WWF & SSF event series to meet the academics - Is there a link between nature risks and financial risks?
Zurich , 13 December 2019
During this second breakfast of the joint event series to meet the academics, Amandine Favier (Head of Sustainable Finance, WWF Switzerland) warmly welcomed 50 professionals to openly discuss the topic of “Is there a link between nature risks and financial risks?”. Alexander Bassen and Kerstin Lopatta (Professors at the Research Group on Sustainable Finance, University of Hamburg) presented their latest findings based on an extensive literature review. They commented on evidence found linking nature risks to various elements of the financial industry including banking, stock market, real estate and insurance. Their results indicate that nature risks seem to have adverse effects on the stock market, banking and real estate, however, for the insurance sector, increasing nature risks can be linked to positive financial effects as policy holders tend to increase their coverage with increasing nature risks. Additionally, of the over 100 key topics used for the literature review on this topic, “biodiversity” linked to financial risk has yet to be covered by academics and is therefore a key area for further research.
In the following panel discussion moderated by Sabine Döbeli (CEO, SSF), Judson Berkey (Managing Director, Group head of Sustainability Regulatory Strategy, UBS) joined the panel to bring in some practical insights and opinions. The panel highlighted that currently, nature risks are often integrated into business decisions from a qualitative perspective , however, quantitative measurements are not yet well enough developed for most aspects linked to nature risks. Also a key element to solving this problematic will be improved corporate disclosures from investee companies. Of the 5 top risks in terms of likelihood listed by the WEF in 2019, the top three are linked to nature, but are not yet adequately incorporated into financial analysis nor corporate disclosures. However, risks 4 and 5 on that list (Data fraud or theft and Cyber-attacks) are already quantitatively incorporated into risk analysis by financial players. Therefore, there are reasons to stay optimistic that this will also be the case for nature risks.
On 2 December 2019, over 70 participants joined SSF in Lugano for a conference dedicated to the topic of sustainable mobility and current shifts in the automotive industry.
After a short introduction by Sabine Döbeli (CEO SSF), Fabrizio Noembrini (Director, Associazione TicinoEnergia) gave the first presentation of the evening. Starting with an overview of the current CO2 emissions levels, he showed how electrification of mobility is key to reduce emissions and ensure good quality of life in a broader sense. Going a step further, he also explained that this development will be accompanied by increasing complexity through interaction with new business models e.g. sharing services, small-grid renewable energy production or autonomous vehicles.
Next, Danilo Bertocchi (Senior Business Development, Green Motion SA) gave concrete examples of how the company Green Motion SA is developing e-mobility solutions in Switzerland. During his presentation, he set the record straight regarding many common myths on e-mobility, citing the already existing dense coverage of charging infrastructure, as well as the capabilities and easy maintenance of electric vehicles. Danilo Bertocchi’s detailed insights made it clear that e-mobility is revolutionizing the automotive sector and while this will be a disruptive shift, it is crucial for the sector to remain competitive and significantly reduce emissions.
The third speaker, Nicolas Bénéton (Senior Client Portfolio Manager, RobecoSAM) complemented the two presentations with an investor’s standpoint on the developments in sustainable mobility. For RobecoSAM’s thematic investment strategy, 3 trends drivers make e-mobility a compelling investment case; tougher emissions regulations, electric cars quickly becoming cheaper than conventional cars, and the significant reduction of CO2 emissions, which is expected to be even more important as production facilities start becoming CO2 free. Moreover, with electronics and information system at the centrepiece of modern vehicles, synergies for integrated systems within e.g. household energy production can be further harnessed. This creates favorable investment opportunities across the entire value chain for sustainable and smart mobility.
In the subsequent panel discussion, moderated by Alberto Stival (Director PR & Communication, SSF), all speakers agreed that the future of mobility is electric. In Q&A with the audience, the speakers also explained how they expect a convergence of battery technology and charging infrastructure, which will further facilitate the uptake. All of this will not come without substantial disruption in the industry and society, but it will be indispensable for investors to follow these shifts on the path to low-carbon and sustainable mobility. The discussions on this broad topic continued during the aperitivo that followed the event.
WWF & SSF event series to meet the academics - Physical and transition risks’ influence on performance of financial assets
Zurich, 20 November 2019
At this SSF member event, a mix of professionals from the financial industry and academia exchanged on the topic of Physical and transition risks’ influence on performance of financial assets. The breakfast meeting was the first of four joint WWF and SSF events on the general topic of “Linking environmental risks to financial risks”. First off, Pierre Monnin (Fellow, Council on Economic Policies), co-author of the recent paper, presented the empirical evidence supporting the observation that climate-related costs have already affected financial asset returns. He also discussed if and how financial markets are adequately pricing in these costs and provided some recommendations from the perspective of the authors.
