Ethical Finance 2021 | Day 3 | Beyond Climate | Round-Up

We hope you were able to join us for the final day of Ethical Finance as planned. We brought this year’s summit to a close with a truly incredible range of speakers and panels, who allowed us to successfully move ‘Beyond Climate’ to the leadership challenges and the ‘S’ in ESGs. The need to implement purpose-lead business models and to apply a macro-economic approach to questions of the fight against climate change came to the forefront of discussions across our illustrious range of speakers and varied panel sessions. With social inequalities thrown into stark relief by the ongoing effects of the coronavirus pandemic, aligning profit with societal and global purpose shone through as a key imperative facing the finance sector as the eyes of the world  turn towards COP26.

The day began with a welcome from Scotland’s First Minister, Nicola Sturgeon, before an interview with UNDP Administrator Achim Steiner by the Scottish Government’s Kat Feldinger. Dora Benedeck and Alexander Ferendec Tieman from International Monetary Fund gave a post-pandemic assessment of the SDGs, assessing how developing countries can finance the SDGs in the wake of COVID-19. A panel session followed with George LittleJohn in conversation with Arshad Mohammed Ismail, Bank Pembangunan, Sarah Norris, Aberdeen Standard Investments, Dr. Hayat Sindi, Islamic Development Bank and Abubaker Suleiman, Sterling Finance discuss financing of the SDGs from a range of perspectives around the world. A session on The UKIFC Global Islamic Finance & the SDGs Taskforce brought together John Glen, Sultan Choudary UKIFC, Stella Cox CBE to launch the UKIFC's new PRB report, setting a case for the role faith finance can play in delivering ESG goals. Read more here.

The next session covered social issues - the S in ESG - and began with a keynote from HE Dr Reza Baqir, governor of the State Bank of Pakistan, who described how the role of central banks has shifted through the Global Financial Crises to the pandemic. Next, a panel saw Thom Kenrick of NatWest in conversation with Andrew Cave of Bailliee Gifford, Elena Espinoza of the PRI, Leslie Swynghedauw of MSCI and Lesley-Ann Vaughan of Mojaloop Foundation. The panel discussion some of the challenges around social finance, with insights including how MSCI use nutritional data to better understand food companies' health impacts. The session concluded with a spotlight on Tobacco Free Portfolios with GEFI’s own Gail Hurley, Dr. Bronwyn King, CEO of Tobacco Free Portfolios and Ruben Zandvliet from ABN AMRO.

The final session of the day, and of Ethical Finance 2021 saw a series of keynotes around leadership. In one of the most unique presentations we have ever had at our Ethical Finance Summit, Louai Al Roumani taught us the lessons he learned from leading BANQUE BEMO SAUDI FRANSI through the Syrian Civil War. You can find his book, Lessons from a Warzone, here. We shifted our focus to a different type of purpose-led leadership which saw Farmida Bi interviewing Sir Howard Davies, Chair of NatWest Group about the development and implementation of the bank's purpose-led strategy. Our Fireside Chat: Steering a path to Net Zero was moderated by GEFI’s own Allan Watt, and drew on the extensive expertise of Keith Anderson from Scottish Power and Vivenne Yeda Apopo from the East African Development Bank and Kenya Power. Dr. Rhian Mari Thomas OBE lead our penultimate session, a conversation with Lord Mayor of London, William Russel, before George Hay of Reuters Breakingviews interviewed UN Special Envoy on Sustainable Investment and Innovative Finance Hiro Mizuno. Click here to watch the session, which covers the GPIF sustainable finance journey, the importance of governance and whether short-selling can ever be ethical.

With the Summit done for this year, our commitment to financing a sustainable future sees us turn our attention now to COP26 in Glasgow, which is just months away. We are committed to continuing the valuable conversations from Ethical Finance 2021, and encourage you to be part of this conversation at Path to Cop, to follow us @Finance4Change on Twitter and at on Linkedln to be part of this exciting next stage of the journey.


