Zielke Research Consult GmbH – Navigating Regulatory Challenges and Empowering Financial Institutions through Innovative ESG Solutions and Transparent Reporting Practices

Zielke Research Consult GmbH is a dynamic consultancy based in Aachen, Germany, with a clear mission: to guide financial institutions towards sustainability while navigating the complex landscape of regulatory and accounting challenges. Led by Carsten Zielke, a seasoned expert with a wealth of experience in the financial sector, including a distinguished tenure as a former member of the EFRAG TEG, the team at Zielke Research Consult is dedicated to driving positive change.

Specializing in asset-liability management, ESG analyses, and financial reporting, Zielke Research Consult provides tailored solutions for insurance companies, banks, and institutional investors. Armed with a team of experts and over two decades of experience, Zielke Research Consult offers bespoke solutions to its clients, tailored to meet the demands of an ever-changing regulatory environment.

Carsten Zielke, CEO of Zielke Research Consult GmbH, spoke exclusively to CIO Bulletin about how his company is empowering clients to harness the power of finance for the greater good.

Interview Highlights

Q. How has Zielke Research Consult GmbH adapted to market trends and regulatory shifts over its 11 years in asset-passive management, and what strategies have proven successful in maintaining continuity and achieving success in the financial world?

We have proven a proactive approach to adapting to market trends and regulatory shifts. When Solvency II suggested avoiding investments in equities, we advised our clients to do the opposite. This contrarian stance enabled us and our clients to capitalize on opportunities that others overlooked. When new regulatory debates arose, instead of passively reacting, we actively engaged and became involved at regulatory and government levels. By participating directly, we gain valuable insights into upcoming regulatory shifts. Adapting our business model depending on the ever-changing regulatory landscape ensures that we remain in an advantageous position.

Q. Zielke Research Consult GmbH offers a range of products and services tailored to the needs of its clients. Could you provide an overview of the key offerings available, and how they support financial institutions in achieving their sustainability and financial reporting goals?

Through rigorous analysis and benchmarking we try to bring our clients to the top of sustainability and risk reporting. Assessing the quality of the reports, providing actionable insights, identifying strengths and areas for improvement are tools we use to empower financial institutions to elevate their reporting standards and thereby enhance their transparency and credibility in the eyes of stakeholders. Creating Benchmarks is a critical step in our approach. Comparing reports against their competitors, the industry standard and best practices provide a comparative analysis that not only highlights areas of excellence but also areas needing attention. This helps guide clients towards continuous improvements in sustainability and risk reporting.

Zielke Research Consult also offers certification services for financial products based on their sustainability features. This certification process ensures that financial institution products meet established sustainability criteria, providing stakeholders with assurance and protection against misleading “greenwashing” claims. Our products and services are strategically designed to support financial institutions in their pursuit of sustainability and financial reporting goals. Through evaluation, benchmarking, and certification, we assist clients in enhancing the quality of their reporting, differentiating themselves in the market, and contributing to the advancement of sustainable finance practices.

Q. How does Zielke Research Consult GmbH’s unique approach align with European regulatory standards, and how does it ensure maximum security and transparency for clients?

By certifying financial products in accordance with the EU taxonomy and the German DIN-Sustainability Score, we ensure alignment with established European regulatory frameworks. Our evaluation is based on the data currently available from companies’ compliance with the new requirements of the Corporate Sustainability Reporting Directive (CSRD). With both the data utilized and the methodology employed being publicly accessible ensures transparency that allows clients, regulators, and other stakeholders to scrutinize the process and results, ensuring accountability. To further enhance transparency and accessibility we publish the results in a public sustainability register. This register serves as a repository of certified financial products, rated companies, and other relevant sustainability-related information.

Q. Zielke Research Consult GmbH is known for qualifying financial products as sustainable within the SFDR framework. Can you discuss the criteria and methodologies used in this qualification process, and how it benefits your clients in aligning with sustainable finance goals?

We investigate each investment and match the information found with the EU taxonomy criteria (eligibility and alignment). If the activity is not deemed eligible, we assess its environmental impact. This assessment includes evaluating whether the activity has an adverse effect on key environmental objectives such as climate change, biodiversity, use of water resources, pollution, and recycling. Additionally, we check for compliance with human rights standards and identify any significant controversies associated with the activity. For social investments, the same rigorous evaluation process is applied, with an added focus on verifying the presence of a valid social goal. Upon completing the assessment process and reaching a positive conclusion regarding the sustainability of the investment, we certify the financial product under Article 8 or 9 of the SFDR. This certification provides clients with assurance that their investments are genuinely aligned with sustainable finance goals, protecting them against accusations of greenwashing. Furthermore, we also classify the product into the new DIN-Sustainability Scoring System providing clients with valuable insights into the sustainability performance of their investments.

Q. How does Zielke Research Consult GmbH’s team stay informed about the latest market and regulatory developments to provide clients with tailored and up-to-date advice?

Our team stays informed through strategic engagements and active involvement with key decision-making bodies and industry organizations. The CEO’s participation as part of the decision making body at the European Financial Reporting Advisory Group (EFRAG) in Brussels provides invaluable insights into upcoming regulatory developments and standards shaping financial reporting practices across Europe. This direct involvement allows us to anticipate changes in regulatory frameworks and proactively adjust our advisory services to align with evolving requirements. Additionally, the CEO’s mandate with the German government, particularly with the German Environmental Agency, offers a unique perspective on environmental policies and regulations. Involvement in corresponding ISO working groups further enhances our access to the latest industry standards and best practices. By actively contributing to the development of international standards our team stays ahead of global regulatory trends and emerging market practices.

