There is no better way to spend a Monday night than joining one of B-Hive’s famous FIN AND TONICs in New York City! We had the pleasure of gathering at Flanders Investment & Trade’s beautiful space as our experts discussed the future of Sustainable Finance.
The evening started with an introduction of our guest of honor, the Belgian Minister of Finance, Johan Van Overtveldt. The introduction was done by Cathy Buggenhout, the Consul General of the Consulate General of Belgium. He was welcomed with a round of applause as he briefly discussed the steps that Belgium has taken towards a more sustainable society. The Minister of Finance emphasized the importance of finding a clear definition of what sustainable finance truly means and how more transparency between institutions, practices and different stakeholders will create more efficient markets and help keep track of their performance. In Belgium, they have been taking big steps forward as Johan Van Overtveldt himself has been pushing for the establishment of green bonds. Hence, Brussels is currently ranked third for the quality of its green finance behind London and Amsterdam.
Minister Van Overtveldt was followed by our co-host of the evening, Arnaud Brohe - the CEO of CO2Logic Inc. Brohe gave the attendees an overview of the great work that CO2Logic does to calculate, reduce and offset people’s CO2. “Since 1992, humans emitted the same amount of carbon dioxide that what we emitted before 1992.” According to Brohe, by putting a higher price on carbon, setting guidelines to define what “sustainability” and “green” truly means in the financial world and stopping wasting money on trying to save stranded assets and neglecting demand side policies and measures, our policy makers can make a big difference in creating a more sustainable world and lower the CO2 level.
We had the pleasure to welcome five experts who have taken a number of initiatives to support sustainable actions in the financial industry and continue creating new ways to help their clients invest in better and more sustainable solutions. The panel discussion was moderated by Satyajit Bose, Associate Director of Sustainability of Columbia University and the panel consisted of:
- Hui Wen Chan - Vice President Corporate Sustainability at Citi
- Stephen Freedman - Head of Sustainable Investing Solutions at UBS
- James Martin - Executive Director at Morgan Stanley’s Global Sustainable Finance Group
- Amisha Parekh - Senior Product Strategist, Sustainable Finance at Bloomberg LP
The panelists started by defining the meaning of sustainability and finance which turned out to be a little more complex than expected. Corporations are not only challenged by the variety of different definitions, but also to help their clients to understand what these sustainability problems are doing and how we can prevent them from happening in the financial scene through banking and investing. Chan pointed out that Citi is making efforts to ensure that our planet will be liveable for future generations by providing a range of sustainable finance solutions to their clients and operating in a responsible way. This can be challenging due to differences in the time horizon for climate change impacts relative to the loans that Citi is providing. “To address climate change, we need to make sure we keep looking ahead. Our loans may be shorter term but our client relationships are long term, and that is what we need to focus on.” Martin agreed that investors need to have a more long-term oriented focus. He believes that investors have shown a change in focusing on their climate footprints and sustainability efforts. “We want to find out how investment decisions can be a part of being the solution and not the problem. Understanding your climate footprint is crucial and will be a key player in the future.”
One of the focuses of the night turned out to be the access to consistent data. It has become difficult to identify reliable information that is not always available for everyone. This raises a lot of questions - How to find consistent data? Where to find interesting data sources that is not always public? What are the opportunities? What are the risks? According to Parekh, this is where a lot of the issues lie. “It is crucial to find unique ways to gather data to gain new perspectives. Finding new ways to understand what sustainability truly means will help us provide tools that investors can implement to their work in a sustainable way.” Currently, the issue is on the meaningfulness of the data available. By investing in research development, the impact can be significant. Freedman pointed out that this is the beginning of a new trend and we are starting to see a shift in where the focus will eventually be. “So far, the expansion of sustainable finance has largely been a reaction to a growing investor demand. In the future, it will be a key differentiator and success driver for Wealth and Asset Managers,” Freedman believes.
To conclude the discussion, our panelists talked about what the future of sustainable finance will look like. A lot of questions were raised about the lack of measurable data. It is not easy to measure the direct connection between ESG and performance which makes it difficult to find short-term fixes. In the hopes of finding more sustainable solutions, more reliable data needs to be found. Luckily, there has been a movement towards finding more quantitative measures although the environmental and social impacts are still hard to identify. In addition, even though a lot of companies are required to report their current data, they are hesitant to do so due to their poor results. Since the reporting has been lacking, it is harder to articulate the future needs.
The panelists also wish that more dedicated funds will be put towards sustainability efforts to allow more investors to get into the green bond business. At the moment, the markets are simply too small. Although, green bonds are not the end-all solution, it will be a good first step. Lastly, the panelists hope that more investors and stakeholders will begin to set sustainability goals. By following their climate footprint and focusing on reaching their newly found goals, the future of sustainable future will look a lot brighter.
Our very own CEO, Wim De Waele, closed the evening with some important remarks of what B-Hive has been up to lately. He admitted, that sustainability is an intriguing topic for a technological platform like B-Hive, but we are hoping to bring these two worlds together. One of B-Hive’s main missions is to find different ways to improve the world without hurting the planet in any way. “Even though we need to cross barriers it can be done by bringing people together and finding sustainable solutions,” De Waele added. B-Hive is always looking to capture opportunities but it is crucial to be smart in the way we measure everything. In the end, we need to understand what is green and what is sustainable in order to find effective solutions. Lastly, De Waele touched on the impact of entrepreneurs and globalization on changing today’s world in a positive way. “Globalization is here to stay and that is why B-Hive is here.”
That brought our monthly FIN AND TONIC to a close. We were delighted to see such an inspiring panel discussion followed by a great hour of networking. We are hosting our next FIN AND TONIC on July 5th on International Payments.
By: Lotta Nevalainen, B-Hive US