"Forgive me father, for I have measure" | Leadership and Purpose | Ethical Finance Global 2022
"Forgive me father, for I have measured"
An eclectic conversation between Simon Thompson of The Chartered Banker Institute, Sarah Birrell Ivory of University of Edinburgh Business School and Will Goodhart of CFA UK saw us close out a wonderful day of debate and discussion at Ethical Finance Global 2022.
With no moderator to keep the peace, a freewheeling and entertaining conversation between the trio asked how to translate the day's good intentions into action.
They pondered whether the ceaseless call for better data is a sin against real activity, how professional education and professional values can produce socially and environmentally aware employees, the need for leaders to listen, and everything in between.
Watch now at https://youtu.be/D5u4gvpFOVY.
Geopolitical Risk and Ethical Finance | Ethical Finance Global 2022
What does the war in Ukraine mean for energy policy? Where does China fit in on sustainable finance efforts?
In an excellent first panel from Ethical Finance Global 2022, with Dame Susan Rice FSCB, Agi Veres, UNDP, Stephen Hibbert, ING and Leon Kamhi, Federated Hermes engaged in a wide-ranging discussion.
They discussed China's progress on sustainability and sustainable finance, and its vital role in delivering green infrastructure at the scale needed for the world's net zero transition.
Another topic was the energy crisis, and the tensions inherent in balancing environmental and social sustainability, the differing rates of inflation in society and whether the rise in prices brought about by the war in Ukraine justify rolling back commitments made on fossil fuel financing; according to ING, they do not.
Finally, participants discussed the need for companies to protect their lowest paid workers from the crisis, and the role that younger eployees, who are more purpose-oriented, have had on transforming their places of work.
Watch now at https://www.youtube.com/watch?v=9ru4QUM3F8k.
Achieving Net Zero | Ethical Finance Global 2022
James Wilde of Phoenix Group, Eva Cairns of abrdn and Chris Hayward of City of London Corporation joined our Ethical Finance Global 2022 climate change panel, with David Pitt-Watson as moderator. Watch now at
The panel was focused on fielding questions from the audience, with a number of insightful contributions from those gathered. The session looked at the different initiatives present in the market, the role of metrics and their reflection of reality and the need for deep engagement with companies.
In particular, Eva remarked that "you can divest quickly with a low carbon portfolio… but you haven’t actually moved anything in the real world". A net zero portfolio can be achieved by excluding high-emission sectors, but as sectors such as cement are likely to be economically useful, this may do nothing to transition towards a clean economy as a whole.
James Wilde emphasised the need for a long-term view, and argued for greater collaboration between the constituent parts of a normally competitive sector, in order to address the climate crisis.
Closing the session, Chris Hayward issued a rousing call for politicians and financiers to shed their "short timescales", reject the ease of saying "let the millennials sort this out" and take responsibility for the crisis.
Watch now at https://www.youtube.com/watch?v=StsHWeGkcF4
Impact Investing: Verification under the Operating Principles for Impact Management
Embedding impact is a challenge and so is its verification. There has been limited guidance on it in the market. To address this challenge, the International Finance Corporation (IFC) launched the Operating Principles for Impact Management (the Impact Principles) in April 2019.
What are the Impact Principles?
The Impact Principles provide a framework of leading market practice for investors for the design and implementation of their impact management systems across the investment lifecycle.
Source: https://www.impactprinciples.org/
The Impact Principles are not limited to specific types of impact investors, sectors, geographies or asset types but are widely applicable and can be adopted for specific funds or vehicles or the portfolio. There are currently more than 150 signatories from more than 35 countries with AUM exceeding $450 million.
Why are the Impact Principles important?
Investors new to impact can use it as the start of their impact journey to design their systems and processes and investors that are already operating in impact can use it to benchmark their practice and look for areas of improvement.
The Impact Principles provide a structure for embedding impact. Each principle has action points and associated guidance, found here.