In the panel discussion moderated by Sabine Döbeli (CEO, SSF), Norbert Rücker (Managing Director Senior Advisor, Head of Economics & Next Generation Research, Julius Baer) joined the debate bringing in practical examples from his experience, and stressed that although there are clearly visible risks, promising opportunities have also been identified. For example, financial players can more systematically assess individual sectors and identify those set to benefit from the transition (i.e. technology sector). The panel also touched on the subject of data availability in the space of climate risks and pointed out that more reliable data is needed; however, action also should be taken to make sure that this data is properly integrated in the financial industry. Finally, a key point was that a lot of focus has recently been put on assessing climate-related policy shock; however, actors need to be aware that there are multiple other factors to be considered to accurately assess financial risks, such as technology shock, demographic shifts and consumer confidence levels.
The event closed with a networking breakfast to allow practitioners and academics to further exchange on the topic.
TCFD and SDGs: Using existing global frameworks to ensure more resilient investments
Zurich/Geneva, 5&6 November 2019
During two back-to-back events, SSF together with PRI brought together over 200 professionals curious to learn about where the PRI stands with regard to their activities around TCFD and SDGs and hear from experts about the opportunities and challenges linked to these frameworks. In Zurich, Melanie Klebeck (Signatory Relationship Manager, PRI) and Sabine Döbeli (CEO, SSF) opened the event with welcoming remarks outlining some of the recent market developments. In Geneva, Marie Luchet (Director of Continental Europe, PRI) and Jean Laville (Deputy CEO, SSF) provided opening thoughts to kick-off discussions.
At both events, Edward Baker (Senior Policy Advisor – Climate and Energy Transition, PRI) outlined the four-step guide to implementing climate scenario analysis and the various free-to-use market tools currently available. He also emphasized the importance of the TCFD within the PRI reporting framework, with TCFD linked reporting set to become mandatory for PRI signatories as of January 2020. Shelagh Whitley (Director of ESG, PRI), also speaking at both events, discussed how SDG outcomes are increasingly being demanded by clients and used by investors. One major challenge regarding achieving positive SDG outcomes linked to specific SDGs is always to keep in mind the potential associated negative outcomes linked to various other SDGs. She also provided information on the SDG reporting framework the PRI is currently developing and which will be available early 2020.
Expert panels at both events gave insights into how Swiss practitioners are implementing measures to address both the SDGs and TCFD.
In Zurich, Claudia Bolli (Head of Responsible Investing, Swiss Re), René Nicolodi (Deputy Head of Asset Management, Swisscanto Invest by Zürcher Kantonalbank) and Tycho Sneyers (Managing Partner, LGT CP and PRI Board member) animated the audience with their input. The panel touched on the highly debated question of which products (i.e. private vs. public markets) can and should be labelled “impact products” and which are most effective to help achieve global goals. There was wide agreement that investors of all types need to be looking at the issue. Those mainly invested in private markets obviously have much more direct effects when it comes to achieving impact, however, the sheer amount of assets linked to public markets cannot be ignored in efforts to create a sustainable world and economy. In addition, investors need to set clear intentions when it comes to the SDGs they want to address, in order to steer their processes in the right direction.
In Geneva Vincent Kaufmann (CEO, Ethos Foundation), Sandy Wolf (Sustainability Specialist Thematic Equities, Pictet Asset Management) and Maria Teresa Zappia (CIO, BlueOrchard Finance) discussed their organisations’ individual intentions to achieve impact and the various approaches and frameworks they rely on. Pictet, for instance, uses the Planetary Boundaries Model in its research, which was developed by the Stockholm Resilience Centre. Ethos looks into different frameworks, such as TCFD and CDP, but emphasized that data is sometimes hard to obtain, especially for small and mid-cap companies. BlueOrchard stressed the importance of being able to identify both the positive and negative effects associated with investments.
Both events closed with a networking lunch allowing participants to continue discussions.
The Building Bridges Summit, organised jointly by Sustainable Finance Geneva, Swiss Sustainable Finance and the Geneva Financial Center, was a huge success bringing together around 900 delegates and having a strong media echo. Organised during the week of the annual meeting of the International Network of Financial Centers for Sustainability (FC4S) the event was able to benefit from the presence of some thirty members of the FC4S network.
