough, MBE, Social Business Trust CEO

Our markets, our communities

Across our 14 markets, we are working to foster sustainability within our communities. From facilitating relationships between large corporations and refugees to working with young people to improve social mobility, we're continuing our purpose to build a better working world. In FY16, 9% of our people volunteered (FY15: 7%) for 15 hours per volunteer (FY15: 11 hours). Our community investment metrics include our EY Vantage Program – the inclusion of virtual advisors in FY16 reporting accounts for the year-over-year increase.

Example:

Refugee work in Germany and Austria

Read more

Example:

Social Mobility Business Compact champion status in the United Kingdom

Read more

Our operations

We challenge ourselves everyday to reduce the impact of our operations on the planet as part of our effort to be good environmental stewards.

As a professional services organization, our key direct environmental impacts are related to travel and real estate rather than goods and services. As such, our environmental focus centers on monitoring, managing and reducing our travel emissions and improving the efficiency of our buildings year-over-year. Indirectly, the services we provide to our clients also have an impact on the environment, as we support them in reducing their footprint.

As part of our refreshed sustainability strategy, we are making every effort to monitor and manage our environmental footprint. We continue to review all aspects of our activities, including client engagements that may require travel.

That said, managing our environmental footprint for EMEIA Financial Services remains a challenge, particularly given that the responsibility for implementing initiatives is at the individual market level. Further, one of the benefits of being one business unit is that it enables us to offer the right resources in the right place at the right time to our clients, meaning that employees can travel among the host markets with ease and are often working on international assignments.

To monitor, measure and manage our carbon footprint, we continue to work with our markets to improve data collection. Partway through FY16, we began the rollout of a new global management system. This was not without its challenges. The system affected our data collection abilities and resulted in us estimating 9% of the carbon footprint. Detailed footnotes of this impact can be found in the performance snapshot.

Update

About our carbon footprint

Read more

Update

Influencing our carbon footprint

Read more
Top

Amid the challenges of a changing world lie business opportunities to innovate and grow

Sustainability is an escalating issue in financial services. When I talk to business leaders, I hear that they are now addressing not only the material financial and regulatory impact, but also the environmental and social aspects of their organizations.

The challenges ahead

We have a chance to restore trust and build confidence with society. And we're seeing clients make huge strides in this area, and benefiting from engaging with sustainability. It's not just with our clients, regulators are also driving this agenda forward. For example, the European Parliament now requires workplace pension funds to integrate environmental, social and governance (ESG) factors into investment decisions. Businesses will have to consider ESG issues as part of their fiduciary duty to pension fund shareholders.

Our sustainability journey

At EY, we have a clear purpose: building a better working world. We fulfill our purpose through the services we provide. We help businesses seize economic opportunity as well as bring transparency around the impact of what they do.

Digital disruption is here, and it's now the top issue in our materiality analysis. Terms like "FinTech," "robotics" and "artificial intelligence" are becoming part of our everyday language. These innovations present challenges, and we are ready and able to help our clients seize the upside of disruption. We see real opportunities to transform finance and embed social impact into the fabric of the financial system. An example of this is emerging blockchain technology and peer-to-peer platforms that have opened the door to bringing financial products to the unbanked population.

Our purpose is rooted in our people — in the way we behave, develop leaders and make a difference in businesses, governments and communities. Diversity and inclusiveness are key to achieving this.

  • Last year, our new partner intake was 21% female and 20% Black and Minority Ethnic. Our longer-term objective is to achieve the target levels of representation on both our leadership teams and within our wider partner population.
  • We increased our positive employee engagement score from 67% to 69% last year and aim to increase this year-over-year.
  • We continue to attract the top talent. We're proud to be number three in Universum's list of most attractive employers in the world for students.

