Sustainable Investor Summit Online 2020 - Key Takeaways 25 - 26 November 2020 - Sustainable Investor Summit 2020 - Institutional ...
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Sustainable Investor
Summit Online 2020 –
Key Takeaways
25 - 26 November 2020
Sustainable Investor Summit 2020 www.ic-icf.com
TABLE OF CONTENTS
Contents
OVERVIEW............................................................................................................................................... 3
EVENT AGENDA – DAY I .......................................................................................................................... 4
EVENT AGENDA -DAY II ........................................................................................................................... 5
CEO – WELCOME ADDRESS ..................................................................................................................... 6
ESG .......................................................................................................................................................... 7
COVID-19, SUSTAINABILITY, CLIMATE CHANGE AND RISK MANAGEMENT............................................ 8
PUBLIC POLICIES, REGULATIONS & SUSTAINABILITY ............................................................................ 10
CAPITAL ALLOCATON ............................................................................................................................ 12
ESG DATA GAPS..................................................................................................................................... 14
ENERGY & INFRASTRUCTURE ................................................................................................................ 16
IMPACT THROUGH LISTED EQUITIES .................................................................................................... 18
PRIVATE EQUITY & VENTURE CAPITAL.................................................................................................. 20
INTEGRATED MOBILITY ......................................................................................................................... 22
GENDER SMART .................................................................................................................................... 24
SUSTAINABLE AGRICULTURE, BLUE ECONOMY & FOOD TECH............................................................. 26
EMERGING MARKETS ............................................................................................................................ 28
CLOSING BY THE HOST .......................................................................................................................... 30
ATTENDING COMPANIES ...................................................................................................................... 31
SPONSORS & SUPPORTERS ................................................................................................................... 32
Sustainable Investor Summit 2020 www.ic-icf.com
OVERVIEW
OVERVIEW
The “Sustainable Investor Summit” was an industry event in the German-speaking
DACH region about sustainability and impact investing. The conference, already in its
third year, saw increased participation from investors, asset managers, companies
and many others in this segment. Intensive knowledge transfer, the exchange of
information and experience as well as networking beyond the conference were some
major goals for the participants.
The SIS Forum was a two-day conference, held industry, investors, companies, NGOs, the public
online due to the travel restrictions imposed by sector and academia to discuss the latest trends in
(Covid-19) pandemic. But it did not affect the sustainable and impact investment & finance, and
participation and saw highly experienced and the role of financial innovation, data and markets.
enthusiastic panels with active audience. The Topics ranged from public policy and regulatory
speakers came from different professional issues, energy system transformation and
backgrounds, which brought in different infrastructure change, environmental, social,
perspectives on the various topics discussed during governance (ESG) and SDG integration in equities,
the two-day event. bonds, private market investments with a focus on
private equity, emerging market credit, sustainable
Even though making progress on climate policy agriculture and food tech and hedge fund activism,
continues to be challenging as evidenced by to technology innovation and data. We heard from
various segments, government is moving ahead business and finance executives on why
compelled not only by the need to manage risks but sustainability is a strategic agenda in the C-Suite
also the opportunity to drive sustainable economic and boardroom and how executives can lead
growth. Accelerating market drivers and ongoing change; and experts reported on how gender
technology innovation are also making sustainability diversity becomes gender lens investing - and what
a strategic imperative that is reshaping industries investment products are already available.
and investments.
This white paper provides a summary of key
The 3rd Sustainable Investor Summit brought takeaways
together leading experts from the financial services
Sustainable Investor Summit 2020 www.ic-icf.com
EVENT AGENDA - DAY I
EVENT AGENDA – DAY I
Welcome address
Hans-Peter Dohr, CEO, IC Institutional Capital
ESG - From Vision to Action
Robert Bluhm, Sustainability Officer, Universal-Investment
Covid-19, Sustainability, Climate Change and Risk Management - Implications for Institutional
Investment in all Asset Classes
Janina Lichnofsky, Senior Specialist Sustainability, MEAG
Young-jin Choi, Head of Impact Investing, PHINEO
Steve Bernat, Founding Partner, ONE group solutions
Tristan A. Förster, Managing Director, ClimatePartner
Moderator: Dr. Maximilian Horster, Managing Director, ISS ESG
Public Policies, Regulation & Sustainability - Guidelines, Reforms, EU Action Plan on Sustainable
Finance, and its Impact on the Financial Industry
Dr. Caroline Herkströter, Partner, Norton Rose Fulbright LLP
Ullrich Hartmann, Partner FS Europe Risk & Regulation Leader, PwC
Capital Allocation - Portfolio Construction with ESG Integration and Impact
Yannick Ferber, Manager Client Relations, Sustainalytics
Dr. Anja Hochberg, Head of Multi-Asset Solutions, Swisscanto
Alexander Zanker, Head of ESG Analytics, LGT Capital Partners
Dr. Lothar Jonitz, CEO, tetralog systems
Moderator: Markus W. Voigt, Managing Partner, aream
ESG data gaps - Can we solve it already?
