GEFI Round Table Discusses Ethical Finance Approaches in the Debt Capital Markets

The Ethical Finance Roundtable was held on Feb 27th at Baillie Gifford in Edinburgh. Entitled "Ethical Finance Approaches in the Debt Capital Markets", the round table covered market developments in the $1.45 trn climate-aligned bonds market (such as green bonds) along with innovative trends in ESG and SDG bonds.

Following a welcome by Chair Omar Shaikh, Graham Smith (Director - Sustainable Finance Unit - Global Banking, HSBC) provided an update on HSBC's strategy to deploy $100bn in sustainable financing and investment by 2025, and an overview of the bank's SDG bond and how it has integrated the Green Loan Principles and Green Bond Principles into its financial products and instruments:

The $100bn is typically deployed through: 1) bonds 2) loans and 3) investments where HSBC maintains a focus on returns. The green agenda is being driven by regulation where some governments are taking measures that encourage responsible lending in the private sector. The Paris Agreement, which set out national contribution guidelines in the form of NDCs, prompted legislation such as the Clean Air Act in the UK. Furthermore, in France, the Government issued Law 173 in making investors disclose green assets from brown banks are obliged to rebalance their assets with a higher ratio of green to brown.

HSBC is a leader in green finance and is committed to investing in green assets that drive the market forward. With the examples of Clean tech growing by 4% to 5% Graham suggested that investors should be interested in the space green or not.

In March 2018 the Green Loan Principles were published. Graham explained that this important development, with a similar rationale to the Green Bond Principles, applies to broader sections of business and society and has now become the “gold standard” for green loans. Banks can now offer products that they understand.

Graham explained the emergence of products (such as green, social, sustainability bonds and loans to transition loans) and that the Loan Association is likely to provide a much-needed definition for ESG loans in March this year.

With ESG products positioning businesses as good corporate citizens and green products highlighting a commitment to the environment there are PR benefits to be derived from businesses engaged in sustainable finance. In terms of pricing, there is no financial penalty for investing in green bonds but they still prove costly for issuers.

HSBC launched the world’s first bond that directly supports the SDGs and the Paris Agreement. The US$1 billion raised through the bond finances projects that benefit communities and the environment, including hospitals, schools, small-scale renewable power plants and public rail systems.

The key message is that regulations are driving the development of the market, leading to change at the commercial level. A prime example is the Task Force on Climate Related Financial Disclosure (TCFD).

Caspar Cook (Head of Analysis, Cameron Hume) then outlined Cameron Hume's client-led approach to ESG, which focuses on a combination of values-based and returns-based strategies, and how this has evolved to successfully grow the Global Fixed Income ESG Fund.

Cameron Hume, an active fixed income specialist, is a signatory to UN PRI. Caspar started by explaining the considerations of applying an ESG approach to fixed income, which differs from its integration into equity investments. There remains a lot of confusion as to the definition of ESG so Cameron Hume has divided its approaches into two categories: returns-driven (ESG factors that are material to performance) vs values-driven (implement ethical social and environmental objectives of different investors). Cameron Hume focuses on returns-driven investment and only practices values-driven investing in segregated accounts that mandate it.

Caspar believes that ESG is a good risk indicator and cited the example of PG&E, a prolific bond issuer known as the cleanest provider of energy in USA. Carbon conscious investors would have found this an interesting play but they filed for bankruptcy following their link to the California wild fires. ESG analysis, using MSCI, would have highlighted risks relating to its poor land use and diversification thereby discouraging investment.

A further example was shared by Caspar. Equifax, the biggest US credit scoring company, had a substantial data breach recently that severely impacted its shares and bonds. MSCI had ranked Equifax 1 out of 10 in data security and flagged this as a material risk. These factors do not typically appear in annual accounts or financial ratios that many investors focus on.

