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No more delays: What the new IPCC AR6 synthesis report means for the finance industry

To those of us involved in environmental action every day, the release of each IPCC report can seem somewhat anti-climactic. The report represents an impressively detailed description of the horrifying impacts of climate change, and a sobering assessment of the progress made so far by humanity to address it.

In some ways, the release of publications like the IPCC AR6 Synthesis Report tells us only what we already know: there is a serious problem which we are running out of time to solve. However, the sermon is intended not only for choir, but the congregation too.

Sadiq Khan, the Labour Mayor of London, and Chris Skidmore, a Conservative UK MP launched a cross-party initiative to tackle climate inaction this week. As they state in an excellent article in support of it, climate denialism has given way to ‘climate delayism’.

Thanks to the excellent work of the IPCC, laying out in meticulous detail the science of climate change, denial of climate change is no longer an intellectually credible position. Those who once denied now claim to accept the science, but raise all sorts of bad-faith arguments to obstruct, delay and minimise action to address the problem.

Reading the AR6 Synthesis Report makes clear that delay is just as bad as denial. We can still limit temperature rises to 1.5C, but only with swift, significant action. Doing that, as the final section of the report makes clear, relies on the finance industry.

Achieving the goals of the Paris Agreement will require massive shifts in the patterns financial flows, which require effective regulation, incentives, public-private partnerships and bold action from the finance industry.

The report also notes that the finance industry itself is at risk from the physical and transitional risks associated with climate change. To address these, the report calls for a coordinated global response that includes climate-related financial disclosures, stress tests, and scenario analysis.

As an industry, finance must not allow our delayers to get the best of us. There will always be better data tomorrow. There will always be a clearer regulatory picture next week. There will always be more lucrative subsidies in a month’s time. We must focus on what is important: immediate action.

Future generations will not judge us for choosing a marginally less efficient course of action: they will judge us for knowing what needs doing yet still delaying.

by Sam

Lord Mayor of the City of London visits Edinburgh to meet with Nicola Sturgeon

After a series of meetings between senior Scottish Government and City of London officials, including First Minister Nicola Sturgeon and Lord Mayor Nick Lyons, GEFI convened financiers and policymakers at Phoenix Group’s Edinburgh offices last week on 24th January.

The panel featured Amanda Young, abrdn, Richard Rollison, Scottish Government, Chris Hayward, The City of London, David Pitt-Watson, Cambridge Judge Business School and Dame Susan Rice, GEFI & The Financial Services Culture Board, and came together to discuss the nature of collaboration between Scotland and London on finance, and the role that Scotland’s sustainable finance community can play.

The discussion emphasised that Scotland has power in the investment space, in particular in regards to sustainability and ethical investment where it is leading the way with a community of sustainable finance practitioners.
This is in part down to the size of the industry: people know each other in a way that is difficult in a city as large as London. Another factor is the disproportionate number of SMEs in the Scottish economy.

Scotland’s strengths are in long-term investing, and in values-led approaches such as sustainable investing, which means it complements the City of London’s global reach. Panellists emphasised that there is not a competition between London and Scotland: we all bring different things to the equation and many people in Scotland have deep ties to London.

Overall, the scale of problems like climate change can feel huge, but focusing on tangible actions in a specific place can be a fantastic start.

Watch Chris Hayward and Richard Rollison outline their view on Scotland-London collaboration.

by Sam

Job Vacancy: Could You Be Our Next Digital Marketing Manager?

The Global Ethical Finance Initiative (GEFI) has become the hub at the centre of the ethical finance movement. We undertake advocacy through curating independent conversations among a broad coalition of financial services stakeholders, as well as research, advisory work and delivering practical projects. We are the partner for action on ethical finance.

From our Edinburgh base, we are a non-profit with a global footprint. We are supported by the Scottish Government and several major financial institutions including Baillie Gifford and NatWest Group. We also work in partnership with global multilateral institutions, such as the United Nations. Our wider organisation includes the Ethical Finance Hub, Islamic Finance Council UK, SDG Tartan and EFx.global.

