We were pleased to be a partner with Finance For A Sustainable Future (FSF) for their 2020 Conference, which took place in January (2020). The two day event had many speakers from across the finance sector, and covered a huge range of topics pertaining to the role of the financial advisors in the field of sustainability.
The attendees were up and coming young financial advisors, with participants chosen from a select group of applicants. While they have gained a huge amount of knowledge and had the chance to develop their careers with this conference, FSF have kindly shared some details from the event including key takeaways from the speakers’ talks, which we have summarised below.
First Talk Of The Day
Speaker: Will Martindale – Director of Policy and Research at UNPRI
Will’s talk led to discussion that set the stage for the rest of the conference. He began with an interactive overview of the financial system, highlighting key stakeholders and their transformative roles in the industry.
He then elaborated on the role of policy and stewardship, highlighting these key trends in field of sustainable finance:
- Policy matters
- There has been a shift from sporadic adoption to comprehensive, national sustainable finance strategies
- Investors are increasingly involved in public policy development and implementation
- More technical and implementation focused
- The new focus for investors and policy makers are real economy outcomes
Will’s talk then led to some valuable participant questions, such as:
- Can the financial system deliver on sustainability?
- How do you want your own money to be invested?
- What’s the point of regulation if it’s not improving our world?
Second Talk Of The Day
Speaker: Dr Richard Perkins – Associate Professor in Environmental Geography and Associate of the Grantham Research Institute on Climate Change and the Environment, LSE
Dr Perkins’ talk focused on three main topics: risks, opportunities and investors, and how they are interconnected. The key points from his talk were as follows:
- Sustainability and climate associated risk and opportunities, these are the core drivers of the transition occurring in the financial system
- There continues to be high variability in both the scope and depth of engagement across different asset classes, institutions and information
- The development of mandatory and voluntary forms of regulation and disclosure has ensured ESG data and considerations have become an integral aspect of financial analysis in assessing a firm’s exposure to climate risk.
- Material dimensions of ESG are being interrogated more rigorously as a results of the increase in popularity of integrating tools in analysis
- We must continue to ask questions and remain critical of these trends, especially from the perspective of addressing real economic outcomes
Third Talk Of The Day
Speaker: Josué Tanaka – Managing Director (for Operational Strategy and Planning, Energy Efficiency and Climate Change), EBRD
Josué talk focused on contextualising climate change, the magnitude of the issues, and the role of multilateral development banks (MDBs) in sustainable finance. From his talk a couple of important insights stood out:
- MBDs can be used to scale up financing by providing increased financial mobilisation for climate action, this is achieved through blended finance but also their ability to expand lending capacity.
- MBDs have an important role in system change, shown through the work of ERBD’s task force in building awareness of Climate-related Finance Disclosure, the new EU taxonomy and the Network for Greening the Financial Systems.
Final Talk Of The Day
Speaker: Neil McIndoe – Trucost
Trucost’s work is centered on the risks associated with climate change, natural resource constraints, as well as the broader environmental, social, and governance factors. Neil’s speech had two main points of note:
- Rapid human population growth has led to greater environmental erosion, due to supply and demand.
- This links with the tragedy of the common’s theory and Mark’s Carney famous “breaking of the horizon” speech.
This led participants to query why humans haven’t been able to curtail greenhouse gas emissions, despite knowing we need to.
First Panel Discussion Of The Conference
Panellists: Rob Lake (Founder, Authentic Investor), Lydia Hascott (Head of Entrepreneurship, Finance Innovation Lab), Adrian Rimmer (Senior Advisor on Green Finance, London Stock Exchange Group), Eoin Murray (Head of Investment, Hermes Investment Management).
The first panel of the conference looked to delve beyond the corporate mask and stereotype of people in the financial industry to view the person behind the work.
The resulting discussion led to five key outcomes from participants:
- Everyone is a leader in sustainability – regardless of age or time in the industry. Leaders are needed across all fields to work for sustainability.
- Join the dots and find the opportunities – in the early stages of a career in finance, learn as much as possible about the organisation you are in, it’s employees and the work being done to connect people to the work.
- Look after yourself – the world needs the younger, next generation coming up not to burn out, even under the impending pressure of climate change and global warming.
- Remember who you are – the finance industry is a privileged bubble and will remain that way, but it needs you to stay true to yourself and your morals.
- Sustainability is for everyone, not just the 1% – Climate change affects not just you, your family and friends, but everyone around the globe.
First Talk Of The Day
Speakers: Andrea Carzana (Fund Manager, ESG European Equity, Columbia Threadneedle) and
Michael Hamblett (Analyst, Responsible Investment, Columbia Threadneedle).