With the aim to maximize our collective impact by building bridges between Swiss experts from finance and the 17 Sustainable Development Goals (SDGs), the event covered many current topics relevant for the sustainable finance industry and attracted high-level speakers, such as Ueli Maurer (President of the Swiss Confederation), Tatiana Valovaya (Director-General, UN Geneva Office) and Sergio Ermotti (CEO, UBS group). It was a perfect platform to learn, exchange and develop ideas.
The Summit also served as a platform for SSF to launch the brochure Switzerland for Sustainable Finance – Transforming finance for a better world, produced by SSF in a joint project with Swiss Bankers Association (SBA), Swiss Funds & Asset Management Association (SFAMA) and Swiss Insurance Association (SIA), which provides a comprehensive overview of Switzerland’s unique strengths in sustainable finance.
This Summit is both an incentive and a genuine call to each individual and institution: “Are you a bridge builder?”
Morning event gallery
Ticino for Finance, in collaboration with Swiss Sustainable Finance (SSF), organized a public conference on the topic of sustainable finance, welcoming around 70 participants at Villa Negroni in Vezia. Experts and SSF members Stefano Montobbio (Research Director & Global Head of Research Governance, EFG Asset Management) Vincent Kaufmann (Director, Ethos Foundation) and Alberto Stival (Director PR & Communications, SSF) not only discussed the environmental, social and governance (ESG) issues behind sustainable finance, but also highlighted the profitability and market logic behind sustainable investments as well as the findings from SSF's recent market study.
To download the presentations click on the names of the speakers:
The SSF Annual Conference 2019 (download full programme), where SSF also celebrated its 5-year anniversary, attracted a record number of 200 participants from different industries and backgrounds. The highlight of the day was the opening keynote by Ueli Maurer, President of the Swiss Confederation, who spoke about what he considers key approaches on the road to a sustainable and competitive Swiss financial sector. While it is the industry’s responsibility to develop and implement high-quality sustainable finance solutions in Switzerland, he highlighted that this requires clear definitions and supportive framework conditions, which the government can help facilitate.
Moderator Amanda Ammann then invited three start-ups to the stage. Mobility optimization by Bestmile, Yova AG’s digital sustainable investing platform, and renewable high-altitude wind energy by Skypull represent three promising innovations for a sustainable future. A panel with Kristen Dunlop (CEO EIT Climate-Kic), Annalise Eggimann( CEO Innosuisse) and Ralph Mogicato (Entrepeneur and Angel Investor, Vice President SICTIC), discussed specific barriers for start-ups when trying to establish themselves in markets and society. The panellist agreed there are still considerable misalignments today when it comes to investor expectations for the growth and exit phase of start-ups, and that certain larger systemic issues must also be addressed in order to foster an ecosystem that can generate the solutions necessary to meet sustainability goals.
After a short coffee break, the focus of the conference turned to the current regulatory developments on the EU level. Sven Gentner (Head of Asset Management Unit at the European Commission's DG FISMA) provided the most recent news from Brussels and gave detailed insights into the latest reports on three legislative measures. With this input, panellists Claudia Emele (CEO Avadis Anlagestiftung and CIO Avadis Vorsorge), Markus Fuchs (Managing Director SFAMA) and Pascal Zbinden (Co-Head SAA & Markets Swiss Re) joined Sven Gentner on stage and looked into what these fast-paced regulatory developments mean for Switzerland. The Swiss players first explained their own experiences in sustainable finance and then proceeded to discuss the implications of the different elements of EU regulation in detail. Questions stemming from moderator Sabine Döbeli as well as from an active audience addressed differences in Swiss and EU approaches and the challenges seen by the industry. In the end, it became evident that the environment for Swiss financial players is changing, but that players are working together to make sure the Swiss Financial Centre remains competitive in this changing environment.
The event was closed by illustrator Roland Siegenthaler, who creatively and whimsically summarized the event with caricature images and concise remarks (download illustrations).
Recordings of the sessions can be accessed on our YouTube channel.
On June 3 and 4, SSF presented the results of the Swiss Sustainable Investment Market Study 2019 to 200 professionals at back-to-back events in Zurich and Geneva. In Zurich, Jean-Daniel Gerber (President, SSF) opened the event with a few welcome remarks and then handed over to Sabine Döbeli (CEO, SSF), who gave a few words on the powerful images by Swiss photographers found in the study. With these images, SSF aimed to highlight the human dimension behind the pressing climate challenges and encourage better-informed investment decisions to help alleviate these challenges. In Geneva, Angela de Wolff (Vice President, SSF) and Jean Laville (Deputy CEO, SSF) provided the welcome notes.
