GEFI and UKIFC host Unlocking Islamic Finance Power Roundtable
Unlocking Islamic Finance Power Roundtable hosted at Simmons and Simmons
Following the Path to COP28 Sustainable Finance Summit, a select group of Islamic finance and sustainable finance practitioners gathered to discuss the alignment of Islamic finance with sustainability and the SDGs.
Regional and international financial institutions shared their experience on navigating both the conventional SDG financial market and the Islamic finance market to expedite the incorporation of the UN SDGs into Shariah products. Participants emphasized how Islamic finance is rooted in an ethical approach, but development in terms of ESG has been highly uneven.
However, the Islamic finance sector needs to act decisively on sustainability. At COP28 all eyes will be on the finance sector in the GCC, so being seen to be doing nothing is not an option, and sustainability is vital to capturing a younger generation of consumers.
Several institutions pointed to the value of “soft law” frameworks such as UN PRI and UN PRB in providing a clear action plan on sustainability. This means both to offering individual sustainability products and, perhaps more importantly, incorporating sustainability into general operations. The latter requires training at every level of an organisation, starting at the top.
There is a need to understand what consumers want, which the recent UKIFC study into Islamic banking customers and the SDGs does. Once this is established, consumers can be educated about what Islamic finance can do, and how it can do it: this can be a challenge for an acronym-heavy industry usually modest about its achievements.
This modesty is a key limitation to the global expansion of Islamic finance, hampering international awareness of the opportunities associated with it, the differentials to conventional banking (e.g. how late payment fees are handled more ethically in Islamic finance), and the pricing and commercial positioning advantages (e.g. sukuk’s resilience to price shocks in emerging markets).
COP28 presents a key moment to catalyse action in sustainable Islamic finance, drive awareness and uptake of the UN PRB and PRI, and contribute towards climate action.
Learn more about the UKIFC’s new Islamic finance and the SDGs: Retail banking customer perspectives report.
Unlocking Islamic Finance Power Roundtable hosted at Simmons and Simmons
Following the Path to COP28 Sustainable Finance Summit, a select group of Islamic finance and sustainable finance practitioners gathered to discuss the alignment of Islamic finance with sustainability and the SDGs.
Regional and international financial institutions shared their experience on navigating both the conventional SDG financial market and the Islamic finance market to expedite the incorporation of the UN SDGs into Shariah products. Participants emphasized how Islamic finance is rooted in an ethical approach, but development in terms of ESG has been highly uneven.
However, the Islamic finance sector needs to act decisively on sustainability. At COP28 all eyes will be on the finance sector in the GCC, so being seen to be doing nothing is not an option, and sustainability is vital to capturing a younger generation of consumers.
Several institutions pointed to the value of “soft law” frameworks such as UN PRI and UN PRB in providing a clear action plan on sustainability. This means both to offering individual sustainability products and, perhaps more importantly, incorporating sustainability into general operations. The latter requires training at every level of an organisation, starting at the top.
There is a need to understand what consumers want, which the recent UKIFC study into Islamic banking customers and the SDGs does. Once this is established, consumers can be educated about what Islamic finance can do, and how it can do it: this can be a challenge for an acronym-heavy industry usually modest about its achievements.
This modesty is a key limitation to the global expansion of Islamic finance, hampering international awareness of the opportunities associated with it, the differentials to conventional banking (e.g. how late payment fees are handled more ethically in Islamic finance), and the pricing and commercial positioning advantages (e.g. sukuk’s resilience to price shocks in emerging markets).
COP28 presents a key moment to catalyse action in sustainable Islamic finance, drive awareness and uptake of the UN PRB and PRI, and contribute towards climate action.
Learn more about the UKIFC’s new Islamic finance and the SDGs: Retail banking customer perspectives report.
GEFI host UN Principles for Responsible Banking Power Roundtable in Dubai
UN Principles for Responsible Banking Power Roundtable hosted at EY
At a private Power Roundtable designed to foster a collaborative – rather than competitive – atmosphere, UN Principles for Responsible Banking (PRB) signatories shared their experiences with financial institutions considering becoming signatories. The event featured 5 UAE-based banks, 4 global banks and 3 banks based in the UK and Australia.
At the event, current signatories highlighted the benefits from a comprehensive framework that aligns with science-based targets, offers engagement with credible third-party alliances, and promotes top-down engagement and education for board members and decision makers through UN-sponsored working groups.