With ethical finance moving from the niche to the norm, the level of interest in our work has grown considerably. To meet demand, we are now expanding and have an exciting opportunity for an experienced Digital Marketing Manager to join our growing team to lead on the planning and delivery of our marketing, website and social media strategies for 2022 and beyond.

This is a truly unique opportunity to work in partnership with Governments, regulators, financial institutions, and other financial services stakeholders from across the globe.

Do you have the experience, passion, and drive to make a difference within a high-end purpose-led organisation? If so, read on!

Your Profile and Responsibilities

You will report to our Chief Operating Officer and have responsibility for the management and day-to-day running of our websites (WordPress) and social media channels (Twitter, LinkedIn and any others as appropriate). With several websites across our portfolio, you must understand the design and build process and be confident in restructuring existing pages, creating new pages and adding content in a synchronized manner. You will also be expected to develop and manage our social media calendar in collaboration with colleagues and produce engaging, dynamic content (including written copy, infographics and basic video content).

You will also lead on the development and delivery of our marketing and content strategies across our initiatives. You will contribute to our strategic planning to identify and implement digital marketing tactics that support the achievement of our objectives. This will include taking ownership of all analytics and reporting for content marketing efforts and SEO efforts for web and digital content. You will also be confident analysing trends to recommend best practice approaches to ensure continuous improvement.

As well as promoting the GEFI (and associated) brand(s) your digital expertise will play a critical role in maximising external engagement across our 5 principle areas:

• Strategic Campaigns
• Research and Advisory
• Capacity Building
• Practical Solutions
• Events.

This year we are piloting a Youth Sustainable Finance Champion programme where you will responsible for managing the first cohort of up to three students. This will involve assisting with on-boarding, providing training and overseeing digital content production (e.g. tweets and blogs).

This is a critical role within the GEFI operation as we seek to raise awareness, educate and inspire practical action to make the financial system work for positive change.

Your Skills and Qualifications

Technical Skills

• Degree (or qualifications) in marketing, design, business, or related field or equivalent in experience
• High standard of literacy and numeracy
• Proficient across the whole Microsoft Office Suite
• Ability to convey the right tone of voice across relevant target audiences and digital assets
• Skilled in creating and maintaining engaging and interactive websites
• Proficient in using WordPress to publish posts, pages, add media, contact forms, set menus, permalinks, familiar with SEO best practice, plugins and themes
• Track record of using hootsuite to plan, manage and measure follower-growth and development strategies across Twitter and Linkedln
• Graphic design skills ranging from the design features in Word and PowerPoint to Photoshop (or equivalent), video-editing and design programmes such as Canva and Adobe InDesign
• Video production and editing skills (specifically using Adobe Premiere Pro or equivalent)
• Experience in using MailChimp to design and deploy email campaigns
• Experience in setting up and managing Zoom meetings and webinars

Soft Skills

• Creative thinker with strong project management, multitasking, and decision-making skills
• Able to take ownership of day-to-day tasks and prioritise workload
• Ability to deliver under pressure and work to targets and tight deadlines
• Ability to quickly develop new technical skills as required
• Interpersonal skills with an ability to develop, manage and build relationships with colleagues and external partners
• Attention to detail with the capability to develop / follow processes and procedures, including design languages, to maximise efficiency and output quality
• Proven ability to liaise, co-ordinate and disseminate quality information
• Team player with a ‘can-do’ attitude and willingness to self-evaluate performance to continuously improve
• Enthusiastic and responsible team player with the ability to work with limited supervision
• Committed to and have the flexibility to work hours as determined by the business

In return, we will offer:

If you have a genuine passion for social purpose then this is your chance to be part of a small, friendly team, working at the epicentre of the sustainable finance movement. As a global-facing organisation with local roots, this is a perfect opportunity for a digital marketing specialist seeking to take their next step in

• Full Time and will consider flexible working (such as reduced working day or 4-day week)
• Attractive salary of FTE £30,000 - £35,000 depending on experience
• Initially home-based with weekly in-person team meet-ups in Edinburgh (requirements will be reviewed considering changing Covid circumstances)
• 28 days annual holiday (including bank holidays)
• NEST pension
• Opportunity to grow and develop your career

How to Apply

Closing date for the applications is: Wednesday 25th March 2022

All individuals are encouraged to apply to this post regardless of race, age, disability, ethnicity, nationality, gender, gender reassignment, sexual orientation, religion or belief, marriage, and civil partnership.