Day two began with two speakers from Columbia Threadneedle, a signatory of the Principles for Responsible Investment that launched the UK Social Bond Fund in January 2014.
Andrea and Michael shared their insights into responsible investment with attendees. They spoke about:
- Their investment approach
- The use of ESG integration in investment analysis
- The rapid evolution of companies to adjust to the dramatically changing world of today, and therefore the dynamic nature of their approach to investment
Second Talk Of The Day
Speaker: Christina Rehnberg – Senior Associate, KKS Advisors
Christina focused her talk on thought leadership, and how KKS Advisors reflects this within their approach to reshaping financial markets. She offered three factors which she believes encourage good corporate governance:
- Corporate governance isn’t one size fits all – good practice is converging as boards continually align the interests of stakeholders with employees.
- Corporate governance is a value driver – Good governance enables organisations to achieve targets, control and mitigate risks, all while ensuring compliance. Conversely, poor governance is linked to financial underperformance.
- Corporate governance leads to good sustainability when it is linked at a board level.
Third Talk Of The Day
Speaker: Jim Totty – Earth Capital
JIm’s talk looked at the capital markets food chain, the relationships of: Early stage seed > venture capital > growth capital > buyout and infrastructure. He also delved into impact measurements, the most exciting investment sectors and showcased some case studies.
He shared some interesting points during his talk, including:
- How Earth Capital measures impact investment why:
- using a 30 point score card over 5 dimensions of ESG, to understand the contribution of an investee company to sustainable development
- Areas he was most interested in:
- Sustainability: The “sustainable revolution”, comparing the breadth of the industrial revolution to the speed of the digital revolution
- Mobility: As the largest sector in terms of global private equity, followed by clean industry and food and agriculture
- Food, water and energy are the unicorn market, which makes them the most exciting investment sectors
- Jim also said that the 2020s is the decade aviation will become electric.
Fourth Talk Of The Day
Speaker: Tom Whitehouse – Leif Capital
Tom talked about the role of oil, gas in sustainability and how a low carbon economy could be achieved. Within his talk, there were a few key takeaways:
- Oil and gas companies were pioneers – there is something to be learned from what they did.
- A low carbon economy is the future – And always will be, it’s the next big thing we’re working towards.
- We need creative destruction – to create new things, we need to dismantle the old.
Fifth Talk Of The Day
Speaker: Patrick Seifert – Head of Primary Markets, LBBW
Patrick spoke on the development of green and social bonds and their uses. Within his talk, he highlighted the five stages of green bond development:
- Use of proceeds – The use of proceeds is one of the key principles in green and social bonds as it emphasizes what the funds will be used for.
- Process of project evaluation and selection – During this stage the prospective issuer identify and select a sustainability project
- Management of proceeds – This stage ensures the proceeds raised by the green or social bond are directed into the correct project.
- Reporting – Issuers are asked to report frequently on the project to ensure that the project is meeting certain KPIs and goals set out during the initial development of the bond.
- External review – The final stage of a green and social bond development involves getting external approval that the bond is in fact green and matches its initial outcomes.
Patrick also discussed what he believed to be the two limiting factors which are hampering the development of the green and social bond market:
- The difficulty in finding sustainable projects with a long life span, to match the length of the bond.
- The liquidity of green and social bonds to smaller than conventional bonds.
Final Panel Of The Conference
Panellists: Usman Ali (Partner, Mobius Capital Partners), Snorre Gjerde (Analyst, NBIM), Jenna Nicholas (CEO, Impact Experience), Fotis Chatzimichalakis (Senior Associate, IMPAX), Julia Jaeger (Analyst, Cyan Finance).
The last session and panel of the conference was centred on what skills were required to have a successful career in finance. The panellists offered their various perspectives on what skills they suggest attendees developed. Key takeaways from what they shared include:
- Be on top of the current trends; both globally and in the financial sector
- Develop conviction in your opinions
- Develop connections and friends in the industry – having mentors early on in your career can be so helpful
- Going into the financial sector doesn’t necessarily mean going into asset manager or investment banks – Find what you would really like to do
- A solid understand of finance, accounting and economics will be tremendously useful
That’s The End Of The 2020 Conference
There was a huge amount covered and even more that was discussion in between sessions and during workshops. Hopefully, this offers a bit of insight into the exceptional, informative experience that participants in the 2020 Conference were able to take part in. You can learn more about FSF and the next conferences on the Finance For A Sustainable Future website.