Experience shows that this framework has helped financial institutions in setting credible climate transitions plans and in engaging their clients on this journey, where they would have otherwise struggled with setting their own measurement tools and statistics. The costs of PRB implementation were discussed to be manageable for smaller banks – as they are for largest institutions – as smaller banks are more agile in this context.
Regional challenges and views were also considered, such as the dependance of the region’s GDP on oil and gas. PRB signatories shared their approach to facing these challenges within their own jurisdiction. A solution was hiring non-banking expert teams of scientists, engineers, and academics to offer robust decisions aligned with the Paris Agreement targets.
Other key decisions included selecting projects to finance, reinvesting proceeds from oil and gas projects into ESG-focused projects instead to offset their carbon footprints and creating innovation centers for start-ups and companies to provide investable ESG solutions. Some of the key lessons learned from signatories regarding the incorporation of the Principles were that it has to be from the top down.
A key engagement and education tool offered is the PRB Academy, which focuses on sharing knowledge and skills to professionals as they develop ESG consideration in risk and asset management. The Academy is also extending its global curriculum to make it regionally relevant and to cover nature and biodiversity finance alongside its climate finance curriculum. Emphasis was also made on the significance of public scrutiny, and COP28 will be that for the region; therefore, it is essential that institutions align their operations accordingly.
Learn more about the Path to COP28 campaign, and how it is driving action from finance at this year’s summit at pathtocop28.com.
UN Principles for Responsible Banking Power Roundtable hosted at EY
At a private Power Roundtable designed to foster a collaborative – rather than competitive – atmosphere, UN Principles for Responsible Banking (PRB) signatories shared their experiences with financial institutions considering becoming signatories. The event featured 5 UAE-based banks, 4 global banks and 3 banks based in the UK and Australia.
At the event, current signatories highlighted the benefits from a comprehensive framework that aligns with science-based targets, offers engagement with credible third-party alliances, and promotes top-down engagement and education for board members and decision makers through UN-sponsored working groups.
Experience shows that this framework has helped financial institutions in setting credible climate transitions plans and in engaging their clients on this journey, where they would have otherwise struggled with setting their own measurement tools and statistics. The costs of PRB implementation were discussed to be manageable for smaller banks – as they are for largest institutions – as smaller banks are more agile in this context.
Regional challenges and views were also considered, such as the dependance of the region’s GDP on oil and gas. PRB signatories shared their approach to facing these challenges within their own jurisdiction. A solution was hiring non-banking expert teams of scientists, engineers, and academics to offer robust decisions aligned with the Paris Agreement targets.
Other key decisions included selecting projects to finance, reinvesting proceeds from oil and gas projects into ESG-focused projects instead to offset their carbon footprints and creating innovation centers for start-ups and companies to provide investable ESG solutions. Some of the key lessons learned from signatories regarding the incorporation of the Principles were that it has to be from the top down.
A key engagement and education tool offered is the PRB Academy, which focuses on sharing knowledge and skills to professionals as they develop ESG consideration in risk and asset management. The Academy is also extending its global curriculum to make it regionally relevant and to cover nature and biodiversity finance alongside its climate finance curriculum. Emphasis was also made on the significance of public scrutiny, and COP28 will be that for the region; therefore, it is essential that institutions align their operations accordingly.
Learn more about the Path to COP28 campaign, and how it is driving action from finance at this year’s summit at pathtocop28.com.
GEFI host Sustainable Finance Summit Series in Dubai
Sustainable Finance Summit Series hosted at DIFC
Our Path to COP28 Sustainable Finance Summit series began with words of welcome from Dame Heather McGregor, Omar Shaikh, and Christian Kunz of hosts DIFC.
Simon Thompson of The Chartered Banker Institute then presented a keynote address on how the industry can drive success at the Dubai summit, highlighting the Principles for Responsible Banking Academy.
Next, a panel featuring Sebastian Frederiks from ING, Nadia Boumeziout from Zurich Insurance, and Dr Maria Carvalho from NatWest Group moderated by Dame Heather McGregor, discussed the practical implementation of sustainable finance principles into strategic decision-making.
Eline Skeurink then delivered a presentation on Principles for Responsible Investment and their role in supporting signatories in the Middle East and globally in their responsible investment activity, before Sultan Choudhury OBE from Islamic Finance Council UK (UKIFC) presented the findings of the UKIFC Global Islamic Finance Retail Banking Survey (click here to download the report).
The second and final panel saw Charles Haresnape from Gatehouse Bank plc, Mohieddine (Dino) Kronfol from Franklin Templeton, and Christian Gueckel from SEDCO Capital | سدكو كابيتال join Mustafa Adil from LSEG (London Stock Exchange Group)/Refinitiv, an LSEG business. The panel built on Sultan’s presentation, discussing how to unlock Islamic finance at COP28.