Within our communities, we want to continue to build the right collaborations to support inclusive growth and increase the dialogue around sustainability. One example is our focus on escalating the UN Sustainable Development Goals (SDGs) to mainstream financial services. With our convening power and our industry relationships, we can support stakeholders in their efforts to contribute to the SDGs and transparently measure and report on progress. One way we connect with our communities across EMEIA is through our people. In financial year 2016, our people spent almost 16,000 hours volunteering, and we contributed US$1.12 million to our communities.

We're making progress on our journey, but we know we still have more to do. I'm truly optimistic about what lies ahead. The varied societal challenges we face provide us and the industry with opportunities to innovate and positively disrupt as we continue to build a better working world for our clients, our people and our communities.

Marcel van Loo

Regional Managing Partner,

EY EMEIA Financial Services

Close

Credit Suisse moves quickly to meet new regulatory requirements

In the aftermath of the 2008 financial crisis regulators crafted a number of new regulations to address the systemic risk that the crisis uncovered. One such requirement was a recovery and resolution plan (RRP) – a "living will" that provides a detailed analysis of a company's business and organization so that in the event of failure, the company could effectively orchestrate its dissolution.

Wanting to restore public trust and confidence among their customers around the world, Credit Suisse moved quickly to meet new regulatory requirements.

"The LEP involved major projects in New York, London, Dublin, Zurich and Singapore, but our approach to serving Credit Suisse is never by region. Our attitude has always been: what are the business critical issues that Credit Suisse is trying to resolve, and how can we support that?"

EY spokesperson

EY worked with Credit Suisse senior executives to develop a global RRP in eight months. EY deployed a global team of more than 100 people to Zurich, London and New York to help develop a document that went to the heart of Credit Suisse's business — its complex interdependencies, global reach, customer relationships, legal entity structure and future direction. Through our collaborative efforts, Credit Suisse developed a detailed report that met current and future regulatory requirements.

Once we had completed the RRP, we worked with the bank on its Legal Entity Program (LEP) in an effort to better align its investment banking business to the region in which it originated to help insulate it from future crises. The project, which deconstructed Credit Suisse's balance sheet, also considered the tax implications, as well as the regulatory requirements of the US, the UK and Switzerland — all without disruption to Credit Suisse's daily operations.

Close

The Bank Governance Leadership Network

The Bank Governance Leadership Network (BGLN) is an elite network of nonexecutive directors from the world's largest banks. Sharing the latest perspectives on bank board governance, the BGLN provides a peer-to-peer platform for discussion of critical and complex issues facing the industry. With a primary focus on the nonexecutive director, the network also engages senior management, notably chief risk officers, and regulators. Created by Tapestry Networks and EY, the BGLN presents a unique opportunity for candid dialogue among nonexecutive directors from leading global banks, bank executives, regulators, policymakers and other stakeholders through private roundtable discussions.

Read the report on building sustainable models for banks and their investors here.

Close

The National Equality Standard

EY People Advisory Services know equality, diversity and inclusion.

The National Equality Standard (NES) is a groundbreaking initiative developed for business, by business. It sets clear equality, diversity and inclusion (EDI) criteria against which companies will be assessed. Developed in collaboration with EY and several other leading cross-sector organizations, the vision is for the NES to become the accepted standard for businesses across the UK and make a lasting impact on the way equality, diversity and inclusion are embedded into everyday business.

We worked with a major global bank to help them define their EDI goals, develop suitable targets and identify key performance indicators and approaches to managing progress. This project was based on extensive research into the organization's practices and ways of working and through developing an understanding of other similar approaches. The team developed a tool that facilitates an integrated EDI audit cycle and drives accountability for consistent progress across the organization.

