tHe BUsIness Case FoR sUstaInaBle FInanCe

tHe BUsIness Case FoR sUstaInaBle FInanCe

Edited by Iveta Cherneva

The post-fi nancial crisis period marked by refl ection and analysis of “what went wrong” has put the spotlight on the operations of the global fi nancial industry. Until recently, environmental, social and governance (ESG) factors have been present only in the soft domains of ethics, philanthropy and reputation management. Few academic works have asked the question: is there a business case for sustainable fi nance? Published on 20 June this year in the week of the UN Rio+20 conference on sustainable development, the edited volume The Business Case for Sustainable Finance brings together fi nance industry insider perspectives from top global institutions, which focus on the bott om line for integrating ESG factors into the operations of the fi nance industry. “Highly recommended. The book provides a truly global picture, drawing on the expertise of the foremost voices in the sustainable fi nance space.” – Dr. James Giff ord, Executive Director, United Nations Principles for Responsible Investment

"In this collection of outstanding essays – where the business case meets sustainable fi nance in China and South Africa; for poverty reduction and climate change; with microfi nance and ESG analysis – the rubber meets the road and it will leave its mark. You won't want to miss it." - Steve Lydenberg, Founding Director, Initiative for Responsible Investment, Kennedy School of Government, Harvard University “Topical and timely, the book will be useful to fi nance professionals, as well as students of fi nance. It addresses the elephant in the room: does sustainable fi nance make commercial sense for fi nancial institutions?” – Colin Melvin, CEO, Hermes Equity Ownership Services Ltd.

From sector-specifi c perspectives such as investment, asset management, banking, and microfi nance, to current topics such as quality of management, litigation, climate change, natural capital, labour, human rights standards, impact investing, and poverty reduction, to managing risk in emerging markets such as China and South Africa, The Business Case for Sustainable Finance provides a global picture of the way issues traditionally seen as ethical and public “do-good” issues actually aff ect returns in a very real numerical way. Here is how some of the study contributors commented on these issues for GBM:

“As the evidence mounts of how important ESG issues can be to the fortunes of corporations, these factors are seen less as the weird preoccupation of an isolated minority and more as the central issues that they really are.” Mike Scott, Journalist

“There are associated risks with investing in emerging markets”, Helena Vines Fiestas, in emerging markets”, Co-Head of SRI Research and Head of Co-Head of SRI Research and Head of Sustainable Thematic Research, BNPParibas Sustainable Thematic Research, BNPParibas Asset Management Asset Management

“In South Africa fi nance institutions face “In South Africa fi nance institutions face signifi cant risk-associated challenges related signifi cant risk-associated challenges related to climate change and the conservation of to climate change and the conservation of natural resources, which require a framework natural resources, which require a framework for ESG risk identifi cation and a long term for ESG risk identifi cation and a long term strategy for effective risk management”, strategy for effective risk management”, Madeleine Ronquest, Head of Environmental and Social Risk, FirstRand Group Ltd. and Social Risk, FirstRand Group Ltd.

“Integrating ESG indicators has been accepted as an essential element of accepted as an essential element of mitigating risk and avoiding investment in mitigating risk and avoiding investment in ‘unhealthy’ institutions”, Dr. Harry Hummels, ‘unhealthy’ institutions”, Managing Director, SNS Asset Management Managing Director, SNS Asset Management

“There is an added value to combining fi nancial and non-fi nancial metrics”, Marieke fi nancial and non-fi nancial metrics”, de Leede, Impact & Investment Analyst, SNS de Leede, Impact & Investment Analyst, SNS Asset Management Asset Management

“Investors need to look beyond stock-specifi c issues and take a more holistic approach to issues and take a more holistic approach to risk management that encompasses wider risk management that encompasses wider structural risks”, Rory Sullivan, Strategic structural risks”, Adviser, Ethix SRI Advisers Adviser, Ethix SRI Advisers

“There is a low-carbon fi nancial opportunity, which is defi ned by two complementary which is defi ned by two complementary trends: fi rst, taking energy out of the trends: fi rst, taking energy out of the economy through improvements in effi ciency; economy through improvements in effi ciency; and second, taking carbon out of energy and second, taking carbon out of energy by curbing emissions from fossil fuels”, Nick by curbing emissions from fossil fuels”, Robins, Head of Climate Change Centre of Robins, Head of Climate Change Centre of Excellence, HSBC. Excellence, HSBC.