The Building Bridges Summit: Moving sustainable finance forward

Symbolically located on a bridge linking International Geneva with the city’s financial hub, Bâtiment des Forces Motrices was the ideal location for a summit between representatives from both sectors on how to scale up their collective impact.

Since financial institutions will play an indispensable role in achieving the United Nations’ Sustainable Development Goals, it is essential that our industry work closely with investors, governments, businesses, the UN and society to make finance more sustainable and increase responsible investment. The Lombard Odier Group is proud to have been part of this significant step in moving sustainable finance forward.

Accelerating the transition towards sustainability

The Summit was chaired by Patrick Odier, Senior Managing Partner of Lombard Odier. In his opening remarks, Mr Odier said, “In recent years, I have witnessed and participated in the construction of a number of metaphorical bridges. As far as I can remember, this is the first time so many decision-makers and thought leaders with such varied backgrounds have been united in Geneva for one common purpose: to accelerate the transition towards sustainability.

“We must work together to build a better world, a more inclusive economy and a more responsible finance. We can no longer allow a dichotomy to emerge in our vision of the world, where the common good is the sole responsibility of the public sector and politics, and where the role of companies is reduced to the pursuit of profit for their shareholders.

“Whether it is our food, health, energy, technology or infrastructure, companies produce almost everything that meets humanity’s most basic needs. Thus, there is no effective policy to enhance sustainable development that does not rely on them.

“By deciding to which companies, business models and innovations they allocate capital, investors significantly shape the world of tomorrow. Together, we can ensure that we build a more sustainable world today.”

Switzerland and sustainable investment

Switzerland has a vital role in the development of sustainable finance. In the first talk of the day, Ueli Maurer, President of the Swiss Confederation, said, “Switzerland has the state on one side, creating optimal conditions. And it has markets on the other side. We count on markets to create sustainable products that investors want to put money into.”

And signs so far are good. In his speech, Sergio P. Ermotti, CEO, UBS Group, pointed out, “Today, 11% of investments on average contribute to SDGs. In Switzerland, it is around 20%.”

Introducing the day’s first round table, ‘Connecting investment to impact’, Patrick Odier said, “The challenges we face are global and complex in nature, requiring integrated approaches and participation from a variety of stakeholders and expertise.”

The panel included Thomas Vellacott, CEO of World Wildlife Fund Switzerland, who expanded, “We cannot afford niche solutions. We need to go mainstream much faster. Market participants want to see to sustainability across the board.”

Technology and sustainability

Technology is the most significant driver of our changing world, as Peter Bakker, President and CEO, World Business Council for Sustainable Development, emphasised during his remarks: “Sustainability will shape that change, and it will be all about people, planet and integration. Let’s call it purposed-based capitalism.”

A significant way in which sustainability and technology are set to interact is in the growth of the circular economy, a key theme of the Summit. “The circular economy is not just about recycling,” said André Hoffman, Vice Chairman, Roche, and President, Fondation MAVA, during the second round table. “It’s about envisioning the future product. Short-term profit maximisation is destroying the planet. Capitalism must reinvent itself for the future.”

Simon Zadek, Principal, UNDP (United Nations Development Programme), expanded on the role of technology in sustainability: “Digitalisation offers a transformational opportunity at the heart of the way financial decisions are made. It takes us to the heart of the SDGs and a future of financial inclusion.”

Time for sustainable finance

Opening the afternoon session, Sabine Döbeli, CEO, Swiss Sustainable Finance, emphasised the urgency of moving sustainable finance forward: “If we carry on as we are, we’re not on track to meet the SDGs. Switzerland is a country of firsts, but more innovation is needed to make sustainable finance more impactful. We must cross the bridges we’ve built.”

A key part of this work will involve the better integration of environmental, social and corporate governance (ESG) measures. “ESG makes economic sense,” said Claudia Bolli, Head of Responsible Investing, Swiss-Re, during the ‘ESG Integration’ round table. “By taking sustainable investing into account, businesses will have better risk-adjusted returns.”

However, there are problems to be overcome, as Philipp Krüger, Associate Professor, Geneva Finance Research, pointed out: “ESG ratings diverge, and so they are being called into question. Why? We do not know. Perhaps it’s to do with how companies disclose their results, or how they define ‘E’, ‘S’ and ‘G’. So, can we optimise the way we measure ESG? Should we ask regulators what they want to see disclosed?”