Learn more about the Path to COP28 campaign, and how it is driving action from finance at this year’s summit at pathtocop28.com, or visit our event page to find out more about the second in the series.
Sustainable Finance Summit Series hosted at DIFC
Our Path to COP28 Sustainable Finance Summit series began with words of welcome from Dame Heather McGregor, Omar Shaikh, and Christian Kunz of hosts DIFC.
Simon Thompson of The Chartered Banker Institute then presented a keynote address on how the industry can drive success at the Dubai summit, highlighting the Principles for Responsible Banking Academy.
Next, a panel featuring Sebastian Frederiks from ING, Nadia Boumeziout from Zurich Insurance, and Dr Maria Carvalho from NatWest Group moderated by Dame Heather McGregor, discussed the practical implementation of sustainable finance principles into strategic decision-making.
Eline Skeurink then delivered a presentation on Principles for Responsible Investment and their role in supporting signatories in the Middle East and globally in their responsible investment activity, before Sultan Choudhury OBE from Islamic Finance Council UK (UKIFC) presented the findings of the UKIFC Global Islamic Finance Retail Banking Survey (click here to download the report).
The second and final panel saw Charles Haresnape from Gatehouse Bank plc, Mohieddine (Dino) Kronfol from Franklin Templeton, and Christian Gueckel from SEDCO Capital | سدكو كابيتال join Mustafa Adil from LSEG (London Stock Exchange Group)/Refinitiv, an LSEG business. The panel built on Sultan’s presentation, discussing how to unlock Islamic finance at COP28.
Learn more about the Path to COP28 campaign, and how it is driving action from finance at this year’s summit at pathtocop28.com, or visit our event page to find out more about the second in the series.
Festive Fireside | Wrapping Up 2022 & Unwrapping 2023
Our final event of 2022 saw us wrap up the year just gone and look ahead of 2023 with Amanda Young of abrdn, Thom Kenrick of NatWest Group, Dr Sarah Ivory of the University of Edinburgh, David Pitt-Watson of Cambridge Judge Business School and GEFI's own Graham Burnside.
The discussion opened by considering the impact of energy crisis on the continued adoption of renewable technologies, and the role that the newfound important of energy independence will play in future energy policy.
As the sector has matured, there are growing concerns about whether ESG departments are overstretched. As most of the panellists emphasised, experienced sustainable finance professionals are in high demand within their organisations, which can lead to burnout: Amanda Young suggested a need to "Make Sustainable InvestingFun Again".
With all this, there is a risk of watering down boundaries, a risk highlighted by the number of funds around the world downgraded in response to more stringent regulations, though interestingly not to any great extent in Scotland's fund management community.
Some on the panel argued that there is a need to ensure the E, S and G are considered together, possibly by emphasising the actual problems that finance seeks to solve, rather than the broad categories into which those problems fall. For example, rather than using environment, specify climate change, or biodiversity.
Finally, the panel suggested their 1 thing to focus on for the coming year:
Amanda Young: Make Sustainable Investing Fun Again
Thom Kenrick: steer the economy through the cost of living crisis
Dr Sarah Ivory: focus on professional skills in finance
David Pitt-Watson: every company must consider how they contribute to climate change in generating profit
Wrapping up 2022 and unwrapping 2023 | Ethical Finance Round Table
Our final event of 2022 will be our traditional year-end Ethical Finance Round Table. This returns as an in-person event on Tuesday, 13 December at 10:30-12:00pm at RBS Accelerator, 36 Saint Andrew Square, Edinburgh.
Our speakers will reflect on 2022 and look ahead to 2023. They will dissect the impact Ukraine, COP27 and the cost of living crisis have had on finance, before turning their thoughts to the coming year, including COP28 in Dubai, with time for networking after the formal proceedings.
The speakers will be:
- David Pitt-Watson, Visiting Fellow, Cambridge Judge Business School
- Amanda Young, Chief Sustainability Officer, abrdn
- Thom Kenrick, Head of Social Strategy and Impact, NatWest Group
- Dr Sarah Ivory, Senior Lecturer in Climate Change and Business Strategy, University of Edinburgh Business
Click here to sign up now.
Adam Smith, climate, COP and natural capital | David Pitt-Watson | The Radical Old Idea
Watch our Radical Old Idea interview on Adam Smith with David Pitt-Watson, responsible investing pioneer and Cambridge Judge Business School. As COP27 came to a close, our researcher Sam Wheldon-Bayes spoke to David about Smith, the climate crisis, COP and natural capital.