To apply, please send your CV and a covering letter outlining your suitability for the role to chris@globalethicalfinance.org.

by GEFI

Embedding the Sustainable Development Goals into commercial, financial products across asset classes

The Global Ethical Finance Initiative (GEFI) will be launching its SDG Financial Products Platform at COP26, showcasing financial products that are aligned to the Sustainable Development Goals (SDGs). The platform will partner with select financial institutions to grow the ecosystem of SDG aligned financial products across a range of asset classes.  

GEFI has been working in sustainable finance for over a decade and has historically focused on advocacy and raising awareness through capacity building and events. We are now moving to deliver practical, private sector led-solutions to drive real change in financial institutions on SDG alignment.  

With COP26 coming to Glasgow in November, there has been a lot of momentum around financial institutions taking action on climate change. There has been an explosion of pledges, frameworks and tools that assist financial institutions in setting and delivering on net zero by 2050. Collective action and enabling initiatives are essential to achieve net zero by 2050 and now is the time for financial institutions to leverage the work that has been done around net zero by 2050 to take action to achieve the SDGs by the earlier deadline of 2030.  

One of the seventeen SDGs is focused on climate action, but there are a further sixteen goals such as ending poverty, improving health, reducing inequality and spurring economic growth that all require immediate action. We need to tackle climate change to make sure there is a sustainable future for our planet, but we also need to achieve the SDGs to ensure that there is shared peace and prosperity for the people and planet, now and into the future. There are challenges to be overcome in private sector integration of the SDGs such as how do we measure and report on impact? How do we consider the holistic impact of a project on the SDGs? Is SDG alignment really driving positive change? These are complex issues and require collective thought and action across financial institutions. 

GEFI believes that this next decade needs to be one of action, there must be a system change to align financial institutions to the SDGs and enabling initiatives need to be developed to support this.  

To facilitate action in financial institutions, GEFI is launching its SDG Financial Products Platform at COP26. The platform is based on the belief that private sector led solutions are required to deliver the SDGs. If the SDGs are to be delivered by 2030, the SDGs need to be embedded in private-sector financial products across asset classes.  

The platform partners with select financial institutions to showcase innovative products that are aligned to the SDGs. The platform and partners work together throughout the product lifecycle to share learnings and build the ecosystem of SDG aligned financial products. In a market of increasing virtue signalling, financial products listed on the platform are prequalified. The platform only partners with financial institutions that demonstrate a genuine commitment to the SDGs and have embedded the SDGs in the product listed. 

The platform is the result of a collaboration between GEFI and the United Nations Development Programme (UNDP) to facilitate the development of private sector solutions that are aligned to the SDGs. 

We look forward to launching the platform at COP26 in collaboration with our key partner Aegon Asset Management who launched its Global Sustainable Bond Fund (“GSSBF”) on 22 October 2021. The GSSBF uses a proprietary methodology that incorporates the SDGs into the appraisal of sovereign bonds, investing in financially strong countries that contribute to the improvements in sustainability targets as defined by the SDGs. Further information on the GSSBF can be found here.   

If you would like to find out more about the SDG Financial Products Platform or would like to apply to become a partner, please contact Natalie Jackson at GEFI (natalie@globalethicalfinance.org). 

by GEFI

Fashion & Finance: Funding The Change

With the fashion industry's pollution levels second only to those of the oil industry it is clear change is necessary[1]. The current industry model of fast fashion is inherently unsustainable with the norms of constantly rotating styles that quickly make clothes 'out of fashion'[2]. This fast fashion model is the cause of unimaginable damage to people and planet.