Ethical Finance 2021 | Day 2 | Sustainability | Round-Up

Day 2 of Ethical Finance 2021 was a jam-packed day of fascinating exchanges, unpicking the complex challenges of delivering Net Zero and the macro-economic factors underpinning them. Our sessions and speakers all pointed towards the need to shift global focus to issues of sustainability, prevent further nature loss and make a business case of biodiversity preservation. Together, they have layed the ground for our focus on Day 3 of our Ethical Finance Summit: How to move beyond climate to achieve long-term, sustainable solutions in finance and beyond ahead of COP26.

We started off with Kirsty Britz Director of Sustainable Banking at NatWest Group, highlighting how the #EthicalFinance2021 is an opportunity for NatWest Group and others to learn collaboratively. Next, Inger Andersen, Executive Director at United Nations Environment Programme Finance Initiative (UNEP FI), outlined her four-step action plans for financiers (watch now). Dr Werner Hoyer, President of European Investment Bank (EIB), then outlined the daunting set of challenges we face globally from the COVID-19 pandemic to the climate crisis, emphasising that this is our last chance to make real change. Bill Winters, CEO of Standard Chartered Bank launched a new Carbon Dated report looking at the impact of MNCs’ #netzero intentions on suppliers in Asia, Africa and Middle East - read it now at sc.com/carbon-dated.

We then moved on to our 'Global Trends in Sustainability' Panel with Dame Susan Rice from FSCB, Tan Sri Dato’Zeti Aziz, former Governor of Bank Negara Malaysia and Katie Murray, Group Chief Financial Officer at NatWest Group, who unpicked some of the challenges around sustainability finance globally. Our last session of the morning saw Dr. Sarah Ivory from University of Edinburgh Business School in conversation with Steve Waygood, Chief Responsible Investment Officer at Aviva Investors, spotlight the International Platform for Climate Finance (IPCF), and its work building consensus ahead of COP26.

To kick off our Net Zero session, Kaisie Rayner FRSA Rayner, Climate Change Lead at Royal London interviewed Manuel Pulgar-Vidal Global Energy and Climate Practice Lead at WWF and former COP President, who advised Alok Sharma to "be the DJ", mixing all the avenues for climate action together to create the right sound! Our approaches to 'Delivering Net Zero in Banking and Investment' Panel discussion was lead by David Pitt-Watson, Visiting Fellow at Cambridge Judge Business School. He challenged Deirdre Michie OBE, CEO at OGUK, Masja Zandbergen-Albers , Head of Sustainability Integration at Robeco, Kaitlin Crouch-Hess, Sustainability Manager at ING and Joanne Manda, Regional Advisor, Climate Change and Innovative Finance at UNDP Indonesia on greenwashing, practical tools for Net Zero, the role of the fossil fuel sector, transparency, and the responsibilities of the financial sector. Our Initiative Spotlight profiled the Institutional Investors Group on Climate Change (IIGCC). Clare Foster, Head of Clean Energy and Green Recovery Lead at Shepherd and Wedderburn was joined by Daisy Streatfeild, Investor Practices Programme Director at the Institutional Investors Group on Climate Change (IIGCC) and Dewi Dylander, Deputy Executive Director at PKA, who outlined how the framework grew from a small group of investors interested in the Paris Agreement, to a vital tool in assessing investment portfolio alignment to science-based targets.

Our Nature session opened with Greg Ritchie in conversation with Prof. Partha Dasgupta, author of the review into the Economics of Biodiversity, who called for a 'World Bank for Biodiversity' (read more in Bloomberg or watch now). Our last session panel saw Andrew Mitchell from Global Canopy bring together Antoine Sire from BNP Paribas,  Charlotte Kaiser from NatureVest, Madeleine Ronquest from First Rand and Reza Marvasti from ISS ESG, for a lively panel exploring the routes to practical action on biodiversity from a range of viewpoints. The day closed with and initiative spotlight lead by Natalie Jackson, which highlighted the work of TFND, which launches tomorrow, drawing on the expertise of Elizabeth Mrema from UN Biodiversity and Mikkel Larsen from DBS Bank.