ESG factors help investors focus on neglected risk that leads to more sustainable long-term investing. Cameron Hume’s Global Fixed Income ESG Fund uses responsible investing to bring ESG factors in to the investment process tilted towards higher ESG rated companies.

Following the formal presentations a lively and lively question and answer session followed. Some of the key points raised included:

  • It is easier to influence sovereigns through the bond markets than corporates.
  • ESG policies in businesses tend to be top down and not always filtering to the bottom layer of people making decisions.
  • ESG factors influence investment performance but not necessarily on a consistent basis. Some studies show that it can add 0.5% to 0.8% a year in performance. Participants were skeptical because it is hard to disentangle ESG from other factors.
  • Clients have fiduciary duty towards performance so it is a challenge for fund managers to integrate a universally agreed ethical stance into a portfolio (e.g. Calpers divested from tobacco stocks 15 years ago and recently published that that decision cost them USD6bn).
  • Even if findings suggest that ESG is good for performance over the last few years there is a lack of evidence indicating that it will improve performance going forward.
  • The bond industry must evolve to ensure bonds fulfil their green promises. At the moment they just get declassified but there should be penalties. And declassification often takes place long after the bond has de-greened (e.g. Mexico City airport project).

The session concluded with a discussion on the role the debt capital market industry can play in driving standardisation in pricing, measuring and reporting. The key points raised were:

  • At the moment the industry tends to tick boxes and gets PR recognition for this (e.g. the CDP used by the TCFD).
  • There is no perfect measure for transition risk, which will play a key role in consolidating many sectors in the medium term.
  • A nuance that influences the development of the industry positively is that asset managers pay for MSCI scorings while issuers pay for credit ratings.
  • As investors increasing focus on analysing and challenging data a virtuous cycle will be created to drive up the availability and quality of data.
  • A limitation on green bond reporting is the risk of breaching client confidentiality.
  • The proof of concept is just as poor in green project proposals that are submitted for debt funding. This leads to a serious lack of viable sensible pipeline to invest in (especially in the SDG space). Large lenders end up majority invested in their own assets as a result (e.g. HSBC’s SDG Bond

Overview of Ethical Debt Instruments

Introduction 

Debt instruments that provide a coupon as well as a social or environmental return are broadly dubbed as ethical debt instruments. They come in a variety of forms, and innovative new structures are increasingly coming to market.

The major driver of this is investor demand (such as pension funds, insurers and millennials) and issuers keen to tap into this rich pool of investment capital at equal to lower cost than purely financial return focused bonds. Investors increasingly believe that these forms of debt financing better capture long term and existential risks as well as seek to provide non-financial returns.

The most important factors to focus on when evaluating such instruments is whether the issue meets a common set of Social Bond Principles, namely use of proceeds, project or investment selection process, management of funds in accordance with a pre agreed framework that has been evaluated by a third party (e.g. Sustainalytics or CECERO) and aligns with a recognized global or national set of principles (such as the Green Bond Principles, the Social Bond Principles and/or the Sustainability Bond Guidelines) and impact metrics monitoring and reporting.

Green Bonds

By far the largest ethical debt market place at the moment, with USD11.9bn issued to date in 2019 alone. Last year there was USD167.3bn in issuances. This year is forecasted to mobilise USD250bn in issues. The majority of these bond issuances are aligned with the Climate Bonds Initiative to provide environmental integrity. A few are certified by the climate bond standard which is backed by a board of investors that represent USD34tr in AUM.

Essentially the proceeds of the bond must be used in areas that are consistent with the 2-degree Celsius warming limit specified in the Paris Agreement. BNP Paribas is consistently in the top five underwriting league tables for green bonds. Several stock exchanges have a dedicated section allocated to green bonds, such as Oslo, London, Mexico, Luxembourg, Italy, Shanghai, Taipei, Johannesburg and Japan. Interestingly the US, China and France are the largest sources of labelled green bonds.

