Adjusting financial strategies according to ESG standards is only the first step in the right direction, say supporters of impact investment.
Environmental and sustainable development issues are on the rise in the list of priorities in the international public opinion, as also demonstrated by the recent success of initiatives to raise awareness among governments and companies about global warming and climate change.
Actually, though, sustainable initiatives in the investing industry are nothing new to the financial world. Corporate executives in the financial sector and political authorities around the world have been trying to act for a long time to reduce carbon emissions and to encourage activities with a low environmental impact.
In fact, the management of company activities according to ESG criteria is already becoming the norm for the future. And the trend is bound to accelerate in the coming years, as further regulation is underway in many countries. With a focus on “professionalising” ESG investments, the European Union is working on a legislative package for sustainable finance.
This includes a taxonomy to classify ESG investments. In addition, it covers requirements for companies to provide evidence about the claims they make regarding the performance of their financial products in terms of environmental, social, and governance issues. These measures will not only increase transparency, but also create a common approach to ESG investment.
Sustainable Finance, the Role of Switzerland and Geneva
No major institution in the financial or asset management field wants to lag behind. At the same time governments are deploying financial market policies that boost the competitiveness of their finance centres. Even China, which for a long time has not shown an exemplary attitude in terms of environmental impact, has become one of the frontrunners in this particular – and increasingly popular – domain.
Switzerland, on the other hand, has been trying to align its financial market policy with internationally recognised standards, specifically in the area of sustainable investments, for many years. According to Martin Hess, Chief Economist at the Swiss Bankers Association, “sustainable investment has enormous potential”.
We are just at the beginning of a new era in finance, it seems. However, adjusting financial strategies according to ESG standards is only the first step in the right direction, say supporters of impact investment, underlining the fact that sustainable finance alone would not be able to save the earth.
That said, it is a big step which represents a clear break with the past.
The Building Bridges Summit in Geneva
Activities and conferences to support sustainability are growing everywhere. The Building Bridges Week – a series of events taking place from the 7th to the 11th of October in Geneva is one of many examples of how sustainable finance has become a hot topic. The sustainable finance events coincide with the first General Assembly of the Sustainable Financial Centres Network (a partnership between financial centres and the United Nations Environment Programme – UNEP), which will bring together in Geneva delegations from some 30 financial centres from all over the world.
With the e, the canton wants to establish its leading position in investments that benefit the environment and society. On the 10th of October there was probably the most anticipated meeting of the whole week, the Building Bridges Summit. It is called this way because it aims at building bridges between Swiss experts from finance and the 17 Sustainable Development Goals (SDGs).
A blend of banking top executives, including Sergio Ermotti, CEO at UBS, and Patrick Odier, Senior Managing Partner at Lombard Odier Group, financial professionals, and leaders from various United Nations organizations were gathered in the Swiss city to tackle the main environmental, social and governance issues the industry is facing. According to what organizers explained during a press conference, this week’s high-level events and meetings should be a first step towards establishing Geneva as a global center of the industry.
As a matter of fact, Switzerland is well-positioned to continue clearing a path for innovative products and solutions within the Swiss financial centre, as attested by the latest brochure – titled “Switzerland for Sustainable Finance” -produced by Swiss Sustainable Finance (SSF) in a joint project with Swiss Bankers Association (SBA), Swiss Funds & Asset Management Association (SFAMA) and Swiss Insurance Association (SIA).
According to the report, the country’s leading role in private wealth management has laid the foundation for the creation of sustainable investment services both for private and institutional clients. Local research firms have been highly instrumental in crafting sophisticated offerings for both Switzerland and international markets.
Ampersand World Wants to Help Companies Achieve Sustainable Goals
“The recent dynamic market growth in sustainable assets is mainly due to the fact that insurance companies and large Swiss pension funds have recognised the advantages of adopting sustainable investment policies”, the brochure claims.
In a period of growing interest in the area of sustainability on the part of large multinationals, Geneva-based Ampersand World is doing its part by developing a new strategic plan designed to help international companies to achieve their “green” goals, while guiding talented candidates to improve their ESG skills necessary to land their dream job.
Besides establishing itself as the main bridge of reference between a candidate and an employer who wants to meet the highest ESG standards, Ampersand World is supporting concrete projects in the field of environment preservation and sustainable agriculture.
The talent hub and strategic business partner of commodity groups does that by supporting Swiss association Nordesta in its effort to fight Brazilian Amazon deforestation. The career consulting firm also helps Terre Verte to foster sustainable farming initiatives as well as safeguarding the environment in Africa.
In fact, Ampersand World supports various Swiss small foundations contributing to improve education development, all around the world. When one works with the firm, one also works with foundations it supports.