Close

Incorporating ESG issues into business strategies

We continue to help our clients incorporate ESG issues into their business strategies. Our member firm in the Netherlands has been particularly active in this regard. Initiatives include:

  • Engaging client with a global asset manager to define strategy for impact investing and impact measurement, and then linking strategy to the SDGs
  • Providing assurance over impact models of banking institutions with respect to carbon emissions
  • Supporting a Middle East financial institution's integration of ESG into their investment policy and procedures, and becoming UN Principles for Responsible Investment compliant
  • Providing assurance over, and measurement models for, several impact investing funds, microfinance institutions and microfinance investment vehicles
  • Hosting a number of marketing events that focused on green bonds
  • Organizing microfinance events together with the Netherlands Platform for Financial Inclusion
  • Sponsoring the Impact Capital Summit Europe event in The Hague in March 2016 and March 2017, and providing keynote EY speakers
  • Organizing a workshop on impact investing and impact measurement models for a global asset manager

Close

Integrated reporting

A large multinational financial services organization wanted help not only with assurance on their sustainability disclosures, but also with assessing gaps in their integrated reporting. The organization asked us to perform a gap analysis of its annual review against the integrated reporting (IR) framework published by the International Integrated Reporting Council (IIRC).

We conducted a gap analysis to evaluate the current reporting maturity of the organization's annual review report against the requirements of the IR framework. The gap analysis revealed the level of effort needed to further implement the requirements of the IR framework. On the basis of the gap analysis, we helped the client to identify both short-term improvement areas and long-term opportunities, providing leading insight into integrated reporting from our involvement within the IIRC.

Close

5: Gender Equality:

We are recognized as a leader in gender diversity. We have specific policies, networks and training to enable all individuals, regardless of gender, to succeed.

8: Decent Work and Economic Growth:

Our financial services business has programs that support equal-opportunity student recruitment, including apprenticeships, entrepreneurship and innovation, and small and medium-sized enterprises.

10: Reduced Inequalities:

The success that we have with gender equality extends beyond gender to equality in the broadest sense. Having a truly diverse workforce enables us to develop relevant offerings for clients and provide exceptional client service.

13: Climate Action:

We monitor and manage our operational footprint and, arguably more importantly, we work with our clients to address the risks of climate change. We frequently publish thought leadership on the topic to raise awareness.

16: Peace, Justice and Strong Institutions:

We have governance, policies and training in place regarding issues such as antibribery and corruption as well as transparency. At a minimum, we believe all organizations should be operating with this SDG embedded throughout the business.

Payment Services Directive 2 (PSD2) and the UK's Open Banking Initiative

Regulation presents an opportunity to plough a new furrow in an existing business, either to help overcome a compliance challenge or to fill a new service role. Retail banking is being actively disrupted by regulators who, via the EU's Payment Services Directive 2 (PSD2) and the UK's Open Banking initiative, are forcing the incumbent firms to open their application programming interfaces to third parties. FinTechs will be able to gain permissioned access to client account and transactional data, and can then offer services directly to bank customers, including services that compete directly with the banks, such as payments.

Watch our webcast on PSD II – The essentials for financial services firms here.

Close

Removing degree classification from entry criteria

This year in our EY UK & Ireland (Ernst & Young LLP) business, we removed the academic entry criteria for applications to school leaver, undergraduate and graduate programs —removing a potential barrier to talent. As a result, the UK&I member firm saw a 49% increase in applications, with 15% of the applicants progressing through to the assessment level that would not have been eligible to apply to under the previous system. Thanks to this change, as well as to work done on our apprenticeship scheme and to programs such as the EY Foundation's Smart Futures, the UK&I member firm was recognized by the UK Government as a Social Mobility Compact champion, one of 11 UK companies to achieve this recognition, showcasing our commitment to opening the world of work to young people of all backgrounds.

Close

United Kingdom

In 2016, our UK&I member firm established a remuneration committee (RemCo) to review the current reward strategy for its financial services practice and establish a reward framework that supports the business in meeting its Vision 2020 objectives. The responsibilities of the RemCo broadly include:

  • Identifying a reward strategy, framework and principles
  • Identifying fair and transparent procedures and approvals
  • Developing annual pay review guidelines and providing oversight of the outcomes
  • Reviewing the effectiveness of our reward strategy, framework and principles, and making recommendations for improvement

In its effort to fulfill our commitment of equal pay for comparable work between men and women, and also among ethnic groups, our UK FS practice aims to have at least 30% female and 10% Black and Minority Ethnic (BME) representation in our new partner intake, measured over a rolling three-year period. In the last financial year, 25% of our internal admit partners were female, and 14% BME. Likewise, 13% of our direct admit partners were female and 33% BME, making the one-year new partner intake 21% female and 20% BME. Our longer-term objective is to achieve the target levels of representation on both our leadership teams and within our wider partner population.

