Triodos chair

¿Se puede invertir en finanzas sostenibles sin renunciar al rendimiento financiero?

Anonymous — Thu, 02 Mar 2023 15:36:00 +0000

Can you invest in sustainable finance without giving up on financial performance? Anonymous (not verified) Thu, 03/02/2023 - 17:45

Summary

The study demonstrates that sustainable investment is an unstoppable trend in asset management, and that investment fund managers are immersed in the adaptation of their product offerings to the transparency regulation.

Tags

Triodos chair

Date

Thu, 03/02/2023 - 12:00

Lego Actualitat

Imatge

Text Actualitat

Although it is true that phenomena such as responsible investment have a long history, in the last two decades it's development has accelerated. The current great emergence of sustainable finance is probably explained by a worsening of the deep imbalances in the global economic model. In fact, in recent years there has been growing concern about climate change, environmental pollution, greenhouse gas emissions, the increase in temperatures on the planet, the loss of biodiversity, corporate social responsibility, the increase in inequalities, the polarization of society and good governance in companies. An expression that groups all these new concepts would be Environmental, Social and Governance criteria or ESG criteria.

Now, how do these ESG criteria affect investment? Is there a consensus on whether taking them into account decreases financial performance or, on the contrary, has the capacity to increase it? At first viewed with distrust, as they were considered to have little impact on economic performance and were seen rather as a factor that increased costs, in recent years there has been a change in this tendency, and a large increase in awareness about sustainable investment.

The crux of the matter is that, in the face of this boom in sustainable finance, there is also an increase in so-called greenwashing. For participants in financial market this requires making an effort to discern those investments that are really sustainable from those that only constitute an image wash towards a sustainable positioning. In this regard, investment fund managers, private and institutional investors and regulators are concerned with verifying whether investing in “sustainable” investment funds (that is, investing in assets that follow ESG criteria) is – or is not – more profitable.

To better understand this greater consideration of ESG issues in the financial sector, at least in the case of Europe, we need to look at the regulatory context in which the continent finds itself: in fact, by approving new regulatory developments, regulators promote an orientation of the financial system towards sustainability. An example of this is the recent analysis that shows a paradigm shift in the use of sustainable investment strategy in Europe, where historically most assets were managed with exclusive and selective strategies based on rules; however, currently the most commonly used strategies are more sophisticated, integrating other aspects such as ESG criteria. This is happening due to the requirements incorporated in the recent European Union Regulation on disclosure of information relative to sustainable finance and the incorporation of sustainability risks in investments (GSIA, 2020).

All this shows that sustainable investment is a topic of growing interest today, and that it will probably also have enormous significance in the future, in the short and long term.

The study ¿Invertir con criterios ESG afecta a la rentabilidad empresarial? [Does investing with ESG criteria affect business profitability?] by Beatriz Cabello and Óscar Elvira, demonstrates that sustainable investment is an unstoppable trend in asset management, and that investment fund managers are immersed in the adaptation of their product offerings to the transparency regulation (SFDR), which came into force in March 2021, and which requires managers to specify whether or not they take sustainability into account when managing their assets. In short, it seeks to prove the commitment to respect for the environment, society and good corporate governance (ESG) of companies in which investments are made.

However, there is no clear and evident conclusion on a positive relationship between investment in ESG and profitability. It is true that more than half of the studies reflect an improvement in profitability in companies that invest in ESG, because they reduce the risk in investments and generate additional investment value, since a well-managed and responsible company that cares about its employees, its customers and the environment has a better chance of outperforming its competitors.

However, other studies claim that there is a negative relationship, and still others conclude that there is no relationship between ESG investment and profitability. Specifically, of the literature review carried out on 42 studies that have analysed whether sustainability has any effect on profitability, the majority, 59%, say that the effect is positive, but 27% indicate that sustainability has no effect on profitability, and 14% consider that the effect is negative.

In relation to the time horizon, all the studies analysed conclude that sustainable finance is more profitable in the long term and has a lower capital cost, due to the positive reaction of the markets to commitments, CSR policies and long-term strategies.

Finally, the study looks at the behaviour of “green assets”, whether stocks or bonds, in critical scenarios, such as the 2008–2009 financial crisis or the recent crisis triggered by COVID-19, and shows that companies with high ESG ratings exhibit better behaviour in the stock markets. The studies show a certain positive correlation between ESG investment and low volatility, so that at those times when the markets fall these stocks do not suffer so much, and at times of market growth, the companies with the best ESG rating show more contained rises.

