Sustainable Finance Is Coming: How Can You Position Yourself?

Since the Fridays for Future movement began in 2018, sustainability has been on everyone’s lips. It has also grown in importance within the business world: Companies that are taking a holistic view of sustainability can reap financial rewards while also benefitting the environment and society. The following is an interview with our Managing Partner Bernd Kasemir.

Lars Meier: Dr. Bernd Kasemir, why is the topic of sustainable finance gaining so much momentum?

Bernd Kasemir: The European Commission adopted an Action Plan on Sustainable Finance in March 2018. In December 2019, Commission President Ursula von der Leyen presented the “European Green Deal,” under which the European Union aims to reduce its net emissions of greenhouse gases to zero by 2050. The Green Recovery Call to Action from the World Business Council for Sustainable Development reveals that Covid-19 has not dampened these ambitions. This initiative, which was signed by numerous leading companies, calls for a sustainable economic recovery following the Coronavirus crisis. In the same spirit, in June 2020 the Swiss Federal Council adopted a report with guidelines on sustainability in the financial sector that aims to make Switzerland a leading location for sustainable financial services.

What importance do you attach to sustainability?

Sustainability—or Environmental, Social & Governance (ESG) in the world of financial services—will continue to grow in importance in the coming years. We recommend that investors, financial service providers, and companies in all sectors position themselves well for this.

What can investors who want to invest sustainably do?

They can “vote with their wallet,” putting their money to work where it brings not only economic but also ecological and social benefits. To do this, however, the investment community must demand more information and better selection from the financial and real economy. They must ask: How sustainable are the companies I invest in? What options do my financial service providers give me to weight my portfolio positions sustainably? Taking sustainability or ESG into account helps identify future risks early and highlight sustainable winners in the market.

This seems promising, but also complex. Is it becoming increasingly difficult to make informed decisions?

Investors have a new field of risks and opportunities that they need to understand and manage. The good thing is that they are not left alone with this. In the EU, the classification of sustainable economic activities, the so-called taxonomy, will help investors make a clear judgement on whether an investment is really environmentally friendly. In Switzerland, according to the Federal Council’s report, requirements for banks, insurance companies, pension funds, and asset managers to account for all significant risks will be adapted to explicitly include financial consequences of climate risks. This will give investors a more robust basis for making sustainable decisions.

Sustainserv advises financial market participants and companies in all sectors on sustainability. What advice do you offer your clients?

Investors such as family offices or pension funds should carefully consider how ESG fits into their strategy and pay close attention to the ESG expertise of the financial market partners they select. For financial service providers, offering transparent and attractive customer services and further developing their competencies and structures regarding ESG will be essential to position themselves in the market. To support these goals, they can also use artificial intelligence tools to analyze and understand large and complex databases on sustainability in the real economy.

What is needed for successful cooperation between all players in the financial market?

Companies in all sectors should better inform the capital market about sustainability, which is currently still an area of differentiation. In the future, however, this will be a business imperative for all businesses. Consistent information between investors, financial service providers, and companies can only work if everyone knows and observes the relevant standards and best practice. With almost two decades of experience, Sustainserv can offer valuable support in this respect.

The original interview entitled «Sustainable Finance Is Coming: How Can You Position Yourself?” by Lars Meier was published in Focus on Finance & Investment, a publication of Smart Media, as a supplement to the “Tages-Anzeiger” newspaper of July 11, 2020.


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