Issuers range mostly from multi sector to energy or building related. Structures are sophisticated and diverse ranging from covered bonds and asset backed securities to green Schuldschein, green sukuks, mortgage backed securities and medium-term notes. Apart from issuing its first green bond (USD500mn) as early as 2015, HSBC has also issued an equity linked green bond for EUR34mn (2017) that pegs returns to the performance of a basket of ESG compliant listed companies that are measured against 134 KPIs (STOXX Europe ESG Leaders 30 Index). The proceeds are dedicated to projects that improve energy efficiency.

SDG Bonds

SDG bonds are a type of sustainability bond that aligns the projects it finances or refinances with social and / or environmental impact linked to specific SDGs. These may include all the SDGs or only some of them, such as in the case of the ANZ SDG Bond that seeks to contribute to the achievement of nine of the seventeen goals including health, education, sustainable cities and climate action or the HSBC UN SDG Bond that uses proceeds towards projects that achieve one or more of seven specified SDGs including clean water, energy, education and infrastructure.

In both cases the proceeds can also be used on its own operating or capital expenditures as long as it contributes to the achievement of one or more of the nine SDGs identified.

In HSBCs case the bond is majority invested in two of its LEED Gold certified headquarters in the Midlands and in Dubai. The HSBC bond which was launched in 2017 was USD1bn, 3x oversubscribed and matures in 2023. The more recent SDG bond issued by the World Bank links return on investment to the stock performance of thirty listed companies that make up the Solactive Sustainable Development Goals World MV Index. Proceeds will be used to finance their development projects. BNP Paribas arranged the bond while Banque SYZ placed it.

ESG Bonds

ESG is now a mainstream topic steering investment towards it, and this will continue at a steady pace given that Millennials, who put greater emphasis on adopting these values, will become 75% of the work force by 2025. One of the challenges the industry faces however is a lack of standardization making it difficult for investment funds to set a fixed ESG criteria. In addition, the size of ESG bond issues are generally small relative to their conventional peers and are issued by those with no track record thereby making it difficult for large institutional investors to participate. In fact 50% of European investors in a recent report said they did not think there were enough ESG products in the fixed income space. Another influencing factor in the debt capital markets is that whether labelled as a type of sustainability bond or not, 85% of European investors apply ESG criteria to at least investment grade bonds. (RBC Global Asset Management & Cerulli Associates)

Blue Bonds

These are bonds that raise financing for projects that support the sustainable use of ocean resources, inspired by the green bond movement but at a naisant stage. Only one issuer has raised a blue bond so far and that is the Seychelles, an island highly dependent on the ocean for its livelihood. The issue size was a modest USD15m and the coupon is part guaranteed by the World Bank and the Global Environment Facility. Considering the size of the issue only three investors participated: Calvert Impact Capital, Nuveen and Prudential.

Vaccine Bonds

Vaccine bonds were in fact pioneered in 2006 by the International Finance Facility for Immunisation (IFFIm) launched by GAVI (The Vaccine Alliance) and began the movement by the financial sector towards developing a set of principles to hold the socially responsible bonds universe together. Vaccine bonds are directly aligned to SDG 3, which aims to end the preventable death of children under 5 years of age by 2030. GAVI has been able to raise USD5.7bn so far as effective bridge financing until grant providers can step in.

Other Bonds

Other kinds of social & development impact bonds include Tobacco Social Impact Bonds (TSIB), a rhinoceros conservation impact bond, a cocoa and coffee production bond in Peru and a youth unemployment program bond in Serbia. Sometimes referred to as a pay for success model or a social benefit bond, these innovative financial instruments tend to be driven by private investors with an interest to offer upfront capital for a particular and specific social or environmental goal. These investors work with governments, philanthropists and/or aid donors to come up with mutually beneficial structures that reward them if outcomes are met.