In the interview, filmed at Adam Smith's Panmure House, where the Enlightenment scholar once lived, David discusses what Smith would have thought about climate, COP and natural capital, applying these lessons to some of the big questions facing modern policymakers. The discussion draws on the Wealth of Nations in the 21st Century essay series, which he contributed to.
As David argues, some of Smith's modern devotees dramatically misunderstand his beliefs. In the face of a collective challenge such as climate change, it is unlikely Smith would have proposed a free-market, low-regulation approach, but rather advocated effective regulation.
"Channel your inner 3-year-old" | The Radical Old Idea with Dr Katherine Trebeck, on the Economics of Arrival
Why is it necessary to "channel your inner 3-year-old" to reshape the economy?
At our Radical Old Idea event, Dr. Katherine Trebeck explained the basics of her recent book the Economics of Arrival to Kaisie Rayner. For Dr Trebeck, economics should be focused not on growing indefinitely, but instead on point of "arrival": a destination that, once reached, allows us to "make ourselves at home". To get here we must channel that inner 3-year-old, to constantly ask "why?".
Why do we need more growth?
Why do we need to work 40-hour-weeks?
Why can someone work a full-time job and still be in poverty?
This focuses the mind on the point of arrival. The lack of an endpoint leaves our economies directionless, focusing too much "helping people and planet cope", remedying social aches and pains without treating their root causes.
As she explained, growth up to a point is good, providing us with the means to live a decent life. In particular, growing the incomes of the poorest in society delivers results. However, beyond a certain point, it ceases to increase happiness (in development economics, this is often known as the 'Easterlin paradox'). Just like eating ice-cream, the first few mouthfuls are incredible, but after a while, each extra spoon provides less joy than the previous one.
Building on the food metaphor, she pointed out that growth should be a means to an end. Growth for growth's sake is akin to walking into a restaurant and shouting "more!". It's far more important to know what it is that you want more of, such as looking after citizens, providing food, health services, and a decent material standard of living.
Some examples of economies that have arrived, or have the potential to arrive, include Japan and Costa Rica. Japan has a high standard of living, and relatively low inequality without extensive redistrubution. However, without a clear endpoint, the country suffers from high worker stress, when in fact it could "take its foot off the pedal" and lead a better life by slowing down.
Another exaple is that of Costa Rica, which is a middle income country that has thrived in terms of health, social and nature outcomes, because it has focused on outcomes rather than economic growth for its own sake.
The event concluded with a lively audience discussion which looked at how to practically ditch GDP, whether the focus on predistribution over redistribution was viable, the role of elites and more.
Find the Economics of Arrival at https://policy.bristoluniversitypress.co.uk/the-economics-of-arrival
"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.
John Kay joined us today to discuss the difference between risk and uncertainty, what this means for finance and how societies can collectively deal with the unknown by ensuring systems build in resilience.
As John explained to series host Kaisie Rayner FRSA, risk can be estimated, while uncertainty is truly unknowable, a distinction forged in the wake of the Great Depression.
Over the last half century, finance and economics have gradually merged these two concepts. The economist Milton Friedman explicitly stated, in his quest to model society as a collection of perfectly informed utility maximiser.
This reflects a general bias towards quantifying phenomena among policymakers, a fear of the unknown and the unknowable. Models should be treated not as quantitative answers to these intractable problem, but rather tools to be used to organise thinking.
Sir John Kay argued that this is reflected in the paradox of the perfect map; if a map were to represent reality perfectly, it would be a 1:1 copy of it, and therefore no map at all.
What a map or model should do is simplify information in a way that retains what is useful while cutting out other information. London’s Tube map is a great way of navigating the city by train, but much less helpful on foot.
By treating models as gospel, rather than helpful simplifications, we risk ignoring that which has been left out. Resilience and robustness – which are key to dealing with uncertainty – will be viewed as inefficiency.
An example of this is the global financial crisis, where sophisticated risk modelling and the unrelenting pursuit of profit sidelined experienced professional judgement. Another is that of privatisation of public services, where resilience and robustness can be cut to make profit, with the state ready to step in if the unexpected does happen.
Purchase Radical Uncertainty: https://lnkd.in/epTk7ujb or https://lnkd.in/gHD4h5P3
Find out more about our Radical Old Idea series https://lnkd.in/eKYu2uny
Watch the full webinar on our YouTube page.