France

In 2016, EY France acquired a benchmarking tool that enables it to verify the compensation packages for current employees and to attract key talent from the market. The crowdsourcing tool provides instant access to real-time and accurate compensation data, allowing EY France to understand its competitive position within the market, and helping it to make better informed decisions around recruitment and retention.

Close

Enhancing leadership and go-to-market capabilities through Global NextGen (GNG)

Global NextGen (GNG) is a program that focuses on enhancing leadership and go-to-market capabilities. During the 17-month program, participants comprising senior managers and directors are provided with experiential-based learning to prepare them for the next steps in their careers. Access to leadership and working on real-world challenges facing our business are cornerstones of the program. In 2016, 48 people participated in this program, selected by their market leadership based on performance and potential.

Close

EY Partner Transition Program

Denise Larnder is a highly experienced former EY partner focused on insurance and pensions. She has excelled throughout her career in her client delivery work and has extensive board and committee experience. Through the Partner Transition Program, Denise has been able to complement her industry knowledge and technical expertise with specialist coaching from external providers to work toward her post-EY career. She has drawn on and extended her network, in addition to using her experience to equip her with the skills to deliver in new roles as a trustee and as the audit committee chair at the University of Greenwich.

"I have always been enthusiastic about working in the community and tackling diversity in financial services. The Partner Transition Program has given me the focus and the support to pursue this, and connect this to my career post-EY." – Denise Larnder, EY Former Partner

Close

EY Switzerland signs Work Smart Charta.

Work Smart Charta is another step toward demonstrating our commitment to creating a flexible and engaging working environment for our people using modern resources and infrastructure. Work Smart aims to transform the Swiss economy through implementing a companywide initiative that aims to actively promote flexible working methods.

Close

Celebrating International Day of Persons with Disabilities

The inclusion of people of differing abilities is part of our DNA. One of our founders, Arthur Young, was deaf and had low vision. He originally trained as a lawyer, but his disabilities made it difficult for him to practice in the courtroom. So, he turned to the new field of accounting to use his skills and training in alternative ways. He became an entrepreneur and innovator, not despite his disabilities, but because of them.

Inspired by this story, we've been working to create an environment in which we maximize the potential of all our communities and create an exceptional career experience for all our people.

To mark the International Day of Persons with Disabilities, we held a non-sight challenge for our people to experience the challenges that non-sighted individuals face in the workplace. People in our offices in Paris and London got the chance to wear an eye mask so they would be totally without their sight while taking part in one of their everyday activities. This exercise provoked conversation, thinking and debate about what it is like to have a disability.

"I think these initiatives are really important to us as an organization. And I am particularly aware that it's easy for people to start thinking about labels, and the word disability is bandied around. One of the things that we have been really keen to do is to focus on abilities and the different perspective that all of our people bring, and hence the name 'Ability EY' (network)." Rupert Taylor, Partner Sponsor for Ability EY, EMEIA Financial Services UK&I

Close

Women Athletes Business Network (WABN)

In August 2016, we announced that we would hire eight women athletes from six countries as part of its commitment to leave a positive and lasting legacy from its support of the Rio 2016 Olympic Games. Through its Women Athletes Business Network (WABN), we are helping to harness the leadership potential of these athletes by supporting them through a progression from sport to business. Olivia Carnegie-Brown of Great Britain, a 2016 Olympic silver medalist in rowing, was one of the athletes selected. Like the other athletes chosen, Olivia participated in a comprehensive recruitment process in collaboration with Athlete Career Transition (ACT) for the six-month internship. Running from October 2016 to March 2017, the new WABN Intern Program will be a valuable addition to the already strong offering we provide to elite female athletes.