At both events, Timo Busch, (Prof. at the University of Zurich), presented the findings of the market survey, showing not just how Swiss SI had reached CHF 716.6 billion by the end 2019 and become more widespread, but also giving insights into the different SI approaches and market perceptions. Subsequently, Kelly Hess (Director Projects, SSF) gave an overview of the regulatory developments in the past year, where a strong acceleration of various initiatives, such as EU Action Plan and Swiss parliamentary initiatives, became increasingly visible.
Each event closed with a panel of experts. In Zurich, the panel convened under the title of “Wachtstum mit Wirkung?” and consisted of Esther Peiner (Managing Director, Partners Group), Jacqueline Oh (Director, SVVK), Andreas Knörzer (Vice Chairman, Vontobel Asset Management) and Rolf Helbling (Co-Founder and Portfolio Manager, Carnot Capital). The panelists agreed that SI has now entered mainstream and considered it positive that the market is finally scaling up sustainable investing. However, even though this positions the Swiss SI industry in the right direction, the impact of the investments was discussed more critically. The speakers explained their processes and SI approaches such as ESG integration, ESG engagement or thematic funds, and debated if and how these different approaches have an impact in the real economy.
In Geneva, Jean Laville welcomed Fiona Frick (CEO, Unigestion), Emmanuelle Javoy (Head Impact Measurement, Symbiotics) and Vincent Kaufmann (CEO, Ethos Foundation) to the podium discussion. The panelist portrayed the main SI approaches of their companies, ESG integration, impact investing and ESG engagement, and gave practical examples of their companies’ products and strategies. In engaging discussions with the audience, they also debated the impact of the growth of the different SI approaches, as well as the implications of these approaches on performance.
What became apparent from both discussions was that with climate dominating the impact discussions, the financial industry needs to demonstrate not only the sustainability of their portfolio, but also how investors can actually contribute concrete solutions in response to the climate crisis.
To conclude the events, with thanks conveyed to the respondents, sponsors, SSF workgroup members and research partners of the study, discussions continued during the subsequent networking apéros.
Sustainability and technological development – two trends, one opportunity for the Zurich financial sector?
Zurich, 13 May
With its strong financial sector and Switzerland's generally high level of sustainability awareness, the Zurich economic area offers ideal prerequisites for sustainable finance. At the same time, Zurich is developing into a dynamic Fintech hub. How can sustainable finance and technology be successfully combined?
Over 150 participants joined the public event organized by the Stadtentwicklung Zürich, in cooperation with Swiss Sustainable Finance and the Zürcher Bankenverband, to discuss this question. After a welcome note by Corine Mauch, Mayor of the City of Zurich, Manuel Rybach, Global Head of Public Affairs and Policy at Credit Suisse and Tillman Lang, CEO and Co-Founder at Start-up Yova, presented real-life business cases where fintech and sustainable finance are already combined.
Subsequently, Cornelis van der Lugt, Senior Associate, BSD Consulting, presented the results of the United Nations Environment Programm study Green Digital Finance – Mapping Current Practice and Potential in Switzerland and Beyond, showing Switzerland’s strengths but also identifying a gap in the current application of digital innovations to sustainable finance.
In a podium moderated by Sabine Döbeli, CEO, SSF, four experts consequently debated the challenges and experiences they encounter when bringing technology and sustainable finance together. The different perspectives included the government’s position presented by David Gerber, Head Market Policy and Deputy Head National Coordination, State Secretariat for International Finance (SIF), and a view on the framework conditions and entrepreneurship culture in Switzerland by Andreas Iten, Co-Founder & Board Member, F10 FinTech Incubator and Accelerator. Martin Weymann, Head Sustainability, Emerging & Political Risk Management at Swiss Re and Philipp Aeby, CEO of RepRisk each gave examples of applications developed in the corporate world that already use technology, such as machine learning or satellite imagery. The participants agreed that Zurich and Switzerland in general provide fertile ground for leveraging technology into sustainable finance, but also highlighted the need to increase the interfaces between the two areas.
With a call to connect and innovate in this still nascent intersection, the panel handed the word to Anna Schindler, Director, Stadtentwicklung Zürich, who closed the event stating that the City of Zurich is looking forward to laying the groundwork for vibrant a digital sustainable finance community in Zurich. The event was rounded out by a network apéro.
