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Last week, we were joined by three experts in the sustainable investing space to discuss the recent IPCC report and its potential impact on the finance industry….
Ben McNeil, a climate scientist and co-founder and Head of Product, Technology and Science at Emmi; Tom McQuillen, Principal at ReGen Ventures, and Becka Bannan, Strategic Engagement Consultant at Emmi. Our panelists kindly took time out of their busy schedules to discuss the ramifications of the IPCC Report on the corporate strategies of companies in the finance industry.
Given the negative outlook presented in the recent IPCC report, are we doomed?
The speakers collectively proposed that the situation should not be viewed as ‘apocalyptic’. Rather, the bleak outlook envisaged in the IPCC report should serve as a wake-up call for companies and stakeholders to take this necessary step towards instigating climate reform "if we have any chance of clawing back on the ramifications of climate change".
Changing the perception of environmental sustainability in finance
When asked to discuss the current state of climate reform in the financial sector, our three panelists conveyed a clear message - environmental sustainability and our push towards net-zero emissions will slowly, but surely, be fully integrated into the strategic vision of the finance industry. In addressing the potential opportunities of this push towards net-zero, our panelists pointed to the changing perception of the everyday consumer as a vital catalyst for corporate-driven climate reform. Nonetheless, the speakers alluded to the competing priorities of finance companies as a potential roadblock to climate reform. For instance, it was noted that companies in the finance industry will inevitably be forced to balance corporate investment value with sustainability in making this shift towards climate reform.
Our panelists also spent some time discussing how investing could actually help save our climate. The speakers emphasised the importance of investing for reform in current industries as opposed to solely looking to the renewable space. It was noted that the large capital flows towards wind, solar and hydro electricity addresses only 25% of the emissions problem, as the other 75% of emissions stem from from industries such as transport and agriculture. Therefore, we must look towards changing current practices in said industries to effectively properly address the issue of climate sustainability.
Offering further commentary on the above, Rebecca noted the importance of filling the void of immeasurability as “the best investment decision we can make”. Particularly, our ability to create a three-dimensional risk and return analysis in measuring the impact our investments enables us to appreciate and track the real world impact our investments have on our climate, thereby changing the role of investing towards having a purposeful and impactful objective.
For someone with no background in finance, how do you recommend them to get involved in this emerging field?
There are many things those without a finance background can do to get involved in impact investing. For instance, directing your super towards ESG funds and investing in companies that resonate with your ethos of environmental sustainability are a few ways you can get involved in the impact investing space. Indeed, all three speakers pushed this notion that you must get up and “do something”, especially by seeking insights from others who have experience in impact investing, and inquiring to learn more about what you can do to help. Another piece of advice was to boost your knowledge and intellectual skills in investing, for “At this point you’re capital poor but intellect rich”. The reality is that in this day and age, investment firms yearn for cognitive diversity by seeking out people who have different approaches to solving an array of problems, and can offer unique perspectives on different issues.