"The EY internship is a huge opportunity for me to build on my successful Olympic rowing career and silver medal in Rio. To be part of this groundbreaking program with EY and ACT was something I had to go for. I'm certainly going to be outside of my comfort zone initially, but isn't that what life is about — pushing yourself? I'll have amazing support and mentors around me so it's now down to me, and I'm really looking forward to the challenge of a business environment." — Olivia Carnegie-Brown, Brand and External Marketing Intern, EMEIA Financial Services, UK

Close

People

If we are to achieve the ambition we have set ourselves for 2020, we will need people who are committed, motivated and who are engaged. For them we need to create an exceptional career experience.

Leaders

We need leaders who display the behaviours that will enable our direction of travel; who are collaborative, connected to the market place, believe in stewardship and legacy and who are accessible and proactive in their empowerment of and engagement with their people.

Organization

We need an organization that can work cross-border, be innovative and shoot for success (and allow for inevitable failures), that leverages high performing teams. We need a business that is collaborative and creative, agile and flexible, drawing on the strengths and talents of all of its communities.

Our people and sustainability

In addition to being the foundation of our business, our people are the enablers of our refreshed sustainability strategy — a twofold commitment to raise engagement via learning and communications, and to make sustainability an integral part of development. To do this, we have big ambitions to:

  • Focus on increasing awareness and understanding with our leadership
  • Integrate sustainability into everything, from recruitment to career progression, KPIs and development programs
  • Confirm our culture embeds sustainability into the everyday, celebrating our successes with and of our people, and pushing ourselves to do better each time

Close

SDG relevance to business

Why are SDGs relevant for business? The simple answer is that the world is changing. The world is facing finite natural resources, dwindling biodiversity and ecosystems, a digital revolution, and an increasingly urbanized and migrating population. Business both impacts and is impacted by these global trends. Organizations are no longer expected solely to be economically sustainable. They must now be environmentally and socially sustainable as well.

According to EY's Tomorrow's Investment Rules 2017, 60% of investors believe companies do not adequately disclose ESG risks. Integrated reporting can provide a holistic framework to support this – but companies must ensure the reliability of their nonfinancial reporting.

Sustainability, ESG and corporate ethics are issues especially important to millennials, who are changing the landscape of the working world as we know it. Millennials don't want to work for organizations that exist only to make a profit. They want to work for businesses that have values. Businesses that make ethical decisions, have responsible supply chains, value human rights, are environmentally conscious and active in the communities where they do business. Given that millennials will make up much of the workforce by 2030, businesses will need to find new ways to attract, retain, engage and motivate these employees.

The financial services industry should think of the SDGs, not as another check-the-box exercise, but as a potential business opportunity that forms a fundamental part of their business strategy and culture.

Close

Pockit

As part of the EY FinTech Talent Program, Michael Heap, a manager in EY's Audit service, worked with Pockit during a three-month secondment on the implementation of a new online banking platform, including faster payments, direct debits and remittances. The work included product development, internal and external coordination, and development of a marketing strategy. Michael worked with finance to establish KPIs for the business and to develop cultural values; he also worked with third parties involved in the provision of remittances while keeping the project team and CEO up-to-date on progress.

Pockit's aim is to be the "world's most inclusive bank," providing services to those currently without access or who are underserved. According to Pockit research, between four and eight million people in the UK either do not have a bank account or are poorly served by large retail banks. Lack of access often means missing out on advantages such as direct debit payments and lower online prices. It also means needing to deal with cash in an increasingly cashless world, and it makes managing finances much harder and more expensive.

Close

Professor Yunus, Nobel Laureate

Professor Yunus established the Grameen Bank in Bangladesh in 1983, fueled by the belief that credit is a fundamental human right. His objective was to help poor people escape from poverty by providing loans in terms suitable to them and by teaching them a few sound financial principles so they could help themselves. From Dr. Yunus' personal loan of small amounts of money to destitute basket weavers in Bangladesh in the mid-1970s, the Grameen Bank has advanced to the forefront of a burgeoning world movement toward eradicating poverty through microlending. Today, replicas of the Grameen Bank model operate in more than 100 countries worldwide.

