In today’s dynamically evolving world, incorporating sustainability into the business is no longer an option—sustainability and environmental, social, and governance (ESG) issues are becoming a strategic and operational imperative for organizations and are increasingly becoming relevant to all stakeholders. Many industry leaders recognize that considering a values-based approach while developing business strategies can be vital to long-term success. However, not all organizations possess the organizational structure and know-how to manage sustainability as a core business issue. Helping such companies integrate global ESG frameworks into their operations is Enzo Advisors, a female and minority-led sustainability consultancy providing cutting edge ESG solutions to drive measurable environmental and social impact.
Enzo Advisors helps private and public corporations develop best-in-class business models to grow their businesses sustainably over the long term. Enzo Advisors also collaborates with institutional investors across all asset classes, including private equity, venture capital, fixed income and public equities, to codify ESG frameworks within their investment and diligence processes. “Enzo Advisors was founded with a mission to help companies develop credible sustainability goals to create long-term value for stakeholders and society,” notes Nidhi Chadda, Founder and CEO of Enzo Advisors.
Nidhi is a seasoned ESG professional who comes with extensive experience in portfolio management. Before founding Enzo Advisors, she was a portfolio manager at RBC Global Asset Management where she spearheaded ESG integration across the 3 funds she co-managed representing $3 billion in assets under management. During this role, she not only recognized the potential impact ESG regulations could have globally, but also saw a strong link between ESG factors and what defines best-in-class business models. Initially, she viewed ESG as a risk management tool to mitigate volatility; however, as a growth investor, she recognized these frameworks as long-term value creation drivers that could support revenue growth, drive cost savings, and improve overall cost of capital.
After due consideration, Nidhi decided to focus on helping private, small and mid-cap corporations and institutional investors truly integrate and embrace ESG and sustainability factors into their business operations and portfolios. “As an ESG professional, I am excited by the prospect of the immediate impact that incorporating sustainability initiatives could bring to organizations and society as a whole,” says Nidhi.
Enzo Advisors takes a balanced approach towards assisting with environmental, social and governance initiatives. The Company has a number of proprietary in-house frameworks, including its Beyond the SCOPETM integrated climate strategy framework, as well as other initiatives including diversity scorecards and ESG diagnostic assessment tools, to provide a more holistic ESG solution to its clients.
As a female- and minority-led firm, Enzo Advisors also internally practices the policies it outlines for its clients, particularly as it pertains to diversity, equity and inclusion (DEI). As I view cognitive diversity as a key driver to innovation in both public and private markets, I focus on driving diversity, equity and inclusion initiatives both in-house and across all clients. Our diversity scorecard assesses 7 key categories in increasing complexity and reviews a host of key metrics for each core area to help institutions develop key DEI initiatives that add long-term value. “For example, strong labor practices drive greater employee engagement and higher retention, which reduces turnover costs in the long term,” explains Nidhi.
Nidhi is also part of many diversity and inclusion initiatives, both personally and professionally. She is a Board member of the Harvard Business School Women’s Association, an executive committee member for KEEN USA, a non-profit association focused on providing recreational activities for children with disabilities, and an executive member of iPrism, an early-stage technology commercialization fund from Mt. Sinai focused on supporting women and minority entrepreneurs develop patient-centric innovation.
Enzo Advisors was founded to help small and mid-cap companies build sustainable businesses that create value for stakeholders and society. The company’s proprietary methodology incorporates corporate strategy and financial forecasting with the integration of broader ESG principles across operations to effectively communicate with stakeholders.
Enzo Advisors takes a holistic quantitative and qualitative approach toward helping both corporations and investors build sustainable business models backed by data and analytics. What is unique to their approach is that Enzo Advisors comes with extensive experience in investment management, finance and strategy. For that reason, they take a holistic look at what defines sustainability for a given business model and focus on key material ESG factors that drive sustainability across a company’s operations to build a competitive edge. While building a sustainable business model for the client, Enzo Advisors focuses on effectively communicating the ESG story to stakeholders and ensures to build a credible action plan to deliver those sustainability objectives. “We take a more boutique, hands-on approach while working with the clients who require more in-depth expertise to build their ESG programs and always make certain that there is data and a credible plan to back any ESG – related communication to stakeholders” says Nidhi.
Enzo Advisors provide its clients with a comprehensive ESG roadmap that involves four major phases: setting the strategy and initial roadmap, tracking the relevant key performance indicators (KPIs), identifying strategic initiatives to improve upon those KPIs, and monitoring progress. The company works with various technology partners to help clients track and monitor progress against the KPIs using an easy-to-use technology data platform. Through this platform, companies and investors can continue to visualize their KPIs, update their data over time, and review progress. As Enzo Advisors tracks the progress of the sustainability programs using their technology partners’ platforms, the company can continuously monitor and advise the clients on their roadmap and external reporting and communication strategy.
As one example, Enzo Advisors helped a client achieve several milestones across their ESG journey. Enzo Advisors successfully built a comprehensive ESG roadmap supporting both environmental and social initiatives. Enzo Advisors helped the client formally launch decarbonization initiatives with a credible action plan as well as drive social and community – focused initiatives, including a program to support local STEM education efforts.
Enzo Advisors collaborated with a billion-dollar public company supplying hardware into the oil and gas industry to assist with the development of the ESG program. The company was coming under increasing pressure from both customers and major shareholders to report greenhouse gas (GHG) emissions and disclose energy transition plans.
Using Enzo Advisors’ BEYOND the SCOPETM integrated climate strategy framework, a proprietary framework built in-house to be aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) framework, Enzo Advisors was able to assist in calculating the client’s carbon footprint from Scope 1 to Scope 3 emissions at a granular level, facility by facility, just within 6 months. In addition, the company helped the client develop various decarbonization initiatives to align with the Paris Agreement, focused on ideally limiting global warming to no more than 1.5 degrees above pre-industrial levels. The client also now reports against the TCFD framework in a comprehensive fashion such that every reference about strategy, risk and governance is backed by a review of their underlying processes. This client grew from not having any ESG presence to building a world-class program well ahead of its peers across both environmental and social initiatives, a major feat for a small-cap company that operated with limited resources and budget.
As an ESG advisor, Enzo Advisors support their clients’ external communication around sustainability goals and objectives. They understand that confirming adherence to ESG principles without specific programs, policies, procedures, and commitments that support these declarations is not enough. To address this issue, Enzo Advisors work closely with both its corporate and investor clients to delve deeper beyond external communication and launch credible ESG roadmaps and integration programs backed by data.
“We consider the high-level concepts around climate science and ESG factor analysis as any other advisory firm, but take it one step further to understand the financial impact of decisions and develop a roadmap that interlinks finance, strategy, operations, and ESG regulation,” mentions Nidhi.