Forging a better world
The final day on the Spotlight stage examined how the financial industry can help the world address the huge challenges of climate risk, financial exclusion, safeguarding biodiversity and beyond.
First in the spotlight was Sir Roger Gifford, a Senior Banker at SEB, and Chair of the London Green Finance Initiative, which was launched in 2016 to further the contribution of the financial sector to the climate agenda.
Gifford immediately underlined the potential for the financial industry to change the world: “I believe in the power of finance to change the way that we behave. It’s why banking is such an interesting business. It’s why we can get passionate about banking as we have the possibility of influencing the way people behaviour financially – and that’s what we are doing with Green Finance,” he said.
Gifford said that the industry needs to become more farsighted in its decision-making, recognising the great impact it can have on the world’s climate. “Carbon dioxide emission last for fifty years, while our economic decision-making normally looks at the next twelve months,” he said.
The industry, he said, needs to transition away from an economic model that relies on resource depletion, especially given the potential economic sustainability to generate trillions of dollars. There are, said Gifford, fundamental economic reasons why companies that invest in sustainable technologies are likely to get stronger and have a lower default risk in the future.
Next up on stage was Mikkel Larsen,Chief Sustainability Officer at DBS Bank Limited, who argued that, for the industry to remain vibrant in the next fifty years, it must have a sense of purpose to solve the real problems facing the world. Larsen set out three key reasons why institutions should care about solving global challenges: “First, it delivers a social licence to operate that we sincerely need; second, it gives longevity to our businesses; and most importantly, it creates an ability and imperative to innovate.”
Underlining the challenges, Larson said that while the economy has lifted millions out of poverty over, many countries still struggle to meet basic social needs, such as education and access to energy and clean water, for their entire populations. Digitalisation and the effective use of new data, he believes, hold much promise for deciphering the interconnections of social and environmental issues. Digitalisation also holds significant opportunities to resolve environmental issues, he said, not least by helping redirect financing towards more environmentally efficient users of capital.
Up next, Nigel Beck, Executive and Group Head: Environmental and Social Risk and Finance at Standard Bank, recounted how the personal growth he achieved in his career in the past twenty years as a sustainable financier has been mirrored by the growing importance of sustainability in delivering value for FIs.
Following his graduation in Masters Environmental Technology in the early 2000s, Beck recounted that, due to a lack of demand, the first job he could get in his field was as a personal assistant in an environmental consultancy. He became an environmental consultant, working predominantly for mining companies doing environmental impact assessments for clients. This, he said, was treated largely as a compliance task by his clients.
In his 10+ year career at Standard Bank as a sustainable financier, Beck has seen a similar transition. “At first, nobody had a clue what I did; they thought I was a hippy. Then the financial crisis came, and environmental and social governance became more and more important to the financial industry. Over the next ten years, environmental and social governance in finance has moved from a position of compliance to business.”
Looking to the future, Beck thinks that the imperative for sustainable finance is going to be driven by demand. “Companies are having to respond to consumers. They need transparency in their supply chains, the need for tech to ensure that their products from source to shelf are sustainable, we need technology to make sure that there is no child labour in the value chain, that there is no adverse impact on biodiversity,” he said.
After the break, Bianca Lopes, the Co-founder of Talle, challenged the audience to question the latest buzzwords and trends and reflect deeply on what needs to happen to transform ideas into real customer impact. She said that the desire for financial institutions to lead and build with new values is not just a customer imperative, it is felt internally in our teams and across our ecosystem. Lopes said that financial leaders should not assume they have a know it all, but instead draw on the knowledge and skills of the humans throughout their organisations.
Inez Murray, CEO at the Financial Alliance for Women, underlined the challenges faced by women in developed and developing nations in managing their financial lives. Murray said that while women control close to 80% of consumer decisions worldwide, almost three-quarters are dissatisfied with their banking services. Whatever segment of women you look at, she said, they are either dramatically un or underserved by the financial services sector and that closing the gender gap by merely accessing a bank account would add $24Billion to global banking revenues.
The next quick-fire talk was from Chloe Combi, Author, Speaker, Consultant, Futurist who discussed the importance of creating a future generation strongly educatedand engaged in their personal finances. Combi said that the banking industry is not successful in communicating to Generation Z, who grew up in the shadow of the 2008 global crash. She highlighted the overall decline in the teaching of finance and economics in schools and the negative opinion that young people sometimes have of the financial sector. This, she said, made for real danger of losing an entire generation to internet misinformation, miscommunication, poor education and trendy alternatives to traditional banking.
Closing the second session, Conan French, the Senior Advisor, Digital Finance at the Institute of International Finance started by recounting the stark statistic from The World Bank that estimates that 1.7 billion people remain unbanked and 1 billion lack a legally recognized identity. French said that while Facebook claims that their new digital currency, Libra, can close this gap in financial inclusion, he thinks that exciting developments in digital identity to check, confirm and authorise new customers will be the key to opening up financial services to those wholly unserved.
In the afternoon, the Author and Broadcaster, Julia Hobsbawm invited us all to celebrate being human in an age of machines. In a provocative talk, Hobsbawm said that humans are at a pivotal moment in history, where technology is an essential part of our working and personal lives. But, she said, we need to retain our human skills and our humanity in order to get the best of machines and not be subsumed by them. Hobsbawm noted that, in the banking sector, data shows that customers want more digital inclusion and mobile services, but everyone wants the human touch.
Next in the spotlight, Christopher Wellise, Chief Sustainability Officer at Hewlett Packard Enterprise discussed the need for finance, and the world at large, to quickly transition from a “take, make, use, dispose” economy to a circular economy that decouples economic growth from resource consumption and rethinks how our natural resources are transformed into capital. Wellise underlined that the natural resource deficit is rising out of control, with “1.7 earths” needed to sustain current resource consumption. He said that the transition to the circular economy isn’t just good for the planet, it could generate $4.5 trillion of additional economic output by 2030.
Closing a truly memorable week on the Spotlight stage, Tania Ziegler, Head of Global Benchmarking at Cambridge Judge Business School discussed the potential of regulatory innovation for enabling financial inclusion. Ziegler said that FinTech has the potential to extend financial services to the unbanked and underbanked population and promote financial inclusion worldwide, but also presents many regulatory challenges, especially for emerging and developing economies. Some regulators, she said, have responded to these challenges by innovating themselves, creating regulatory sandboxes and innovation offices with the potential for enabling financial inclusion.