In summary, everything seems to indicate that investments with ESG criteria are generally profitable (specifically, 59% of the studies analysed affirm that the effect is positive), but it also must not be forgotten that for 27% sustainability does not have an effect on profitability, and 14% consider the effect to be negative. So while sustainable investing seems to be an unstoppable trend, there is still a long way to go.

Download the full report here

Imatge

Highlighted

Off

Entitats financeres i objectius de desenvolupament sostenible

Anonymous — Mon, 06 Feb 2023 12:05:20 +0000

Financial institutions and sustainable development goals Anonymous (not verified) Wed, 02/08/2023 - 15:54

Summary

We attended the presentation of the conclusions of the 2022 Financial System Benchmark, which analyses the 400 most important global financial institutions in the world to assess how prepared they are to face the transformation towards a model of sustainability.

Tags

Date

Mon, 02/06/2023 - 12:00

Lego Actualitat

Imatge

Text Actualitat

Marcos Eguiguren Huerta
Associate Provost for Strategic Projects
Director of the International Chair in Sustainable Finance UPF-BSM & Triodos
__

The COP27 meeting, held in November last year in Egypt, passed almost unnoticed, with little substantial progress in the much-needed global coordination of the fight against one of the most serious challenges ever faced by humanity, climate change and its effects on life on our planet.

Despite this, with so many days of meetings, conventions, parallel meetings, etc., there are always interesting points that come up. As an example, in the shadow of COP 27, we attended the presentation of the conclusions of the 2022 Financial System Benchmark, which analyses the 400 most important global financial institutions in the world to assess how prepared they are to face the transformation towards a model of sustainability and to ensure that they are carrying out an asset distribution policy that better represents the risks and opportunities linked to the limits of the planet and to social conventions.

The 2022 Financial System Benchmark analyses the 400 most important global financial institutions in the world to assess how prepared they are to face the transformation towards a model of sustainability.

We will not go into detail about the methodology used, as this would greatly exceed the scope of this brief review, but we will point out that the rating given to each institution is based 40% on indicators of inclusiveness and impact policies in the field of governance and strategy, 30% on indicators of how the entity respects the limits of the planet, both in the field of climate change and in that of respect for nature and biodiversity, and the remaining 30% on indicators of how the entity adheres to the main social conventions in areas such as respect for human rights, ethical action and corporate policies, and the ability to provide decent work.

It seems that this is a fairly sensible benchmark that can reflect reasonably well the reality of how financial institutions are effectively trying to contribute to the achievement of the Sustainable Development Goals (SDGs). The main conclusions of the study, however, could not be more disheartening.

There is a long way to go: little recognition, a lack of commitment and impact analysis, useless processes

Firstly, most institutions do not recognize the impact of their investments on the environment or on society. Only one-fifth recognize these impacts and give some information about them.

Secondly, commitment to a strategy for reducing emissions to net zero remains low; only 37% of entities have published some type of strategy or long-term objective in this regard. Unfortunately, only 2% of institutions have published intermediate objectives to help track progress.

Thirdly, impact analysis of the risk related to non-compliance with key human rights is practically non-existent. Only 7% of entities publish it regarding their own operations and 3% with regard to the activities they finance. With this data it is impossible to verify whether the entities are fulfilling their theoretical role of encouraging those businesses that operate in a more ethical way, at least at a basic level.

Fourthly, funding for low-income countries, small and medium-sized enterprises, and groups at risk of exclusion is extremely low or unreported.

Finally, most financial institutions, less than 5% of those analysed, do not have processes for identifying the impact of their financing activities on nature and biodiversity.

Of the 400 entities analysed, only three pass the benchmark, and then only just. The highest rated entity, a Canadian bank, scores 52.5 out of 100

There is a lot that can be improved, without a doubt, among the large global financial institutions. Of the 400 entities analysed, only three pass the benchmark, and then only just. The highest rated entity, a Canadian bank, scores 52.5 out of 100.

If we look at the situation of the Spanish financial institutions subjected to analysis, on the one hand, we have the good news that all of them are above the average of the 400 institutions analysed, the result of a clear effort to improve, but on the negative side it should be noted that their scores range between 16.1 and 37.1 out of a maximum of 100, far from passing and with a huge amount of room for improvement.

There is no time for complacency. In this and any other rating that measures the finance world's commitment to the SDGs, the only thing we expect to see is a rapid improvement in the role finance is playing in transforming the economy. We will be keeping an eye out for upcoming benchmarks and new publications of comparative studies.

The time for greenwashing is behind us.

Highlighted

Off

Barreres al finançament d'empreses socials

Anonymous — Thu, 12 Jan 2023 14:43:11 +0000

Barriers to financing social enterprising Anonymous (not verified) Fri, 01/13/2023 - 15:37

Summary

Social enterprises have to overcome up to three different types of barriers in order to secure funding: at the individual, organizational and industry levels. Ramon Bastida, Vice Dean for Knowledge Transfer and researcher at International Chair in Sustainable Finance, explains it.