At this joint CFA & SSF event in Geneva, 90 participants were present for the launch of the regional report ESG integration in Europe, the Middle East, and Africa: Markets, practices and data and in-depth discussions about how companies are defining and implementing ESG Integration approaches. Jean Laville (Deputy CEO, SSF) and Christian Dreyer (CEO, CFA Society) opened the event with welcome notes from both organisations.
Matt Orsagh (Director Capital Markets Policy, CFA Institute) followed with a presentation of the key findings of the regional study. The study, based on extensive interviews, surveys, workshops and data from the PRI reporting framework, showed regional differences in the level of understanding and implementation of ESG integration, as well as on perceived key drivers and barriers. While risk management was listed as one key driver over most regions, other drivers such as client demand, regulation and generation of alpha varied from region to region.
After this overview, a specific case study of ESG integration in Fixed income was presented by Christopher Greenwald (Head of Research Sustainable and Impact Investing, UBS). The UBS case study can be found in the CFA/PRI publication Guidance and case studies for ESG integration: equities and fixed income. In his presentation, Christopher discussed how ESG integration, originally exclusively used for equity research, is now also an important topic for fixed income investments. When showing correlations between credit ratings and ESG ratings and methods to look for opportunities to generate alpha, he explained how important it is for teams looking at traditional credit analysis to work together with dedicated ESG specialists.
To gain even more practical insights, Eric Borremans (Head of ESG, Pictet AM) and Nicolas Jamet (Senior Quantitative Analyst, RAM Active Investments) joined Christopher on a panel moderated by Kelly Hess (Senior Project Manager, SSF). The panelists emphasized the importance that a company’s ESG Integration approach should be systematic and focus on material ESG factors.
They also agreed that over the years, there has been a shift in the interactions with clients, who are becoming ever more sophisticated on the topic. In this contexts, it is particularly useful to have specific examples to share. A big challenge in the industry is the terminology within Sustainable Finance that can potentially confuse clients. With regard to data availability, there was clear consensus that although the ESG data may not yet be perfect or “investment-ready”, there is already a lot that can be done with the data. It is up to asset managers to have a solid process that identifies the relevant information.
The event ended with a networking lunch where participants continued discussions.
Together with the Natural Capital Finance Alliance (NCFA), SSF co-organised a launch event for the newly available guide “Integrating Natural Capital in Risk Assessments”, the first step-by-step guide to help financial institutions conduct a rapid natural capital risk assessment. At the fully-booked event, hosted by UBS, 80 professionals gathered to learn more about the guide and the online tool ENCORE, a project funded by SECO and MAVA Foundation. These tools enable practitioners to better understand and assess their natural capital exposures.
After opening notes from Liliana de Sà Kirchknopf (Head of Private Sector Development Division, SECO), Sabine Döbeli (CEO, SSF) and Christian Leitz (Head of Corporate Responsibility management, UBS), event chair Anders Nordheim (Programme Leader, Ecosystems and Sustainable land use, UNEP FI) kicked-off the presentations and introduced the speakers.
Katie Leach (Senior Programme Officer, UNEP World Conservation Monitoring Centre) presented an in-depth look into the ENCORE tool and the vast knowledgebase behind it. She showed how users can apply the tool to visualise economic dependencies on nature and how environmental change creates risks for businesses. The tool covers 167 economic sectors on a global scale, and helps banks better analyse, measure and report on their exposure to natural capital (i.e. water, forests and clean air) and related risks and opportunities.
To give an overview of the new guide, Jon Williams (Partner, Sustainability & Climate Change, PwC), took the floor, explaining PwC’s work with pilot banks in preparing the report. Collaborating with banks located in areas heavily affected by environmental stresses, such as South America and South Africa, was a success factor to define key elements of the report.
Following these two input presentations, in a panel moderated by Eric Usher (Head of UNEP FI), first-hand experiences and insights from practitioners were presented. Liselotte Arni (Head of Environmental and Social Risk, UBS) and Madeleine Ronquest (Head of Environmental and Social Risk, FirstRand) joined Jon Williams on the panel. Madeleine pointed out how important the topic is for their bank, as South African banks generally have substantial exposure to agriculture and mining. When lending to such industries, banks must be fully aware of the natural capital risks to avoid financial losses should clients default and return unusable land/assets to the bank. The panel also agreed that artificial intelligence and smart data collection will be key to make the process more efficient, considering that we have yet to leverage on alternative sources of data. Additionally, the panel discussed how the language used when addressing this issue must focus on strategic risks, in order to sensitise management to the fact that natural capital risks are indeed to be looked at on a corporate level and not only in niche products.
The event closed with a networking lunch, during which many participants could continue their discussions and connect with the experts and their peers.