Becoming a signatory and undergoing verification
An organisation must first submit a Signatory Letter confirming its adoption of the Impact Principles. Within 12 months and annually thereafter, signatories must produce a Disclosure Statement in a standardised format describing their alignment with the Impact Principles. The Disclosure Statement is published on the Impact Principles as well as the signatories’ website.
Alongside the Disclosure Statement the alignment of the impact management systems and processes with the Impact Principles must be independently verified. The frequency of verification is not mandated by the Impact Principles, instead signatories must disclose the frequency of verification along with the reason for their choice.
GEFI’s verification for SIS Ventures
Principle 9 of the Impact Principles requires signatory investors to “[p]ublicly disclose alignment with the Impact Principles and provide independent verification of the alignment”.
In accordance with Principle 9, GEFI has recently completed the verification of the impact management systems and processes for SIS Ventures. Formed in 2018, SIS Ventures is a part of the Social Investment Scotland Group, a leading Scottish impact investor. SIS Ventures’ aim is to support and grow high impact organisations through access to mission-aligned investment and it became a signatory of the Impact Principles in July 2021.
GEFI reviewed and documented SIS Ventures’ impact management systems and processes in line with each of the Impact Principles in turn. This was done through interviews with staff and review of key documentation. GEFI produced the verification statement and provided SIS Ventures with recommendations on how its impact management systems and processes could be further developed.
Next step for verification methodology
As an independent verifier, GEFI developed its own methodology to complete the verification.
Tideline, an impact investing consultant, has produced a report on investor alignment with the Impact Principles which includes verification methodology and scoring.
Verifiers developing their own verification methodology has both pros and cons. On one hand, innovation and experimentation are needed in this relatively new field. On the other, there is a risk that different methodologies may end up undermining the integrity of the verification process.
Moving forward, the Impact Principles may benefit from releasing methodology guidance and checklists for verifiers to ensure that verifications are completed in a standardised or similar way.
SIS Ventures quote
“As signatories to the Operating Principles for Impact Management we need to work with external experts to satisfy the requirements of Principle 9. The team at Global Ethical Finance Initiative were methodical and robust in their verification approach, whilst also highly professional and approachable. The team also provided us with a useful short report on how we could further improve our impact processes and this will help inform our future practice. I would confidently recommend GEFI’s services in this area to others.” Lindsay Wake, Head of Impact, Social Investment Scotland.
Please join us in Edinburgh on 6 September 2022 for our annual ethical finance summit, “ESG in a Volatile World – Profit, Purpose or Politics?”
Ethical Finance Global 2022 - summit announced
We are delighted to formally announce the launch of Ethical Finance Global 2022, which will take place as an in-person event on 6th September 2022 in Edinburgh hosted by NatWest Group.
The summit is the premier event in ethical finance, and is themed 'ESG in a Volatile World: Profit, Principles or Politics'. It will tackle three core thematics: climate, nature and social. Confirmed speakers include Rt. Hon. Alok Sharma MP, Sarah Breeden, Saker Nusseibeh and Anshula Kant. Click here to find out more.
Our in-person events offer a unique ability to forge connections, and over the years our Summits have built capacity, influenced policy, enabled deals, informed new products, driven framework commitments, helped deploy capital to the SDGs and developed lifelong friendships. If you have attended our flagship global Summit in the past, we would love to see you again in September; if not, then now is your chance!
As well as looking at macroeconomic issues impacting global markets, we will have specific sessions on topics including:
- The growing impact of conflict and geopolitics in ESG
- Core global challenges in financing climate adaptation and mitigation
- The role of finance in protecting and restoring nature and biodiversity
- The emergence of the S in ESG as a core priority
- The role of financial leaders in defining organisational purpose
- Financing the SDGs
Sign up now at https://www.eventbrite.co.uk/e/ethical-finance-global-2022-esg-in-a-volatile-world-registration-349512941617?aff=blog, using the code 'EARLY20' for a 20% early bird discount.
