Provide more finance to the SDGs and bring more of the SDGs into finance
By Patrick Odier, Senior Managing Partner of the Lombard Odier Group
This article was originally published in Le Temps, in French, on 4 August 2019. Translated with www.DeepL.com/Translator. The SDG Lab provides this translation for informational purposes only. Please consult the original article “La Suisse durable à Genève” (paywall).
Long supported by a handful of pioneering institutions, sustainable finance has accelerated dramatically over the past four years, to the point where it is now becoming the norm rather than the exception in a booming financial industry. In this way, each financial centre seeks to position and establish itself as a reference centre in sustainable finance, in order to take full advantage of the sector's very strong growth.
Of course, not all financial centres are equal when it comes to sustainability expertise. The analysis of environmental and social impacts cannot be improvised, and asset managers need substantial investments, often several years, to develop the tools, methodologies and expertise needed to compile these data precisely, and to ensure that they become decisive criteria in the decision to invest, on the same basis as risks and returns.
Links created in two years
In this respect, the Geneva financial centre has undeniable advantages: the proximity of international organizations, UN agencies and large private foundations allows Geneva's banks and managers to develop their expertise by working alongside the international community which, on the other side of the lake, lives the challenges of sustainable development on a daily basis, often in the field. This unique proximity to the world has not always been fully exploited in the past. With the notable exception of microfinance, where a proactive collaboration of the various ecosystem actors has given rise to what is now called impact finance, exchanges between the two shores of Lake Geneva have sometimes had difficulty moving beyond the stage of good intentions to concrete achievements.
Fortunately, for the past two years, the actors have been structured and organized. Geneva and Switzerland are now fully playing their role as laboratories and innovators in sustainable finance. Innovative projects involving international organizations and Geneva banks are multiplying, such as the Humanitarian Impact Bond set up by the International Red Cross, with which Lombard Odier has been closely associated.
The "Pipeline Builder", a platform developed at the initiative of the SDG Lab, is another striking illustration. This tool, currently under development, aims to ensure that the 17 Sustainable Development Goals (SDGs) are achieved more quickly, by bringing out the best investment opportunities from the various UN agencies and other partners, in close collaboration with financial specialists.
The SwiSOX project, led by Sustainable Finance Geneva, consists of establishing the "Nasdaq for social enterprises" in Geneva. A project that would not have been possible without the participation of the academic sector or that of a large private foundation active in the environment in Lake Geneva. It is also necessary to mention the local actors of fintech, several of whom focus on sustainable finance or impact measurement. They help to accelerate innovation and build the transformative solutions that will be used by the international financial community in the future. Finally, the establishment in Geneva of the Sustainable Financial Centres Network (FC4S) in 2018, which was achieved by hard work, reaffirms its role as an international hub for sustainable finance.
Epicentre of sustainability
All these new collaborations are a unique opportunity for the Swiss financial centre to further strengthen and deepen its expertise in sustainable finance. They also represent a huge responsibility at a time when funding needs have never been greater. Climate change, biodiversity, inequalities, a total of nearly seven trillion dollars per year will have to be mobilized to achieve all the SDGs by 2030. Geneva will undoubtedly be at the epicentre of this immense challenge and all the actors of the ecosystem will have to use all their know-how to bring more finance to the SDGs and bring more of the SDGs into finance.
This coming October will be the occasion to mark a new stage with the creation in Geneva of the very first "Sustainable Finance Week", organized in a collaborative manner by all the institutions on both sides of the lake, but also to strengthen the bridges between the financial centres of Zurich and Geneva, all supported by the federal, cantonal and municipal authorities.
Several major events, traditionally organized separately, were brought together over an intense week of conferences, workshops and exchanges, which will make it possible to highlight the various components of the Geneva ecosystem, but also to cross-fertilize ideas and bring out new projects.
The importance of learning
This week will also be a real showcase for Geneva of the expertise developed in sustainable finance over many years. In fact, the know-how available in Geneva and Switzerland covers the entire range of solutions, from exclusion to ESG (environmental, social and governance) integration, impact investment or thematic funds. Whether they are large companies or specialized offices, generalists or "pure players", the map drawn up by Sustainable Finance Geneva, which lists nearly 150 institutions involved in the field, shows all the richness of our city. A unique know-how whose recognition is difficult to obtain beyond Switzerland’s borders, partly because of the limited resources devoted to know-how.
Many other financial centres, which are objectively less advanced than Switzerland in these areas, have developed communication and marketing tools that position them in a way that is favourable to the general public and investors.
Let's bet that this Sustainable Finance Week will help to fill this recognition gap and will become a permanent feature of the landscape as the sector's flagship event at the international level. The only one capable of bringing together such a diversity of institutions working together for the same objective: to create a more ecological, prosperous and equitable world today and for future generations.
Web tile image courtesy of Xavier von Erlach on Unsplash.