Building on the proceedings of Day 1 that witnessed over 300 key leaders converge with the aim of fostering industry-wide collaboration and mainstreaming ethical finance, the second and final day of the 2nd Global Ethical Finance Forum convened by Middle East Global Advisors in strategic partnership with the Islamic Finance Council UK (UKIFC) witnessed further insights critical for the industry going forward. The Forum was held under the patronage of the Scottish Government, supported by the UK Government and hosted by the Royal Bank of Scotland (RBS) at its Headquarters in Edinburgh.
Building upon the legacy of the inaugural Forum held in September 2015, the theme for GEFF 2017 - “Ethical Finance: Merging Profit & Purpose”, is in line with the Forum’s aspiration to serve as a platform of convergence and collaboration across the responsible finance universe, and to forge a vision for a more inclusive and sustainable financial system.
In an exemplary opening keynote address and what was possibly a fitting case study, Jameel Ahmad, Deputy Governor, State Bank of Pakistan (SBP), took the audience on Pakistan’s journey to embracing financial inclusion, wherein he spoke about responsible finance and its pre-requisites and cited some informative statistics highlighting Pakistan’s global recognition in embracing financial inclusion. He further expanded on State Bank of Pakistan’s impressive strategic approach towards responsible finance, in particular strengthening the framework for microfinance consumer protection and the national financial literacy programme being rolled out. He also took into account the obstacles that may pose a hindrance in achieving the goal of effective financial inclusion.
In a scintillating Plenary session that focused on the importance of putting sustainability at the heart of banking practices, Ugo Biggeri, Chair of the Board of Directors, Banca Etica, said, “It is the need of the hour to bring back meaningfulness and reputation to the financial sector. Ethical finance is also about possessing social and environmental goals, ways to measure them, a sound disclosure policy and investment criteria. Through this way, we can certainly narrow the wide gap that presently exists between finance and the real economy and ultimately bring finance closer to people and the planet.”
Expressing his views during the informative panel session on ESG Screens and risk mitigation, Anthony Hobley, CEO, Carbon Tracker Initiative, said, “We need to see a paradigm shift whereby ESG reporting becomes the norm and is just an integral part of any financial decision. For that to happen, it needs to be seen as critical to the management of financial risk and achieving better returns. This goes to the holy grail at Carbon Tracker, how does one translate the environment, climate energy transition risk into quantitative financial risk and opportunity? To achieve this, ESG needs to be much more forward-looking than backward-looking, it must be capable of stress-testing business models against foreseeable risks and transitions and capable of flagging the collapse in valuation we have already seen in US coal European energy utilities.”
Elaborating on the challenges of aligning the financial system with sustainable development, Nurlan Kussainov, CEO, Astana International Financial Centre (AIFC) Authority, stressed, “Within the current business model in the financial services sector, the speculation and arbitration is always based on asymmetric information. People from low-income groups who have less access to the information end up suffering more. With the financial services sector rapidly embracing technology, there is a strong belief that in the near future there will be a reduction in the current communication gap that the sector presently faces. This will bring a very positive impact on to the development of Islamic and ethical finance across the world, helping it to realize its global value proposition.”
In a powerful and fitting closing keynote address, Nigel Kershaw, Chair, The Big Issue, said, “There is a lot of talk about ethical finance and in particular ESG and social impact because it’s talked about primarily by people involved in the financial sector. I believe the democratization of capital is extremely central to what we do. Quite often, the discussion is top-down supply and product-led and for me, it often misses one of the most important social outcomes that is quite often forgotten – that’s the opportunity for ordinary people to invest and save in creating a better place to live for themselves, their families and the community around them. It’s not about mainstreaming ethical finance, it’s all about bringing the mainstream to us.”
GEFF 2017 witnessed a host of sessions tackling the most pertinent issues affecting the ethical finance industry. Leading industry experts analyzed the challenges at hand and focused on coming up with effective suggestions with the ultimate aim of developing a convergence roadmap for the ethical finance industry at large. The core issues that were brought to the fore on Day 2 comprised of the massive potential green bonds harbour, ESG Screens and risk mitigation, the importance of embedding sustainability in banking practices, the challenges of aligning the financial system with sustainable development, an Innovate Showcase wherein entrepreneurs and intrapreneurs showcased innovative ethical finance solutions and an interesting concluding panel session on how to sell financial products based on their values.
The forum took place on the 13th & 14th of September at the Royal Bank of Scotland (RBS)’s prestigious Conference Centre in Edinburgh, Scotland. The two-day forum culminated in an exclusive Civic Reception at the historic Edinburgh Castle, hosted by Keith Brown MSP, Cabinet Secretary for the Economy, Jobs & Fair Work, Scottish Government.