Tags

Date

Mon, 01/16/2023 - 12:00

Lego Actualitat

Imatge

Text Actualitat

Social enterprises have to overcome up to three different types of barriers in order to secure funding: at the individual, organizational and industry levels

Ramon Bastida Vialcanet
Vice Dean for Knowledge Transfer
Researcher at International Chair in Sustainable Finances
__

Speaking about social enterprises implies speaking about financing problems. Historically, there has been a significant disconnect between the supply and demand of finance for this type of enterprise and, in recent years, this phenomenon has increased due to the growth in the number of social enterprises and their financing needs.

In periods of economic difficulties or major social challenges (climate change, inequalities, ageing of population, etc.), it is common for an increasing number of people to create companies whose main mission is to generate a positive impact on society and the environment by carrying out sustainable economic activity. The idea that this type of activity is reserved exclusively for foundations and NGOs that receive public subsidies or philanthropic donation is a thing of the past.

How to finance social enterprises

Although in recent years there has been a significant increase in the supply of financing products and services aimed at this type of company, a study carried out by the Seira Foundation shows that most of them continue to finance themselves through traditional banks, instead of using the specific financing tools for their needs that are offered by ethical banking or banking with values, or impact investors, among others. This decoupling of supply and demand for finance leads to an underutilization of resources in the field of social finance.

The study Unmasking the Barriers to Financing Social Enterprises, which we prepared together with Nina Magomedova and published in the scientific journal VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, analyzes the behaviour of managers of social enterprises and financial institutions, to explain the reasons for the decoupling between supply and demand. The study identifies three types of barriers that may be the cause of this phenomenon:

Individual barriers: These focus on the mutual distrust between business managers and social finance institutions. Business managers consider that professionals from financial institutions do not have sufficient knowledge of the business model of social enterprises. And managers of social finance institutions point to a lack of professionalism in business managers as the main impediment to understanding each other.
Organizational barriers: These types of barriers arise due to practical or operational inconsistencies between the functioning of the enterprises and the contractual obligations of social finance institutions and investors. These inconsistencies are frequently due to the size of the projects presented by social enterprises, often smaller than required by the financing party. They are also due to the pressure to obtain positive results in order to repay the funding, which, according to the managers of social enterprises, can jeopardize the social mission of their enterprises.
Sectoral barriers: In this case, the most relevant factor is the lack of maturity of the social business and finance sector. Managers of social enterprises and financial institutions both agree on the lack of metrics to measure and monitor the social impact generated by enterprises. This type of information is key for social finance institutions and investors to be able to report on the social value generated by their investments. Another aspect highlighted by the study is the need to create platforms to put business managers and social finance institutions in contact with each other.

Break down barriers

It seems logical that social enterprises should be able to meet their growing financing needs through the resources available in the social finance sector. To make this possible, alignment between business managers and lenders and investors needs to improve. Some measures that could contribute to this are:

Training of managers to improve their knowledge and management skills, and of business models with social impact
Increasing the size of projects with social impact through collaboration between companies and selection of scalable projects
The development of social impact metrics to measure and monitor the creation of social value by companies

Highlighted

Off

Programes relacionats

1565

1535

1537

1539

1567

1570

OG image

La Cátedra de Finanzas Sostenibles convoca el premio al mejor Trabajo Final de Máster sobre finanzas sostenibles

Anonymous — Wed, 23 Mar 2022 08:10:40 +0000

The Chair in Sustainable Finance announces the award for the best Final Master's Project on sustainable finance Anonymous (not verified) Wed, 03/23/2022 - 09:58

Summary

The Triodos Chair in Sustainable Finance at UPF Barcelona School of Management announces the Award for the best Final Master's Project that addresses the topic of Sustainable Finance with the aim of promoting and giving them visibility.

Tags

Triodos chair

Date

Mon, 03/14/2022 - 12:00

Lego Actualitat

Imatge

Text Actualitat

The Triodos Chair in Sustainable Finance at UPF Barcelona School of Management announces the Award for the best Final Master's Project that addresses Sustainable Finance with the aim of promoting and giving them visibility.

Eguiguren: "The creation of these award is a great initiative to give visibility to Sustainable Finance"

“The Chair has the vision of achieving a stable and resilient financial sector that contributes to an economy centered on people and the maintenance of life on the planet. Its mission is to favor and contribute the debate and action in sustainable finance with a theoretical-practical approach, and independently. The creation of these award is a great initiative that works in this direction”, says the Director of the Chair, Marcos Eguiguren.

