Hannah from the Primary Asset Finance team recently attended the Sustainable Finance roundtable, hosted by the UCL Centre for Ethics and Law, where sustainable Finance is defined as finance that takes into account and deals with environmental, social and governance issues.
The roundtable discussion focused on issues relating to the extent to which sustainable finance could be applied to the finance market generally, and whether or not profitable finance and sustainability are mutually exclusive. The panel of speakers included 10 key figures and experts in academic and professional law, economics, finance and financial services regulation. Some of the most interesting comments from the speakers are summarised here.
The keynote speaker, Professor Steven Schwarcz advocated that, to promote lending to small businesses in the US, the government should provide emergency “back up” housing to any small business owners whose business failed but they borrowed money against their residential property, therefore leaving them homeless after losing the company. Schwarcz believed that this kind of socially responsible and government supported lending could increase business and jobs in less economically developed areas.
Other speakers focused on the current unsustainability of finance, and commented that there are too few environmental experts working to support the finance industry in efforts to become more sustainable (Professor Bert Scholtens); we need experts from a range of industries to collaborate to provide a realistic solution. Further, David Rouch (speaking in a personal capacity) suggested that sustainability needs to be better defined and that consumer investors (e.g. people investing in pension funds) are indeed concerned with sustainability as well as profit/income, although the banking sector seems to ignore this concern.
Finally, Dr Javier Solana made the interesting point that there is too much focus on making finance more sustainable and too little focus on making finance lessunsustainable. He suggested that this would be a more achievable strategy to improve sustainability, starting with the current approach and working towards a better situation, rather than starting with the ideal (and maybe impossible) situation and working backwards from that.
Overall, it was an interesting discussion on how we can improve and promote sustainable finance, and a great chance to be in a room with so many experts on the subject. It was a thought-provoking roundtable on a very important topic.