Conclusion

Although the green bond marketplace has taken off well over the last few years, it is not enough to fill the USD3 to USD5 trillion annual gap that is required to meet the SDGs. Banks are in a perfect situation to align just part of their broad loan books towards SDGs that are material to them to drive more capital towards the achievement of the SDGs. Certain sectors can be identified as most closely aligned and a framework for tracking and reviewing annually can be put in place based on industry learnings from the green bond issuance space. As a result, banks will not only be able to expand their product offering and client base but also support their clients who wish to similarly begin engaging with and reporting on their contributions to the UN SDGs.

References: ICMA, UN, Dealogic, MSCI, European Commission, Climate Bonds Initiative and HSBC

Ethical Finance Round Table

HSBC is an active lender in the sustainable finance industry globally and a member of The ICMA Green Bond Principles Executive Committee, The Catalytic Finance Initiative, The Equator Principles Association, The WEF Climate Leaders CEO Group, The Climate Bonds Initiative, The Social Bond Guidance Steering Committee, China’s Green Finance Committee, and the Adopted Taskforce on Climate Related Financial Disclosure. It is the founder of the HSBC Centre of Sustainable Finance and the award-winning Climate Change Centre of Excellence and the first sovereign Green Bond arranger (EUR750mn Polish Bond 2016). HSBC will be speaking at the Ethical Finance Roundtable in Edinburgh hosted by GEFI on Feb 27th 2019. To be considered for an invitation, please click here.


“THE EDINBURGH FINANCE DECLARATION” – AN INTERFAITH INITIATIVE ON ETHICAL FINANCE

MEDIA RELEASE

EMBARGO – 0001 (UK) Tuesday 23rdOctober 2018

“THE EDINBURGH FINANCE DECLARATION” – AN INTERFAITH INITIATIVE ON ETHICAL FINANCE

‘The Edinburgh Finance Declaration’ – The Church of Scotland and the Islamic Finance Council UK (UKIFC) will officially unveil an interfaith shared values framework on ethical finance at a reception in Greyfriars Kirk this evening (Tuesday 23rdOctober 2018). The event marks the end of the international Ethical Finance 2018 conference that has convened 300 experts in Edinburgh this week.

The Declaration, thought to be the first of its kind globally, represents the culmination of the first stage of an historic collaboration initiated in February 2016 when the Church and UKIFC signed a partnership agreement to co-develop an ethical finance solution open to all society, regardless of faith or ethnicity, that is built upon the shared values between the two faith traditions.

The shared values framework emerged from efforts led by finance practitioners. This included in-depth interviews, consultation papers and a series of structured round tables held over a two year period. This process engaged over 200 senior stakeholders ranging from banking and finance experts to religious theologians, parliamentarians and academics from across the UK and abroad. Six core shared values emerged that were refined to create the Edinburgh Finance Declaration.

The shared values – which include Stewardship, Love of the Neighbour, Human Flourishing, Sustainability and Purposefulness, Justice and Equity, and Common Good – align contemporary trends in the financial markets such as climate, UN Sustainable Development Goals and impact investing. The Declaration is designed to inform the development of financial products that support an ethical economy. It also provides a values framework that can inform organisational cultures to help rebuild the loss of trust in financial institutions and markets that has arisen since the global financial crisis.

Rev Dr Richard Frazer, Convener of the Church of Scotland’s Church and Society Council said:

“Since the global economic crash in 2008 public trust in financial institutions has been shaken, with seemingly little change as a result. From our Christian and Islamic faith traditions we believe that a different world of finance is possible, one in which ethics and economics go hand in hand. We believe that these shared values provide a solid foundation from which we might arrive at a financial sector that contributes to the flourishing of all.”

Faith organisations are estimated to command assets valued at $7 trillion. That jumps to $13 trillion when charities, endowments and philanthropic entities are included. As a consequence, these bodies are well placed to influence investment decisions and to demand that financial institutions are responsive to the values set out in the Declaration. One obvious starting point would be making a commitment to advancing the common good by adopting the United Nations’ 17 Sustainable Development Goals.