In this first edition, participation is open to any master's student in Spain until June 30, 2022. The award has an economic endowment and a jury made up of members of the Chair and the Chair Council .

More information about the award

Highlighted

Off

OG image

"Les finances sostenibles sempre han exclòs la indústria militar"

Anonymous — Mon, 28 Feb 2022 11:08:33 +0000

"Sustainable finance has always excluded the military industry" Anonymous (not verified) Mon, 02/28/2022 - 12:27

Summary

Tags

Triodos chair

Date

Tue, 03/01/2022 - 12:00

Lego Actualitat

Imatge

Text Actualitat

The European Union's new regulations on sustainable investment threaten the financing of the military industry. Commission advisers recommend hanging the "socially unsustainable" label on the defense sector, equating it with gambling or tobacco, in the midst of war with Russia. Defense companies fear that the label of unsustainable deprives them of investment flows essential to maintaining their competitiveness, especially at a time when the world's major powers are embarking on a much more sophisticated arms race. and technological than in the twentieth century. The director of the Chair in Sustainable Finance , Marcos Eguiguren, discusses this situation.

Just at a time of war between Ukraine and Russia, and at a time when great nations are embarking on a highly sophisticated arms race, the European military sector sees its future investments in jeopardy. What do you think about it?

It's a big contradiction. But in the world of sustainable finance, regardless of what we have experienced in recent years, with growing regulation, banks with securities have always practiced and practice a clear exclusion of the arms industry. It has always been a typical exclusion.

To include the military sector in the taxonomy would pervert it

The inclusion of nuclear energy and gas in the taxonomy was a move to please states like France and Germany. The military industry is a large economic sector that moves a lot of money and has great power of pressure. Could we see a similar move this time?

I don't think so because, although in the Western world there is almost a unanimous rejection of the attack on Ukraine, this does not mean that facts and words can be twisted. Apart from the fact that the military industry is largely a very consuming sector of energy and raw materials. I don’t think military industry lobbies get into it because they are highly specialized corporations that receive funding from a part of the financial system that will send them resources yes or no, regardless of any taxonomy. Also, because governments allocate resources to the military industry. They don't need it.

In any case, they may fear a diversion of funds which is now easy for them. With the taxonomy, perhaps banks find it more interesting to invest in the sectors that are included. In the medium and long term, yes, but the global financial sector is huge and there will be financial institutions from outside the EU financing them. And the states themselves will most likely spend public money on it as well. To include the military sector in the taxonomy would pervert it.

The military industry may fear a diversion of funds that is now easy for them to reach

It's a big contradiction: we're creating a taxonomy for private companies and banks to invest in green energy, obviously excluding the military industry. While states will need to increase investment in the military.

This is what the Germans have called Realpolitik since the post-World War II and Cold War years. Most states are not interested in a powerful military industry, but circumstances force us to defend ourselves. It's a contradiction we have to live with.

Contradictions regarding the military sector are normal, as the Commission has recently insisted on the need to exempt VAT from investments in research projects for the development of industry military.

These contradictions have always existed and today they are becoming more obvious than ever because unfortunately we are having a war in Europe again. We would all like the military to be an outcast industry, but deep down and with common sense, we need it. It's a big contradiction.

Imatge

Highlighted

Off

Programes relacionats

3297

3354

OG image

"La CE considera gas i nuclear energies verdes per acontentar França i Alemanya"

Anonymous — Thu, 03 Feb 2022 09:01:47 +0000

"The EC considers gas and nuclear green energies to please France and Germany" Anonymous (not verified) Thu, 02/03/2022 - 11:51

Summary

The European Commission (EC) has decided to include gas and nuclear energy as green energies within the taxonomy to point out to investors the activities that can be classified as sustainable or that contribute to reducing emissions.

Tags

Triodos chair

Date

Thu, 02/03/2022 - 12:00

Lego Actualitat

Imatge

Text Actualitat

The European Commission (EC) has decided to include gas and nuclear energy as green energies within the taxonomy to indicate to investors the activities that can be classified as sustainable or that contribute to reducing emissions. A decision contrary to the criteria of experts such as Marcos Eguiguren, director of the Chair in Sustainable Finance from UPF Barcelona School of Management and Triodos Bank.

Why does the EC consider nuclear energy and gas as green energies in the taxonomy?

The EC approves giving the green label to gas and nuclear for political balance. It does so because France's electricity generation is based on nuclear energy in a large percentage, the French pressure has been very great for nuclear to be considered green. And the same can be said of Germany and natural gas, with gas-fired combined cycle plants, with Putin's permission. This decision is purely a political balance since the EC is due to the Member States, and has shown this deference to the two big ones. And all this absolutely against the criteria of the group of experts on sustainable finance.

