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ESG changed my mind on…how sustainable finance can be impactful

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In this summer series for ESG Clarity, members of the sustainable investment industry tell us how their thinking on this fast-moving industry has adapted over the years and what changes that has led to.

Here, Rebecca Kowalski questions whether sustainable finance makes enough difference, admires pension divestment campaigners and discusses ditching the car for Dutch bikes.

What has ESG or sustainable investing changed your mind about over the past couple of years?

The last couple of years have been very formative ones for me. My sustainable finance consultancy business is precisely two years old and I have progressed from cheerleader to coach for team ESG!

Two years ago, I was riding the wave of success of my former employer’s sustainable investment launch. I was enthused by exciting investment themes, engaged clients, new connections and increasing AUM. 

Since then, having helped other firms create and refine their own versions of  sustainable finance and written 86,000 words about Sustainable Finance Advice for the CII, I’ve been asking myself and others many questions. There remains one massive query I feel could be better resolved. Does sustainable finance make enough of a difference and how could it be more impactful?

This is the foundation on which all future work should be built. We’ve spent too much time talking about the good, bad and ugly of ESG integration. It’s taken up huge amounts of time and energy and I’d like to see more conversations about impact. If concrete examples of real-world positive outcomes remain elusive, then let’s talk about what could be, what we can push towards, about how finance can really help us navigate a finite world.

I’d like to feel more like sustainable investment is about reflecting a sustainable economic, environmental and social system – I guess I’m with the UK’s Financial Conduct Authority and its Sustainable Impact label on that one.

Describe one thing about ESG or sustainable investing you’ve heard recently that has stuck with you or been particularly poignant.

I recently attended some online webinars hosted by various groups campaigning for local authority pension divestment from oil. I know that divestment and engagement is hotly debated and personally feel that both have their time and place. The commitment and effort and articulacy of the people campaigning for large pension scheme divestment is really impressive, however.

They are tackling all stakeholders – trustees, councillors, members, pensioners and trade union reps with some well thought out and well-communicated arguments. Given the billions of pounds under debate, it makes me think about the argument of not wanting to be the last investor standing in this industry. 

It also brings home the different views and approaches that you find within and without the finance industry, as recently illustrated by Greta Thunberg’s spat with Baillie Gifford.  Having a lot of time for both parties, this is an area why I would really like to see engagement replacing walking away. If climate campaigners and investment managers want to share the same messaging of a climate emergency, planetary boundaries and a just transition, it would be great to see more dialogue, debate and collaboration.

What changes have you made personally this year to become more sustainable?

I feel like, on a personal level, all the big changes have been made. I’ve ditched the car, swapped plane for train for UK travel, but did revert to being vegetarian as my solo attempt at veganism just meant we were cooking more dishes to suit everyone, which has its own footprint.

As a family, our footprint will be reducing, as my husband has taken a job in the Netherlands and ditched his car for a cycling commute to work. On a recent visit, we had great fun exploring local towns on the electric scooters/mopeds you can pick up for hire on the street. Its great how the cult of the car has been culled there, it makes sitting outside early evening and having a coffee or a glass of wine so much more pleasant. I will be joining him soon and am interested to see what else I can learn from the Dutch when it comes to all things sustainable.

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