What do you expect to be next for the microfinance industry? What role do you see for traditional financial services?

"Microfinance is a financial system designed for people who are rejected from the system. Conventional banks will never be able to address this population because their business model is not designed to deal with the poor. As inequality grows, there is a requirement to address this gap (i.e., Grameen Bank, Microcredit). But doing so will mean moving away from the current NGO delivery model that relies on donor's money and toward creating 'banks for the poor'"

What are your views on the potential influence of the digital revolution on microfinance and financial inclusion?

"Technology will be key to financial inclusion and accelerating growth for the microfinance industry—whether it is microcredit or some other form of finance solution."

At EY, one of the three pillars of our community investment strategy is supporting a financially inclusive society. What is your view on how we can approach this?

"Professional services organizations like EY should challenge their clients and the status quo regarding the people they lend to. Ultimately, we need a behavioral shift. Inclusiveness can only be achieved by not leaving behind those who should be included."

Close

SYNAQ

Can an entrepreneur increase profit by increasing salaries?

During her time working in Advisory in London, EY Manager Sandra Ool, now with Sweden (Ernst & Young AB) helped the founders of SYNAQ set the tone for the future by creating a compelling people proposition for existing employees and potential recruits.

SYNAQ, based in Johannesburg, provides email solutions and cloud services to the South African market. They needed a review of their operating model to identify operational inefficiencies that would have a negative impact on their expansion strategy. SYNAQ also wanted to enhance its employee compensation plan to better align with their growth strategy.

Just as Sandra's six-week placement began, a co-founder resigned after 11 years. Undeterred by this development, Sandra used it as an opportunity to be innovative and creative in her suggestions. With her project and change management skills, Sandra brought a blend of industry knowledge and business transformation experience. Leveraging this, she guided SYNAQ through an executive role change plan, significantly reducing the board's and management's sense of uncertainty. Sandra also provided invaluable experience and change recommendations, including raising the base salary to retain and motivate the current talent pool as well as introducing a benefit package with a pension and medical aid provision from the company. SYNAQ is now able to pursue their strategic goals with a solid foundation.

Close

Jibu

Every minute of every day, a child dies from the effects of poor sanitation and dirty water. Jibu are attacking the problem with a sustainable solution, by providing entrepreneurs in East Africa with the equipment and support they need to run franchises which supply clean, affordable drinking water to low-income populations in dense urban environments. Working closely with colleagues from EY Uganda (Ernst & Young), Alex Paur, from our Zurich office, spent five months helping Jibu design and establish the franchise model which has enabled them to grow at the rate of two new businesses a week across the region.

Read our report on innovative approaches to overcoming structural challenges to provide clean water here.

Read more about how together we're changing the way the world tackles poverty here.

Close

Refugee work in Germany and Austria

In Germany and Austria, we are helping to bring companies, governments and refugees together to help integrate refugees into the labor market and improve their quality of life.

EY Germany continues to work closely with the Charta der Vielfalt and the Federal Chancellery in bringing together Germany's largest companies as well as leading politicians and representatives of civil society with the refugee community. Together, we aim to find solutions to integrate refugees into the German labor market. In December, we hosted a fourth roundtable meeting with more than 50 participants to find effective solutions to the challenges posed by labor market integration. Future meetings will focus on presenting solutions for job market preparation, job applications and cultural integration within companies. In addition, we will focus on an expansion of our roundtable project to other countries and share our leading practices.

Through the EYcares foundation, EY Germany is helping refugees and other victims of war and political, racial and religious persecution. One of the first causes being supported is the Lugha Integration, a language learning app being developed with voluntary support from EY employees for refugees in for refugees in Germany, Switzerland and Austria.

