Some common remarks from most forum speakers, presentations and panels were the following: ESG Responsible Investment and sustainable finance strategies are no longer something nice to have but “must have” for Banks, Asset Managers, Investors in general especially in the light of the upcoming EU Taxonomy Regulation, as well as for corporations, especially for the listed ones. The ESG market is growing in the last years in Europe as well as globall.
There is an increasing number of PRI Signatories as well as a growing number of ESG funds and ESG relevant funds, due to higher demand by investors, especially by institutional investors. Many mainstream Asset Managers already offer ESG financial products or plan to offer ESG relevant financial products. Market studies and market practices showcase a correlation between ESG Investment Strategies with Risk Reduction as well as with better Performance, especially in the midterm and long term.
Sustainable Finance is not only about Responsible Investments but also about Responsible Banking and responsible project finance / loan policy. Therefore Banks also should have ESG integrated into their core strategy. The great support of the UNEP FI Initiative by many leading banks confirm the high interest of banks on topic too. There is a growing number of market driven ESG relevant self-regulation initiatives, beyond PRI (such as UNEP, TCFD etc.), which are in the right direction and will contribute positively in the development of an ESG culture, educating also the market.
The recognition of commonly accepted ESG Standards and Strategies is perhaps one of the largest industry challenges and this problem needs to be tackled. The EU Taxonomy contributes in that direction, but it is not enough as condition. The upcoming EU Taxonomy Regulation, which is in the right direction, will impact and change the financial and investment field and will be a step forward for a new era in sustainable finance and ESG Investing for Investors, Banks, Insurances, Financial Advisors, Rating Agencies etc.
There is an ESG Investing and Sustainable Finance Policy and Regulatory Push but that is not enough. Though the EU Taxonomy will not solve all the problems and challenges of the Sustainable Finance Industry. Europe is currently leading the way in sustainable finance. It is inevitable that the US will follow probably with a similar regulation. Except the need for common ESG Standards, a more structured and with clear rules ESG Dialogue between Investors and corporations will help too. Banks should be also able with ESG Strategies to evaluate better their investment and credit risks and opportunities.
The lack of commonly recognized ESG Investing Standards, the existing “Green Washing” trend in the financial industry by some market players, the lack of clear ESG relevant regulation globally, the lack of market education and expertise, the use of still different language between investors and corporations and the necessity for use of reliable ESG score models and ESG relevant software tools are just a few of the challenges for the financial and investment industry.
Central Banks need also to take action in a more ESG relevant direction. The policy and regulatory push is a first positive step. More steps need to be taken towards the path of commonly recognized ESG standards. The good news is, that the ESG Investments market does not look like currently a market bubble. The market trends look positive also for the coming period. It seems, we are at the beginning of a market journey, where ESG Investing will turn potentially from niche to mainstream.
Forum was supported by established brands and organisations: InvestitionsBank Berlin, Forum for Responsible Investment, RepRisk, Trillium Asset Management, WeSustain, Piraeus Bank, Allianz Agency Buesch, Bethmann Bank, SRH Berlin University of Applied Sciences, Handelsblatt (Sustainable Investments Edition), CSRWire, Absolute Research, Altii.de, GeSi, Good Events, ANT1 Group, CAPITALS Circle Group, FinTech Summit, York Finance Conference, International Bankers Forum.
Among forum speakers were senior executives from: RepRisk, Trillium Asset Management, EBRD, European Investment Fund, InvestitionsBank Berlin, FNG, Piraeus Bank, Santander, Luxemburg Stock Exchange, Oil & Gas Climate Initiative, CRIC, Social Value International, Global Sustain etc.