UKIFC Advisory Board member Omar Shaikh outlined the next stage in the journey: “Faith groups have always had an important role in promoting social causes. Moving forward, taking these values coupled with strong business acumen and a solid commercial approach we hope to develop an ethical finance solution that is both commercially sustainable and creates positive societal impact.”

The Declaration, which forms part of the Global Ethical Finance Initiative, is a symbolic development sending a strong and positive message of interfaith collaboration and furthering Scotland’s growing reputation for innovation and ethical finance.

 

Further Information

www.edinburghdeclaration.org

 

Chris Tait

Project Manager, UKIFC

chris@ukifc.com

(m) 07931 103573

 

Helen Silvis

Communications Manager

Church of Scotland

HSilvis@churchofscotland.org.uk

(m) 07817 995887

 

QUOTES   

 

“A remarkable and admirable document, reflecting very great credit on both the collaborative process and fine draftsmanship that generated it.”

Sir David Alan Walker, Former Chairman Barclays, Morgan Stanley, Spearheaded Walker Report of corporate governance

 

“This collaboration is an important example of how different communities can not only talk of, but demonstrate shared values. It is also very encouraging to see the role the faith communities can play in inspiring a more inclusive, ethical and responsible financial system.”

Lord Archbishop of Canterbury, The Most Reverend and Right Honourable Justin Welby

 

“The Christian and Islamic faith traditions share a commitment to economic justice…. By collaborating and “putting our money where our morals are” we have an opportunity to live out our common values and make a tangible change for those most affected by poverty.”

Rt. Rev Dr Angus Morrison, Ex- Moderator of the General Assembly of the Church of Scotland

 

“This is powerful example that many globally can take from, including us in Nigeria. Well done to the Islamic Finance Council UK and the Church of Scotland for showing their vision, leadership and bravery.”

His Highness Emir Sanusi Former Governor of the Central Bank of Nigeria

 

“We were delighted and astonished to discover that the Church of Scotland and UKIFC had been working together to produce a theological statement of core values. Bringing faiths together in ethical finance has never been done and this work is very impressive.”

Martin Palmer, Secretary-General, Alliance of Religions and Conservation

 

About the Global Ethical Finance Initiative

The Global Ethical Finance Initiative (GEFI) is a global movement and co-ordinated programme of ethical finance projects and activities originating from Scotland. GEFI consolidates some of the pioneering ethical finance work being undertaken in Scotland under one brand to create a compelling global proposition.

www.globalethicalfinance.org

 

About the UKIFC

The UKIFC was established in 2005 as a specialist advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. As a dynamic and forward-thinking not-for-profit organisation the UKIFC’s Advisory Board Members, who provide pro bono support, have defined and evolved the role the organisation plays in making a tangible impact in the global Islamic and ethical finance sectors. Principle service areas are: Advisory, Ethical Finance, Training and Awareness and Thought Leadership.

The UKIFC has been recognised globally for its work in promoting shared values and increasing connectivity between ethical and Islamic finance stakeholders across the UK. For more than 5 years the UKIFC has been leading an award winning debate on ethical finance through a series of events based in Edinburgh.

www.ukifc.com

 

About the Church of Scotland

The Church of Scotland is Scotland’s national church and is also one of the UK’s largest charities. It serves almost 400,000 members, with more regularly involved in local congregations and our community work. Within the organisation, the Church has around 800 ministers serving in parishes and chaplaincies, supported by professional and administrative staff. The Church has a proud tradition of working to benefit those less well off in society, and campaigns on a range of economic and social welfare issues.

www.churchofscotland.org.uk

END.


Christians and Muslims unite to tackle banking crisis

The Church of Scotland and Islamic Finance Council UK have announced a partnership to create ethical financial services.