Q. In what way does Zielke Research Consult GmbH’s partnership with the European Commission and the Federal Government enhance its capabilities and impact in the financial and sustainability sectors?

These partnerships help us engage with our clients more effectively. This access allows us to stay abreast of the latest developments, trends, and initiatives in the regulatory landscape. By staying informed, we can anticipate changes and proactively adjust our strategies and offerings to better serve our clients. Through the insights gained from these collaborations, we can offer clients informed advice as well as guidance that align with regulatory standards and best practices, which follow in line with what the standard setters conceived and with what is practicable.

Q. Could you share one or two client success stories/testimonials of how your consulting services have helped clients adapt to CSR and financial reporting requirements effectively?

Transforming Sparkassen Versicherung Sachsen

The Problem: Minimal Reporting Practices

Sparkassen Versicherung Sachsen faced the challenge of minimal reporting practices, hindering their ability to communicate sustainability efforts and financial performance effectively.

The Solution: Expert Guidance and Transformation

Our expert team collaborated closely with Sparkassen Versicherung Sachsen, crafting a tailored roadmap for transformation. We guided them through implementing advanced reporting frameworks and streamlining data collection processes.

The Results: Top-Performing Excellence

With our guidance, Sparkassen Versicherung Sachsen emerged as one of Germany’s top-performing insurance companies in reporting quality. Their transparent practices set a new standard, elevating the entire German insurance industry.

Q. Looking ahead, how does Zielke Research Consult GmbH plan to continue innovating and evolving its services to meet the changing needs of clients and the dynamic landscape of sustainable finance?

We are committed to continuous innovation and evolution to meet the changing needs of clients and the dynamic regulatory landscape of sustainable finance. As of January 1st, 2024, we have separated our rating activities from our consulting services by creating Zielke Rating as a spin-off. We will focus exclusively on rating activities and will, once available; apply for registration with the European regulator ESMA. In the meantime, we will build up not only a database to rank insurance companies and banks but also the investments of the latter.

We are dedicated to expanding our database to include a broader range of companies and investments. Currently, we have 1500 companies in our database with traceable ESG data, and we aim to significantly increase this number. Artificial intelligence will help us extend our criteria and the number of companies covered. Our approach relies solely on publicly available data, eliminating the need for cumbersome questionnaires. This streamlined process enhances efficiency and transparency while ensuring objective and reliable assessments.

By focusing on publicly available data, we can measure the true ESG performance of corporations more effectively and provide clients with trustworthy insights. With this new approach, we are challenging the status quo created by the existing big ESG rating agencies in the ESG rating landscapes. To continue innovating and evolving, we are open to collaborating with international investors and expanding our services beyond our current market.

We believe that by partnering with investors globally, we can enhance, contribute, and further the advancement of sustainable finance practices on a broader scale. Overall, we are committed to innovation and adaptation to meet the evolving needs of clients and the sustainable finance landscape. Through Zielke Ratings expanded database coverage, the focus on publicly available data, challenging existing norms, and international expansion, we are poised to drive positive change and deliver value to clients worldwide.

Q. What is your final message to CIO Bulletin readers, and to your current and future clients?

To CIO Bulletin readers and our valued clients,

As we navigate the ever-changing landscape of sustainable finance, it’s crucial to recognize that traditional methods of obtaining inside information to come to a judgment are outdated. With the proliferation of ESG-reported data across Europe, there is a pressing need to effectively structure and analyze this data to make informed decisions. At Zielke Research Consult & Zielke Rating, we embrace this challenge head-on. We understand the importance of harnessing the wealth of ESG data that has explosively appeared in Europe to drive meaningful insights and actions. Through our innovative approach and commitment to leveraging publicly available data, we are dedicated to providing clients with accurate, transparent, and actionable assessments of their ESG performance.

To our current clients, we express our gratitude for entrusting us with your sustainability and financial reporting needs. We remain committed to delivering high-quality services and supporting your journey towards sustainability excellence.

To our future clients, we invite you to join us in embracing the transformative power of sustainable finance. Together, we can navigate the complexities of ESG reporting and drive positive change in the financial industry.

Thank you for your trust and partnership.

Meet the Stalwart Leader

Carsten Zielke, Founder and CEO of Zielke Research Consult GmbH, is a distinguished expert in insurance economics, holding a corresponding PhD. He served as a financial sell-side analyst and advisor for various investment banks before establishing his own business in 2013. Carsten has been a vocal advocate for important causes, such as highlighting the precarious solvency situation of German life insurers back in 2001, advocating for better insurance accounting resulting in IFRS 17, and currently leading efforts in advocating for European sustainability reporting standards.

Beyond his professional accomplishments, Carsten’s resilience, determination, and commitment are also evident in his personal pursuits. He has completed 39 Ironman triathlons and is a devoted family man. Married with two children, his achievements in both sport and family life are a testament to his unwavering perseverance, character, and commitment to excellence in all aspects of his life.