Tomorrow, we will be looking ‘Beyond Climate’ which will be opened by The Scottish Government First Minister herself Nicola Sturgeon at 09.20 BST.

Remember to sign in using our EfX Global login: https://www.efx.global/ethical-finance-2021-sign-in/

You can find more ore information about all of sessions and speakers at ethicalfinancesummit.com


Virtual Ethical Finance Round Table: the Role of Ethical Finance in Rebuilding the Economy after Covid-19

In response to the coronavirus pandemic, on 21st May 2020 the GEFI team hosted its first virtual Ethical Finance Round Table to explore the potential role of ethical finance in rebuilding the economy post Covid-19.

The coronavirus pandemic has impacted financial markets with unprecedented speed and ferocity. It has led to a re-evaluation of many assumptions about the global economy, with health security now joining the climate emergency as the most pressing challenges of our generation. This session provided an opportunity to hear from leading global experts on how the macro-economic impact of Covid-19 might catalyse financial institutions and economic systems to better serve people and the planet.

The session opened with an update from Rupert Watson, Head of Asset Allocation at Mercer. With their AUM totalling $304.5 billion and advising on a further $15 trillion in assets Rupert was able to provide a unique insight into Mercer’s economic and market outlook. Mercer has identified three interdependent high level economic impacts of the coronavirus crisis:

  1. Direct impact – what we see with our own eyes resulting from the enforced temporary shut down of the economy
  2. Indirect impact – businesses in a vulnerable financial position are placed under additional stress, often requiring increased borrowing as consumers become more cautious due to the economic shock and threat of job losses
  3. Policy impact – unprecedented financial support from Government and central banks has attempted to freeze the economic picture and restart it three (or more) months later.

Despite the high levels of discretionary fiscal easing, unemployment in the US will jump to its highest level since the depression. Although global GDP and corporate profits will undoubtedly plunge in Q2 Rupert nevertheless expects the recovery to begin in Q3 as activities start returning to normal. The US is likely to experience a slower recovery than the UK due in part to the job retention scheme helping to sustain UK employment and consumer spending power.

In terms of the recovery, Rupert suggested that not only what consumers are allowed to do as the lockdown eases but what they are willing to do would be of significance. The speed of the rebound will therefore depend on reaching the point where the population’s fear of Covid-19 infection is substantially diminished. A critical success factor is the availability of an effective vaccine and this is not something Rupert expects this calendar year.

Michael Moe, CEO of Silicon Valley-based GSV Asset Management and one of the world's pre-eminent authorities on growth investing, followed Rupert with his views on the response from asset managers. Adam Smith’s "The Wealth of Nations" marked the birth of modern free market capitalism which, according to Michael, has created unprecedented prosperity and inequality.

Although as many people will have died over the period of the lockdown through lack of access to clean water as have died from Covid-19, the fact that virtually the entire planet been impacted by the pandemic has led to an almost immediate global response. Covid-19 is a ‘game changer’, a mind-altering event similar to Hiroshima and 9/11 that will result in permanent global change. Michael distinguishes this paradigm change as BC (Before Coronavirus) and AD (After the Disease).

Michael highlighted that BC the venture capitalist mindset of optimising shareholder value was already under attack and in his view as we enter AD there will be a surge in recognition that the best businesses will generate a profit (as required by shareholders and for sustainability) with purpose (serving the needs of employees, communities, customers and the environment). This is not a purely philosophical idea: it is here and now. The best companies will combine the drive of for profit with the heart of a not-for-profit.

For Michael, expediting and accelerating important trends (such as the overnight shift from physical to digital and to profit with purpose) is an exciting outcome of the coronavirus pandemic.

The final speaker was Liz Grant, Professor of Global Health and Development at the University of Edinburgh who presented on the role of well-being and compassion in the new economic paradigm. Messages around compassion and well-being have gained prominence during the coronavirus pandemic.