EY Austria is supporting the Österreich Hilfsbereit Foundation, which, together with the Red Cross, aims to create additional living space for asylum seekers. We have spearheaded several donation campaigns and is making a substantial contribution to building refugee homes in Salzburg.

Through the 10,000 Chancen initiative, we are bringing together Austrian companies to create 10,000 jobs for refugees. Mittelstand und Flüchtlinge, an EY study, found significant support among companies to hire refugees, and, to support action on this, we provide 10,000 Chancen with knowledge, organizational support and our business network.

Over 900 employees provided over 3,000 hours of paid working time within a 16-month period, to assist initiatives including refugee aid. In order to make this assistance possible, employees were free to decide which initiatives they wanted to work with.

Close

Social Mobility Business Compact champion status in the United Kingdom

We are leading the way in opening up the world of work for young people from all backgrounds and helping to improve social mobility. For our efforts, EY UK&I was one of 11 companies in the UK to achieve Social Mobility Business Compact champion status, awarded by the Department for Business, Innovation and Skills.

Key factors in making the grade include:

  • Transforming student recruitment: In August 2015, we removed the academic entry criteria for applications to our school leaver, undergraduate and graduate programs. We have since seen a 49% increase in applications.
  • Apprenticeship scheme: During National Apprenticeship Week, we announced a new scheme that opened up 200 places to school leavers from September 2016. Each apprentice will join with a starting salary of up to £21,500 and have the same career path and opportunities as those in our graduate program.
  • EY Foundation programs: EY UK&I's outreach and access programs, such as Smart Futures and Our Future, managed by the EY Foundation, have provided disadvantaged young people with work experience and the skills training necessary to succeed in the workplace regardless of sector or ambition.
  • Understanding our workforce: EY UK&I has introduced social mobility into our procurement process and taken steps to understand the makeup of our existing population so that we are providing the right opportunities for all our people to succeed.

"Achieving Social Mobility Champion status is testament to the strides we have made in creating a working environment where everyone has the opportunity to thrive. A collective approach with our peers, other employers and Government will help to achieve greater social mobility for Britain's young people." – Mandy Love, Partner Sponsor for Social Mobility, UK

Close

About our carbon footprint

In FY16, our emissions remained the same at 3 metric tons CO2e per full-time employee, but our absolute carbon footprint increased by 26%. The reasons for the absolute increase are threefold:

  • A change in the source of non-UK emission factors: The Department for Environment, Food and Rural Affairs (DEFRA) is no longer providing emission factors for non-UK markets; these are sourced from the International Energy Agency (IEA). The IEA emission factors are, on average, higher than the DEFRA emission factors for EMEIA Financial Services markets, and, therefore, associated carbon emissions will be higher due to this factor alone.
  • An increase in data scope: EY fleet (Scope 1) data was available in some markets for the first time. Including this in FY16 makes a direct comparison with the FY15 Scope 1 data difficult. Data coverage will continue to improve as the reporting process matures.
  • Increase in headcount: Across our business, market-level headcount grew by 9%. In some markets the headcount increase was as high as 18%. Absolute emissions have increased accordingly.

Close

Influencing our carbon footprint

In an effort to manage our carbon footprint, we are working to establish relative air travel emission targets in our key markets. Air travel is 89% of our Scope 3 emissions and 67% of our total carbon emissions.

We also continue to implement EY@Work. This transition aims to provide modern office spaces that are designed around how people work, not where they work. This effort is supported by the latest technology, design and environmental standards. Our financial services headquarters in London has already moved to an EY@Work design and includes energy-saving features expected to achieve a 30% reduction in CO2 emissions, over and above 2010 building regulations. Madrid and Milan have also implemented EY@Work, with plans for other offices to migrate over the course of the coming years.

Close

These goals still align with our refreshed global corporate responsibility strategy to focus on two key issues that support our ambition to continuously grow as a responsible business:

These are:

  • Driving inclusive growth
  • Supporting the next generation

Close