The EC awards the green label to gas and nuclear because energy generation in Germany and France is based on these energies

And what do the experts on sustainable finance say?

The group of experts did not incorporate nuclear energy or gas as green energies, leaving them outside the green taxonomy. I would like to clarify that if the fight against climate change is considered green, it is true that nuclear energy does not produce greenhouse gas emissions and gas does, but substantially less than other fossil fuels.

Can gas and nuclear power fight against climate change then?

These energies can fight climate change, yet what we have is a word problem. But can they be considered green energies? As energies that are really clean and do not cause any type of pollution, then the answer is no. Gas generates few gases and nuclear generates radioactive waste that requires very strict management. They are good against climate change, but they could cause other problems.

This decision of the EC can cause these energies to receive large investments, which in fact they already receive. Does this decision leave the green taxonomy a dead letter? Does it run counter to a real green transition?

The taxonomy was created to fight against climate change, to make a list of economic actions, of activities that can be considered positive in the fight against climate change. And as it is created with this idea, yes, nuclear energy fits. The problem is the words, perhaps we should say taxonomy against climate change. If it is called green, with a broader meaning of environmental protection, beyond climate change, then nuclear energy and gas could never be. However, this green gas or nuclear label will only be considered as such to facilitate investments if it is done with specific technologies and until 2045. There are certain limitations.

There is a certain danger that many investments that could go to other energy sources could go to gas or nuclear.

Investing in these energies is a safe bet, compared to others such as renewables, for example.

Despite the limitations, there is a certain danger that many investments that could go to other energy sources could be directed to gas or nuclear.

And what is your opinion on the role of the EC?

The EC should not have changed the taxonomy or incorporated nuclear or gas, in any case it would have recognized them as options for a transition for a limited time. All with harder or more uncomfortable financing conditions for these energies. This decision makes clear the very serious problem that the European Union has, which is a club of States, and this type of thing happens. In a federal EU these things would not happen, surely.

Imatge

Highlighted

Off

OG image

Los bancos quieren salvar el medio ambiente

Anonymous — Mon, 29 Nov 2021 08:22:07 +0000

Banks want to save the environment Anonymous (not verified) Wed, 12/01/2021 - 12:38

Summary

Historian and writer Yuval Noah Harari writes in his book Sapiens, From Animals to Gods: “70,000 years ago, homo sapiens was still an insignificant animal minding its own business in a corner of Africa. In the following millennia they became the master of the entire planet and the terror of the ecosystem ”.

Tags

Date

Tue, 11/30/2021 - 12:00

Lego Actualitat

Imatge

Text Actualitat

Gemma Cid Researcher at the Sustainable Finance Chair

The historian and writer Yuval Noah Harari writes in his book Sapiens, from animals to gods : “70,000 years ago, homo sapiens was still an insignificant animal that cared of his own things in a corner of Africa. In the following millennia they became the master of the entire planet and the terror of the ecosystem. ”

During the pandemic, in an interview conducted at the end of 2020 , he insisted again, telling us that, with covid-19, nature has sent us a small warning, since“ there are much worse things waiting for us if we don't deal with the environmental problem”.

His voice joins that of scientists and organizations, who warn us that we must prevent homo sapiens from definitively ending the climatic conditions that allow our life and society, as we know them.

This year, the United Nations Climate Change Conference was held in Glasgow . The Summit has not allowed to trust that the countries make a clear commitment to reverse the situation. But even though the general sentiment regarding the Summit has been one of a “missed opportunity,” there is one area in which there has been progress, and it is none other than climate-related finance.

The transition to a more sustainable economy will require many resources, so the role of financial institutions and sustainable finance will be key

The transition to a more sustainable economy will require many resources, so the role of financial institutions and sustainable finance will be key to financing all the changes we must undertake.

In the context of International Banking Day , let's look at three different initiatives that indicate what the role of these entities in the ecological transition can be.

The first is one of the advances of the Glasgow Summit. A pact has been signed for a financial alliance that aims to reach zero net emissions by the middle of the century in the investments made by financial institutions. It is the Glasgow Financial Alliance for Net Zero ( GFANZ) . This "net zero" does not mean that they will invest or channel funds only to investments that do not emit CO2, but rather that they will seek to achieve a balance between the CO2 they cut and that they emit. But although it is clear that we must take as positive this step taken by the main actors in the sector, the truth is that the alliance is born with weaknesses: the agreements are not binding, there is a lack of control mechanisms and, in general, there is a lack of credibility.