According to Professor Grant the concept of compassion is best articulated by a quote from CS Lewis’ commemorative stone in Westminster Abbey: I believe in Christianity as I believe that the sun has risen, not only because I see it but because by it I see everything else.”

The coronavirus pandemic has turned humanity upside down, shining a light on an economic system that increases rather than reduces inequality. Although mortality rates for malnutrition, malaria and HIV are far higher, due to its global proliferation, the response to Covid-19 has been unprecedented in terms of the speed and range of health, social and economic measures taken.

As we look to the future the SDGs provide a blueprint and ‘meta-narrative’ for a new and better society. The Global Goals are underpinned by planetary health through a recognition that the health of humans is interconnected with the health of the environment. Professor Grant offered a sobering reflection by challenging the notion that we have mortgaged the health of future generations for economic gains in the present by suggesting that we have in fact now entered the territory where we are suffering today.

Compassion is not merely about acts of kindness or goodness; it is about seeing the world through someone else’s viewpoint. Professor Grant suggested a 4 step process for demonstrating compassion:

  1. Notice
  2. Interpret
  3. Empathise
  4. Alleviate

Professor Grant then pointed to the legacy of Francis Hutcheson, a major exponent of the theory of the existence of a moral sense through which man can achieve right action.

As we look beyond the pandemic Professor Grant argued that, as a global family, we must both care for ourselves and use compassion to awaken and drive action to reduce the suffering of others. Although the SDGs set out the end game they do not define our individual and collective roles. Embracing compassion can therefore be a transformative strategy and a mechanism to shape the way we see the world and provide motivation to do things differently.

The session concluded with an engaging question and answer session of which these were some of the key points emerging:

  • Timescale for economic recovery (Rupert)
    • Near term – watch the speed of the lockdown unwinding
    • Income maintenance – Governments making up shortfall so preserving capacity for people to spend when lockdown eases
    • Little desire for immediate period of austerity
    • Policy approach is to grow out of crisis (higher inflation) and reduce the level of Government debt (cf. post WW2)
    • Some possibility of severe austerity of up to 10 -15 years but reasonably confident that economy will come back quickly
  • Resilience of asset managers (Rupert)
    • Trying to avoid moving client and investor money too frequently
    • Positioning clients so they are reasonably protected across all eventualities
    • Stress test – imagine what might go wrong, test and do not panic!
  • Resilience of asset managers (Michael)
    • Difficult to know what will happen in the market so focus on fundamentals of business
    • Level of fear has created opportunities for those who can take a long term perspective
    • Challenging and exciting times for growth investors as ‘future accelerated to the present’
  • Shifting towards action in the finance sector (Professor Grant)
    • Individuals
      • Define their inward motivation (what is it that each of us find meaning in life / why are we doing what we are doing?)
      • Identify their inner journey (does it matter that there is inequality, injustice etc and do I see my connection to that?)
    • Institutions and organisations
      • Recognition that there has to be a different way of being
      • Model of compassion - not just about employees but about the practice of work
      • How important is profit and should it be at the expense of someone else / is it destructive?
      • Proactively embed a culture of compassion as compassion fundamental to sustainability
  • Shifting towards action in the finance sector (Michael)
    • Introduction of B-Corp is well-intended but does not go far enough
    • Need to incorporate approaches that can be embedded into how businesses operate
  • Impact on Europe (Rupert)
    • Lingering worry that EU may be pulling apart but Italy withdrawing would be devastating for the country and the EU
    • Publication of joint statement by France and Germany on supporting the broader region (health strategy, recovery fund, green / digital transitions and single market resilience) is a positive development and critical for Italy to achieve economic growth for living standards, employment, welfare.
  • Human (Professor Grant)
    • Consider unintended consequences of intended good action – think collectively and ethically through a lens of compassion
  • One thing to lose post-coronavirus (All)
    • Business travel (Rupert)
    • Quarterly earnings reporting (Michael)
    • Replacing thinking about what we want and need with what others want and need (Professor Grant)