MEDIA RELEASE
Tuesday 22nd March 2016

 

The joint venture will draw on how the Christian and Muslim communities have supported ethical finance in the past and examine the practical commercial viability of new models which can tackle inequality and poverty. This pioneering initiative is the first time the Church and Islamic finance have come together to collaborate and will aim to create solutions open to everyone regardless of religious or ethnic background. This initiative has come into being through a shared belief that existing financial institutions have in recent years lost their social conscience. Following the banking crisis of 2008, further ongoing scandals of misselling payment protection and interest rate fixing have raised the question if reforms have worked. We believe this is an exciting opportunity for faith groups to work together on solutions which will benefit the whole of society, regardless of faith or belief.

On announcing the project  Rt. Rev Dr Angus Morrison, Moderator of the General Assembly of the Church of Scotland, said: “In 2012 the Church of Scotland’s special commission on the purpose of economic activity identified human flourishing and the protection of the planet for future generations as two of the most critical purposes for financial interaction. Our current system has gone badly wrong, creating massive inequality and the destruction of our shared natural resources by money-making machines overtaking commerce that serves the common good.

“The Christian and Islamic faith traditions share a commitment to economic justice and a call to an equal distribution of the gifts of God. By collaborating and “putting our money where our morals are” we have an opportunity to live out our common values and make a tangible change for those most affected by poverty. Active concern for our communities is an obligation and we look forward to meeting the challenge together.”

The Islamic Finance Council UK (IFC) is inspired by a commitment to developing a fairer, more responsible finance system. It has been recognised globally for its work in promoting shared values and increasing connectivity between ethical and Islamic finance stakeholders across the UK. For more than 5 years the IFC has been leading the debate on ethical finance through a series of events based in Edinburgh.

IFC Advisory Board Member Omar Shaikh said: “In recent years we have developed a strong relationship with the Church of Scotland and this project is a result of that positive engagement and the mutual desire to work collaboratively on a project which brings together the best of our respective faiths. The positive message of faith groups working together presents a beacon of light which we hope can inspire many others across the world.

“Scotland has a proud heritage in ethical finance with the savings bank movement able to trace its origins back to the Rev. Henry Duncan of the Church of Scotland. This model was also used as the blueprint for the early Islamic banking attempts in the 1960s, which makes it particularly poignant that this new initiative in being led in Scotland.”

The project will research, shortlist, test and then establish a viable ethical finance business solution. The consultation and business plan phase is expected to last a year, with the first workshop to take place this May in Edinburgh with theological and financial experts coming to Scotland from as far afield as Nigeria, Malaysia and Bahrain.

 

Additional Notes

International Islamic Finance

Worth over $2trn, the Islamic finance sector has witnessed tremendous growth over the past decade. Moving forward a key growth strategy for Islamic financial institutions will be their ability to successfully enter and tap the considerably larger ethical finance arena. Along with the commercial opportunity, by focusing on the inherent convergence in ethical values will increase the appeal of Islamic finance in new global markets and allow an avenue to address the aspirational dissatisfaction growing within the industry as witnessed by key stakeholders raising concerns over excessive synthetic imitation of conventional structures.

Africa and Nigeria specifically is well known for its triple heritage. Often referred to as non-interest finance, Nigeria has been taking a lead in developing this sector to promote financial inclusion.  Ex-Governor of the Central Bank of Nigeria, HH Emir Sanusi commented, “One immediate success of this initiative is how it is bringing together faith communities on their common values. This is powerful example that many globally can take from, including us in Nigeria. Well done to the Islamic Finance Council UK and the Church of Scotland for showing their vision, leadership and bravery.”

Islamic finance in Malaysia has taken considerable market share and attracted many Chinese Malays and those not of the Islamic faith.  Dr Akram Laldin, CEO of Malaysia based Bank Negara body ISRA commented, “Islamic finance is founded on moral and ethical values and these values are shared by different faiths. This joint venture with the Church demonstrates that people from different faiths can work together on the common ground that we share. Together we can strive for the betterment of humanity.”

