SFG’s 15th Year Anniversary: Tour de Table with SFG’s Founders!

For our 15th year anniversary, we asked our founding members to look at what has been accomplished in the field of sustainable finance over the past 15 years and what are the challenges that still need to be overcome to make sustainable finance truly mainstream. Here are some of their thoughts.

What is the biggest advancement you have seen in sustainable finance since SFG was established?

The incredible increase in so-called ‘sustainable’ investments, which at the time represented only a modest proportion (10 to 15%) and which now constitutes more than half of the funds distributed in Switzerland.  This acceleration has taken place in just a few years. Awareness raising has been tremendous, because of the pressure from clients, politicians/regulators, the media and civil society. ESG is now part of the strategy of most banking institutions, it is no longer a ‘nice to have’, it has become a ‘must have’.”

– Angela Dewolff, Partenaire chez Conser

 

“The UN and the ecosystem have managed to have major asset owners and asset managers embracing the concept of sustainable finance.”

– Antoine Mach, Cofounder and Managing Partner at Covalence

 

“If 15 years ago sustainable finance was a niche topic, its integration is now inevitable not only in terms of discussions and debates but also in investments decisions. In this regard, beyond the controversies associated with this type of asset, I am convinced that the most important advancement is the integration of the notion of impact – in addition to financial performance or risk – because it directly refers to the responsibility of both the investor and the company that will deploy these assets.”

– Étienne Eichenberger, Cofoundor of Wise

 

“The term ‘Sustainable’ is no longer incompatible with ‘Finance’.”

– Guillaume Taylor, Umbutu

 

“Sustainability has become the topic in finance, the trend to be followed. Becoming mainstream is a great achievement while it represents huge challenges particularly related to the the definition of the frame of sustaianable finance and its implementation.”

– Cédric Lombard, Chairman and Head of investments, Impact Finance

 

“SFG was established by a group of individuals within financial institutions passionate about aligning investments with sustainable development goals.  Today sustainable finance is fully recognised and advocated by the leadership of financial institutions.  SFG has demonstrated that changing the course of institutions is possible through the power and influence that can be unleashed by a group of individuals acting together towards a common goal.  Congratulations SFG for your important contributions to this remarkable shift to mainstreaming sustainable finance in Switzerland!”

– Cheryl Hicks, Senior Advisor, Water Mandate

 

“A better understanding of the heterogeneity of the sector. Different intentions and approaches to sustainable investment exist and are a function of different management styles, client expectations and regulatory requirements. Each philosophy and approach plays a legitimate role in this ecosystem, as long as they are consistent with the investor’s financial objectives.”

– Natacha Guerdat, Managing Director, Partner and Head of Research, Asteria Investment Managers

 

What are the challenges that still lay ahead for the industry on its journey to sustainability?

“The advent of sustainable finance is a major trend that comes with significant challenges. Everyone is doing it, but the investor has difficulty discriminating among the multitude of solutions. They remain confused and even lost when faced with the multiple approaches, terminologies and indicators used. The fear of greenwashing is real. Restoring trust between providers and investors is a key issue to ensure the sustainability of sustainable finance. We can count on the emergence of ESG standards and independent verification, but we must never abandon common sense and critical thinking.”

– Angela Dewolff, Partner at Conser

 

“Challenges still ahead of us are: investors need to clarify their intentions regarding sustainability, for instance their preference for a single or double materiality approach. The fiduciary duty of investors towards their beneficiaries is likely to be redefined.”

– Antoine Mach, Cofounder and Managing Partner at Covalence

 

“In order to become accountable to each stakeholder, I think that standardization and readability of extra-financial performance reporting for the investor remains a major challenge, even if progress is clearly being made year after year. But is it fast enough?”

– Étienne Eichenberger, Cofounder of Wise

 

“Measuring impact along a full value chain remains a big challenge. Sometimes creating a positive impact on a part of a value chain equally creates a negative impact on another part. As long as we do not have the capacity to measure the full value chain, it is difficult for us to state that we indeed have a net positive impact to society and/or the environment.”

– Guillaume Taylor, Umbutu

 

“Squeezed between greenwashing and cynicism of a growing number of financial actors and the anti-woke movement walking hand in hand with the leftist contenders of capitalism, the sustainable finance industry is shaking. Regulation is the only way ahead along with a growing awareness and deontology of the professionals and their customers.”

– Cédric Lombard, Chairman and Head of investments, Impact Finance

 

“What the industry invests in is one thing; how it invests can be quite another.  The values and incentives within the finance industry are often still misaligned with the values and incentives of sustainable development.  While there has been much innovation in the past decade around what the industry invests in, the challenge ahead will be also innovating around how the industry invests to be truly aligned with sustainable development goals.”

– Cheryl Hicks, Senior Advisor, Water Mandate

 

“Future investment must optimize risk, return and impact. Climate and other impact objectives must be incorporated into all investment strategies. There is a real expectation that investors will play a key role in achieving tangible real-world results. On the other hand, there is a growing role for technology in the ability to collect and manage global data. Technology will help assess the credibility of companies’ transition plans, and thus better manage climate change-related investment risks and opportunities.”

– Natacha Guerdat, Managing Director, Partner and Head of Research, Asteria Investment Managers

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