The second is prior, it was set in 2019, at the United Nations General Summit. They are the Principles for Responsible Banking (PRB). The principles are designed so that banks have guidance to help them align their business with the objectives of the Paris Agreement. These are: aligning the business strategy to contribute to people and society, increasing the positive impacts and reducing the negative ones of its activity, working with clients and users to promote sustainable practices, participating and partnering with stakeholders to achieve the objectives of the society, adopt a responsible banking culture and guarantee transparency with respect to the principles.

Finally, based on the PRBs and to further specify and help financial institutions in their transition to a responsible banking model, the Climate Safe Lending Network published its Good Transition Plan , a roadmap for banks to embark on the process of transition to a solid governance framework, a correct measurement of risks and impacts based on current scientific understanding, a supporting role to the real world and the ecological transition of its own clients, etc.

If banks are limited to taking commitments to the climate as imposed milestones, they will not be achieved

The three initiatives show us the great work and change that banks have ahead, to be good agents of change in the transition to a sustainable economy and society.

Three final thoughts on it.

The first, the impossibility for banks to make such a change if they limit themselves to taking all those commitments, agreements, principles, or even the different legislations that are emerging (which we have not discussed here) as imposed milestones that they try to get take as own. If so, they will hardly succeed.

For the second reflection we will return to Harari. In the second chapter of Sapiens , Harari surprises us by showing us that we live in a world full of “imagined realities”, and that one of them is corporations or companies. "In what sense can we say that Peugeot S.A. does exist? ”asks the author. We could ask ourselves the same thing with any of those banks that must make so many efforts ... since "the bank" does not decide, does not make an effort, does not comply. It would be nice if we focus on what all of us decide, strive and comply (or not). Of course, the current managers of these institutions are the ones who have the most responsibility, the ones who must be aware and steer their impressive companies towards sustainability, but also their employees, their clients (us), their competition, etc.

For the third reflection, the same concept of "imagined realities". If Harari quickly convinces us that these "imagined realities" (despite not really existing, as trees or lions do) have been the key for humans to be able to collaborate in large groups to achieve great objectives, then we can only hope that the company in which we all must embark without further delay (a company understood as a goal or path towards sustainability) is the "imagined reality" that allows us to achieve the objectives set, all together... or, as Harari says, the covid -19 will have been just a small warning of what may come.

Imatge

Highlighted

Off

OG image

La regulación para financiar el crecimiento sostenible: menos es nada

Anonymous — Wed, 17 Nov 2021 11:50:41 +0000

Regulation to finance sustainable growth: less is nothing Anonymous (not verified) Wed, 11/24/2021 - 09:32

Summary

The European Union (EU) has been working for years on how to encourage private capital to focus on financing sustainable activities. Measures have already been put in place within the action plan for financing sustainable growth.

Tags

Date

Tue, 11/30/2021 - 12:00

Lego Actualitat

Imatge

Text Actualitat

Marcos Eguiguren
Director of the Chair in Sustainable Finance
_

The European Union (EU) has been working for years on how to encourage private capital to focus on financing sustainable activities. Measures have already been put in place within the action plan for financing sustainable growth . One of the pillars of the plan is the development of a classification system for sustainable activities which, under the name of Taxonomy Regulation , was approved in July 2020, currently covering objectives and activities in the environmental field.

This Taxonomy should be completed in the coming months with a system that allows classifying sustainable activities, also from a social point of view. To this end, the EU platform for sustainable finance, a permanent group of experts set up, among other things, to advise the European Commission on the development of the Taxonomy Regulation, has published a report for the creation of a social taxonomy that incorporates two dimensions in the definition of what we mean by social.

The Taxonomy Regulation was born as a system for classifying sustainable activities in order, among other things, to be able to facilitate their financing

The future social taxonomy will have a vertical dimension, focused on what companies do (products and services) and another horizontal, focused on how they do things, taking into account the impact on affected stakeholders by the activity of the company.

In order to achieve a balance in the relationships between environmental and social aspects, this report suggests that minimum safeguards in social and governance aspects form part of the environmental taxonomy and that minimum environmental safeguards form part of the social taxonomy that arises from this process. In this way, we ensure that those activities that are primarily financed by EU financial institutions always have a clear social or environmental purpose and that they meet minimum requirements in the other area.

This report for the creation of a social taxonomy is now in the public consultation phase and is expected to enter the final debate phase and be presented for approval to the European Parliament in the first months of 2022.

Seeing these movements one can come to feel pride in our elites, who want the financial sector to make investments with a social and environmental vision. Personally, as an old fox in the field of sustainable finance, since the end of the 90s of the last century, when almost no one talked about these things, I have, as the well-known ballad says, “el corazón partío”. Let me explain.