Scottish communities show leadership

Minister for Europe and International Development, Humza Yousaf, said: “Ethical finance offers a great opportunity to diversify Scotland’s financial services industry, allowing it to grow and prosper. I’m delighted to see the Islamic Finance Council’s hard work in this field acknowledged by the EFICA. The Scottish Government is committed to creating a more socially responsible and fairer economy in Scotland and is building upon our progress to become a worldwide industry leader in the field.”

Since the issuance to the public, in 2013, of its report on the purpose of economic activity the Church of Scotland has promoted a range of new initiatives including the development of the Churches Mutual Credit Union in partnership with other UK churches and support for WEvolution, a pioneering movement developing Self Reliant Groups and social enterprise in Scotland’s poorest communities.

Rev Sally Foster-Fulton, convener of the Church of Scotland’s Church & Society Council said: “In the Church we don’t just want to talk about how we need to do things differently. We want to demonstrate how we can and are. Working with the Islamic Finance Council UK is an important part of that work. Not only are we trying to build a fairer economy together. We are also building vital friendships and relationships across our faiths. That is also really significant in today’s world where these relationships are so often defined by division.”

Scotland’s leading Sunni Muslim theologian, Shaykh Ryzwan commented, “Today marks the beginning of extensive consultation between Muslim faith representatives headed by IFC and its associates and the Church of Scotland on working towards a shared principles framework distilled from the intellectual legacy of the two great faith traditions that will inform the debate on ethical and sustainable models of economy. As the financial crisis of the last decade is being pushed firmly to the back of the collective memory, the systemic non-sustainability of the current financial model further amplifies the need to highlight alternative practice that places human nurturing and the environment at the core of deliberation on what economy should be.

In doing so, it also engages those that question the relevance of religion in the creation of the common good, and provides a new model of Interfaith engagement - moving from dialogue to action. The Scottish context of this initiative, with its unique history in the development of the Enlightenment, in ethical banking as well as its pioneering ecumenical work, serves as the perfect environment in which to embark on this journey.”

UK leading innovation as a global financial hub

Prime Minister David Cameron has stated the UK’s position as a center for Islamic finance. As the first Western government to issue a sovereign sukuk, today’s pioneering development of interfaith collaboration showcases the UK’s ability to innovation and contribute to the global Islamic finance sector.

Lord Sheikh, Patron of the Islamic Finance Council UK and Co-Chair of the All-Party Parliamentary Group on Islamic Finance and Diversity in Financial Markets, said, “The UK has successful positioned itself as the leading Western Hub for Islamic finance with over £20bn in shariah-compliant assets. This pioneering retail focused initiative presents a great opportunity to build not only a robust sustainable business but also demonstrates British communities working together building stronger, interdependent communities.”

 

For more information contact:

Chris Tait, Islamic Finance Council UK
chris@ukifc.com
(m) 07931103573

Rob Flett, Communications Manager, Church of Scotland
rflett@churchofscotland.org.uk
(m) 07764 335793

 

About the Islamic Finance Council UK

The Islamic Finance Council UK (IFC) is a specialist advisory and development body established to promote and enhance the global Islamic and ethical finance industry. Operating since 2005, the IFC Executive Board brings together a unique blend of seasoned practitioners who are recognised leaders in the Islamic finance market and have worked for leading global institutions. The Council has successfully pioneered a number of unique developmental and educational programmes.

www.ukifc.com

 

About the Church of Scotland

The Church of Scotland is Scotland’s national church and is also one of the UK’s largest charities. It serves almost 400,000 members, with more regularly involved in local congregations and our community work. Within the organisation, the Church has around 800 ministers serving in parishes and chaplaincies, supported by professional and administrative staff. The Church has a proud tradition of working to benefit those less well off in society, and campaigns on a range of economic and social welfare issues.

www.churchofscotland.org.uk

END.