The industry is now a race to the bottom where optimising costs and efficiency in order to operate on narrow margins is a priority[3]. In order to undercut competition’s prices the race leads to the use of cheap, unsustainable materials, exploited garment workers, unsafe working conditions; and a devastating environmental impact caused by factors such as the use of pesticides and textile waste.

The fashion industry is late to the sustainability scene and has brought its fair share of unethical baggage, from greenwashing to a lack of transparency in never-ending supply chains. But the industry cannot make significant (or disruptive) change alone. It needs help from the public and private sector.

Crucially, the Financial Services industry needs to recognise the opportunities they stand to gain in through fashion. According to Fashion for Good and BCG, the Fashion industry requires $20-30bn of financing per year to develop and commercialise disruptive solutions and business models that will move the industry towards sustainability³. It is clear there is a huge financing gap, but the good news is that many viable solutions already exist, with Fashion for Good identifying 1,500 viable innovators within their first two years of operating³. The issue is there is a lack of capital to grow these innovations on a disruptive scale.

So, what can the financial sector do to help?

• Venture Capitalists are being called upon to support, and fund, up and coming innovations within the fashion industry. Due to the technicalities of some innovative projects, particularly those aiming for hard-tech innovations (physical innovations such as the development of a new sustainable material) this is sadly not enough. Brands such as H&M and Patagonia are also investing in early stage hard-tech innovations through Corporate Venture Capital (CVC) investments³. But other fashion companies need to follow suit, and fast, as funding directly from the fashion companies contributes a limited source of capital to sustainable innovators in fashion.
• Specialised funds have also emerged over the past few years to overcome limited experience and expertise preventing investors in pursuing sustainable fashion innovation. Funds such as the Textile Innovation Fund and the Good Fashion Fund provide the means to support 3D printing, chemical recycling and plant-based fibres.
• Blended capital can act as an avenue to reduce the financing gap in fashion. However, public and private collaboration is required to create disruptive change. The Good Fashion Fund already follows this model using private and philanthropic capital from the C&A Foundation.
• Growth capital and private equity investors can invest in growing start-up fashion brands that have big consumer draw and e-commerce distribution. For example in July 2019, Permira announced that it had acquired a majority stake in the ethical fashion brand Reformation.
• Sustainably Linked Loans (SLLs) can provide general corporate financing tied to sustainability KPIs and are another option for the financial sector to help change fashion for the better. The market for SLLs rose from $5 billion in 2017 to $40 billion in 2018³. In November 2019, Prada became the first fashion company to sign a five year €50 million SLL, with Crédit Agricole Group, under the condition that Prada could pay a reduced interest rate if it achieves various targets related to its sustainability.

These are just a few of the options the financial sector has when it comes to funding the change for fashion.  But should the financial sector simply stop investing in fast fashion companies? And is there really a lack of finance within this $3 trillion market that accounts for 2% of global GDP?

The answers to these questions will demand urgent attention in the lead up to COP26 in Glasgow, as the fashion industry covers nearly every UN Sustainable Development Goal in some shape or form. There is no denying that the fashion industry is massive and damaging, but it also presents an opportunity for change. However, in order to make the change the fashion industry is going to need help, and the financial sector has an opportunity and responsibility to do so.

References

[1] Suraci, O. (2021) ‘The Best-Dressed Polluter - Regulation and Sustainability in the Fashion Industry’, Hastings Environmental Law Journal, 27(2), pp. 225–242. Available at: https://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=edshol&AN=edshol.hein.journals.haswnw27.21&site=eds-live

[2] Sara Greco, Barbara De Cock, Argumentative misalignments in the controversy surrounding fashion sustainability, Journal of Pragmatics, Volume 174, 2021, Pages 55-67, ISSN 0378-2166, https://doi.org/10.1016/j.pragma.2020.12.019.

[3] Financing the Transformation in the Fashion Industry (Jan, 2020) & Investing in Textile Innovation Report (Oct 2019): https://fashionforgood.com/news/resource-library/

by GEFI