The future social taxonomy will have a vertical dimension, focused on what companies do, and another horizontal, focused on how they do things

The willful and well-intentioned regulatory offensive of our governments has an interesting point, since it indirectly puts the financial sector in the position to better think about its financing decisions. However, this dimension, which could be considered positive, forgets, as is always the case with our distinguished legislators that, instead of regulating and categorizing everything, it is sometimes better to promote inclusive and solid government models by encouraging adoption by part of the financial sector, with transformative purposes and missions that, in themselves, contribute to changing the culture of organizations and, therefore, their business models.

In other words, the processes and expected outputs are regulated, instead of having legislative frameworks that encourage cultural and governance changes and that, with minimal guidance, deposit the initiative for change in the private sector. If in recent decades there has been a factor that has generated a great consensus among business actors worldwide (absolute consensus is humanly impossible), it is the need to address as quickly as possible the reconversion of the economy towards a paradigm of sustainable development. Believe it or not, dear reader, but in the last ten years, I have not yet met an entrepreneur who is not convinced of the need for conversion. A different thing is the speed of it, which can be different depending on the area.

The categorization and regulation of processes is not always the best option since, in this scenario, business lobbies will always act to try to make sure that the interests of their sectors come out well, while the incentive for a more profound change in governance can make that company that, otherwise, would be lobbying, try to accelerate its transformation in a more convinced and proactive way.

Instead of regulating and categorizing everything, sometimes it is better to promote inclusive and solid governance models by encouraging the adoption by the financial sector of transformative purposes and missions

We are already seeing, as a result of the COP26 in Glasgow, some difficulties in how we qualify some activities. For example, the position defended by France, undoubtedly supported by its powerful energy lobby, that nuclear energy should be considered as part of the taxonomy in its environmental section, has sparked many discussions with supporters and detractors of that initiative. I am not going to position myself on that particular, but it is, without a doubt, an example of how lobbies can influence, not always in a positive way, that taxonomy.

I still believe that different legislative models in which changes in government models are encouraged and companies that have a truly balanced and transformative mission and purpose are promoted, may be somewhat less effective in the short term, but they will surely be much more robust in the long term.

In the meantime, we will have to welcome the EU Taxonomy Regulation, also in its social dimension. Less nothing, but I, I must confess that I still have "el corazón partío ".

Imatge

Highlighted

Off

OG image

Els plans col·lectius arriben per revolucionar el sistema de pensions

Anonymous — Tue, 02 Nov 2021 08:12:23 +0000

Collective plans come to revolutionize the pension system Anonymous (not verified) Thu, 11/04/2021 - 17:57

Summary

The Ministry will put a brake on individual pension plans and will give wings to company or collective plans, increasing their deduction margin and creating a plan to strengthen them. The UPF Barcelona School of Management professor and Director of the Chair in Sustainable Finance, Marcos Eguiguren, believes that now is a good time to ensure the quality of future investments by these actors.

Tags

Triodos chair

Date

Tue, 11/16/2021 - 12:00

Lego Actualitat

Imatge

Text Actualitat

The Minister of Inclusion, Social Security and Migrations, José Luis Escrivá , will revolutionize the panorama for pension plans in Spain. In addition to the pension reform, the Ministry will put a brake on individual pension plans and will give wings to company or collective plans, increasing their deduction margin and creating a plan to strengthen them. This figure is now a minority in Spain, but in neighboring countries they are common and move billions in strategic investments. The UPF Barcelona School of Management professor and director of the International Chair in Sustainable Finance , Marcos Eguiguren , believes that now is a good time to ensure the quality of future investments by these actors.

If the Minister's plan is launched, it means that in a short time there will be large private pension funds with public protection, in the style of France or the Netherlands, which will be large investors.

"The Minister wants to ease the way for the creation of company or group pension funds, which already exist, but they are not very successful due to their legal complexity"

"The Minister wants to ease the way for the creation of company or group pension funds, which already exist, but they are not very successful due to their legal complexity. Now they want to make it universal and also reach SMEs, perhaps organized in associations", says Eguiguren. The Spanish government also wants to extend this opportunity to self-employed workers.

This reform is intended, according to the professor, to change the culture of savings in the country: "We have become accustomed for decades to trust the entire pension to the State." In fact, the replacement rate for pensions (the percentage of a country's public retirement pension compared to the last salary received by an employee) in Spain is 83.4%, one of the most generous in Europe and also one of the most generous in Europe or the Organization for Economic Cooperation and Development (OECD), together with Austria, Italy, Luxembourg, Portugal or Turkey.