Christians and Muslims forge ahead with pioneering ethical finance plans

A world leading interfaith initiative aimed at creating a practical ethical financial solution will move a step closer on Monday (24th  October 2016) at a private round table to be held in the House of Lords in London.

MEDIA RELEASE
Monday 24th October 2016

 

The Church of Scotland and Islamic Finance Council UK are convening the unique gathering of faith leaders, parliamentarians, and finance practitioners to agree a shared values framework upon which a financial solution, open to all in society, will be developed.

The joint venture, t he culmination of many years of dialogue, was launched earlier this year in response to the systemic failure and non-sustainability of the current financial model that has struggled to recover from the economic, operational and reputational damage caused by the global crisis in 2008/09. By developing a pioneering new model of interfaith engagement the initiative aims to move from dialogue to action by creating a fairer, more socially responsible financial system.

According to the Rev Dr Richard Frazer, convener of the Church of Scotland’s Church & Society Council: “Two of the most important tasks that we face as a society are developing a fairer and more sustainable economy – one which has a passion for equality at its heart – and building stronger relationships across faith communities. This initiative does both and it is hugely exciting to be a part of it.”

The event is the second in a series of three workshops. The first, held in Edinburgh in May 2016, reviewed the theological and philosophical underpinnings of Christianity and Islam in order to identify commonalities. Shared values identified during the discussions included: our role as stewards on a planet with limited natural resources, tackling excess and greed and encouraging moral responsibility.

At the House of Lords workshop on Monday the shared values framework will be reviewed and refined before participants explore the practical obstacles to realising a vision of ethical finance today. Leading asset managers, banks and economists will share their insights on different type of economic model where ethical finance deepens the economy, encourages inclusion and creates positive social impact.

Omar Shaikh of the Islamic Finance Council UK commented: “We are delighted with the positive response received from parliamentarians and practitioners which reinforces the significance of this initiative. Bringing the debate to the heart of London, a leading a global financial centre, sends a strong international message that faith communities can work together for the greater good of society.”

The initiative emerged from an Interfaith Ethical Finance Roundtable, attended by the Archbishop of

Canterbury Justin Welby, in 2013 and the Church of England continues to take an active involvement. “The need for a fairer, more ethical banking system has never been more pressing. What emerged clearly in 2013 is that those from faith perspectives have an important contribution to make in creating a shared solution for the industry and the communities that they serve. I look forward to contributing to the development of a solution in the months and years ahead.” Ed Mason, Church of England.

It is expected that the shared values framework, the first of its kind globally, will be announced early next year, informing the development of a viable ethical finance business solution.

 

For more information contact:

Chris Tait, Islamic Finance Council UK
chris@ukifc.com
(m) 07931103573

Rob Flett, Communications Manager, Church of Scotland
rflett@churchofscotland.org.uk
(m) 07764 335793

 

 

About the Islamic Finance Council UK

The UKIFC was established in 2005 as a specialist advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. As a dynamic and forwardthinking not-for-profit organisation the UKIFC’s Advisory Board Members, who provide pro bono support, have defined and evolved the role the organisation plays in making a tangible impact in the global Islamic and ethical finance sectors. Principle service areas are: Advisory, Ethical Finance, Training and Awareness and Thought Leadership.

The UKIFC has been recognised globally for its work in promoting shared values and increasing connectivity between ethical and Islamic finance stakeholders across the UK. For more than 5 years the UKIFC has been leading an award winning debate on ethical finance through a series of events based in Edinburgh.

www.ukifc.com

 

About the Church of Scotland

The Church of Scotland is Scotland’s national church and is also one of the UK’s largest charities. It serves almost 400,000 members, with more regularly involved in local congregations and our community work. Within the organisation, the Church has around 800 ministers serving in parishes and chaplaincies, supported by professional and administrative staff. The Church has a proud tradition of working to benefit those less well off in society, and campaigns on a range of economic and social welfare issues.

www.churchofscotland.org.uk

 

END.