"This situation thirty years ago was sustainable, but the population pyramid makes this system unsustainable. The pension system today is a Ponzi scheme," says Eguiguren, who believes that the Government wants to create a system similar to that of countries like the Netherlands or Germany with a superior savings culture. "In thirty years from now, public pensions will be scarcer, but they will be complemented by savings made through this system, dividing the financial responsibility and easing the pressure on the public system," predicts the expert.

The problem pointed out by the teacher is the transition between the current Spanish model and the future. What is clear is that company or group pension funds will be a reality sooner rather than later in the Spanish State.

Pension funds around the world will manage more than $ 56 trillion in assets by 2025

Pension funds around the world will manage more than $ 56 trillion in assets by 2025, according to PwC. Without any doubt they are "systemic investors".

These funds will have a very large size, private management with public criteria and supervision, limited profitability for the manager and a more affordable price for the participant and predetermined investment criteria.

Sustainable investment

In this context, the question that arises is: in what do these pension plans have to invest and what is the role of sustainable finance in this regard?

"The regulation on where these funds will be able to invest will be public and can be put on track in ecological transition projects that the economy needs," proposes Eguiguren. The giant Dutch pension fund ABP has recently announced that it will not invest in fossil fuels and will divest 15,000 million euros in shares of companies in the sector. The Dutch Officials and Teachers Fund will, for example, withdraw its support from Shell.

"There is a great opportunity for the quality of the investments of these pension funds to be a global example"

This is an example of where the investment trends of these pension funds "are accelerating the ecological transition".

The legislative reform of Escrivá to set the investment rates of pension funds is a great opportunity to establish quality standards: "These funds will probably manage hundreds of billions of euros and have the ability to establish standards for promote investments with a high positive environmental and social impact such as renewable energy or social enterprises".

"There is a great opportunity for the quality of the investments of these pension funds to be a global example," concludes Eguiguren.

Imatge

Highlighted

Off

OG image

Oriol Amat toma posesión como rector de la UPF

Anonymous — Fri, 28 May 2021 11:52:52 +0000

Oriol Amat takes office as Rector of the UPF Anonymous (not verified) Fri, 05/28/2021 - 15:43

Summary

Professor of Financial Economics and Accounting, Oriol Amat, has been sworn in as rector of the UPF in the presence of the Hon. Ms. Gemma Geis, Councilor for Research and Universities, and Hon. Ms. Victòria Alsina, Councilor for Foreign Action and Transparency, as well as different members of the university community of Catalonia.

Tags

Triodos chair

Date

Fri, 05/28/2021 - 12:00

Lego Actualitat

Imatge

Caption

Oriol Amat, rector de la UPF

Text Actualitat

Oriol Amat, Professor of Financial Economics and Accounting, was sworn in as rector of the Pompeu Fabra University on Friday, May 28. "We have the determination to be excellent in all lines of activity," said the Rector in a speech in which he expressed the main goals with which he assumes the position:

To continue to be a reference in research
To be leaders in the knowledge transfer
To continue to promote teaching innovation
To lead the commitment to planetary welfare, humanities and culture.

Amat, who was elected rector with 65% of the votes on May 5, took office in a ceremony attended by the Hble. Ms. Gemma Geis, Councilor for Research and Universities, and Hble. Ms. Victòria Alsina, Minister of Foreign Action and Transparency, as well as other members of the former Catalan Government, the rectors of the other Catalan universities and distinguished members of the university community.

"The main purposes and raison d'être of the university are the creation of knowledge and its impact on society," said Amat, who insisted on the desire to "contribute to the improvement of the welfare of people and the planet by reducing socioeconomic and gender inequalities". He emphasized and thanked the outgoing rector, Jaume Casals, for having promoted this task during his two terms of office.

Imatge

Caption

Jaume Casals, rector sortint, i Oriol Amat, rector entrant

Text Actualitat

The University, in six concepts

My proposal is that we help him as much as we can to do the things he wants to do, because he is a person who knows how to listen and who has a clear idea of the best path said Casals during his speech, in which he described the University in six terms: organization, freedom, culture, from outside, style and from the world.

In addition, the Professor of Philosophy and Rector for the 2013-2021 term added a seventh key word: wellbeing. "In the flagship of planetary well-being, I believe that well-being should weigh as much as the planet," Casals reflected. An idea that Amat also incorporated in his speech.

"We must act tenaciously regarding the 2030 agenda and the 17 Sustainable Development Goals," insisted the rector, stressing especially the gender policy.

It is precisely the question of planetary well-being that has been one of the tasks on which Amat has placed most emphasis during his time as dean of the UPF Barcelona School of Management. He will be able to continue developing it, now, as head of the university.

Highlighted

Off