Inka Winter, CEO, ESG Screen17
Hannah Helmke, CEO and Founder, right. based on science
Moderator: Amara Goeree, Founder, Blue Phoenix
Energy & Infrastructure - The Energy Transition & Paths to a sustainable and resilient infrastructure
Marc Gerards, Senior Investment Manager, EB-Sustainable Investment Management
Michael Volkermann, Managing Director & Global Head of Project Finance, Deutsche Bank
Rick Walters, Director Infrastructure, GRESB
Markus W. Voigt, Managing Partner, aream
Moderator: Dr. Klaus Bader, Partner, Norton Rose Fulbright LLP
Impact Through Listed Equities - Opportunities and Challenges
Dr. Bernd Spendig, Head of PIP & WM Structuring & Solutions, HypoVereinsbank–UniCredit
Christoph Klein, Managing Partner, ESG Portfolio Management
Gesa Vögele, Member of the Management, CRIC
Ali Masarwah, Editor-in-Chief, Morningstar
Moderator: Prof. Dr. Dirk Söhnholz, CEO – Diversifikator
Private Equity and Venture Capital - Generating Alpha and Positive Impact
Cyril Gouiffès, Head of Social and Environmental Impact, European Investment Fund
Dr. Andreas Nilsson, Founder and Managing Director, Sonanz
Dr. Marc Moser, Associate Director Impact & ESG, LGT Lightstone
Dr. Christin ter Braak-Forstinger, CEO and Founder, Chi Impact Capital
Moderator: Eugen Keller, Senior Manager, KPMG Luxembourg
Sustainable Investor Summit 2020 www.ic-icf.com
EVENT AGENDA - DAY II
EVENT AGENDA -DAY II
Welcome address
Hans-Peter Dohr, CEO, IC Institutional Capital
Integrated Mobility - Market Changes and Innovation
Dr. Martin Hohla, Managing Director, MobilityFund
Paul Leibold, CEO, ACM Adaptive City Mobility
Patrizia Ilda Valentini, Business Development Manager EV & NM, Groupe Renault
Christine Scharinger, COO & Expert Mobility, KIR Group
Moderator: Felix Kuhnert, Global and German Automotive Leader, PwC
Gender Smart - Impact Investing with a Gender Lens
Julia Bewerunge, Associate Vice President, ISS ESG
Hedda Pahlson-Moller, Chief Catalyst, TIIME
Katherine Milligan, Head of Gender & Diversity, Bamboo Capital Partners
Julia Profeta Johansson, Co-Founder, ConsciousGrowth & ella impact
Moderator: Manuela Fröhlich, Co-Founder, Fondsfrauen
Sustainable Agriculture, Blue Economy & Food Tech - Disruptions, Improvements and
Opportunities
Jos Boeren, Head of Agriculture & Food Investments, Stafford Capital Partners
Dr. Klaus Kunz, Head of Sustainability & Business Stewardship, Bayer
Sebastián Popik, Founder & Managing Partner, Aqua Capital
Dr. Dennis Fritsch, Project Coordinator, UNEP FI
James Hook, Partner, LeadX Capital Partners
Moderator: Jonas Aechtner, Project Manager, WWF Germany
Emerging Markets - Private Credit as an Impact Lever & Getting Emerging Markets Investments Right
Florian Kemmerich, Managing Partner, Bamboo Capital Partners
Steffen Klawitter, Director, Finance in Motion
Simon Gupta, Head of Business Development, responsAbility Investments
Hannes Manndorff, Managing Director, Equity, Österreichische Entwicklungsbank
Moderator: David Creighton, Chairman, Convergence Blended Finance
Closing by host
Hans-Peter Dohr, CEO, IC Institutional Capital
Sustainable Investor Summit 2020 www.ic-icf.com
CEO – WELCOME ADDRESS
CEO – WELCOME ADDRESS
Hans-Peter Dohr opened the event with a brief on “Sustainable Investor Summit” and provided some
background on the history and purpose of the conference. The Sustainable Investor Summit aims to
build upon the work done in the UK by the UK Impact Investing Implementation Taskforce, from
2016 to 2018. IC Institutional Capital is a supporter of UK Impact Investing Institute, and also a
member of FNG, supporting impact investing movement in Germany.
Hans-Peter drew attention to one of the key
questions that was raised in the final report of the
Implementation Taskforce on growing a culture of
social impact investing in the UK – “How can the
leaders of savings, pensions and investments
engage with individuals to enable them to support
more easily the things they care about through
their savings and investment choices?” along with
the five recommendations to overcome the hurdles
to sustainable and impact investing (Fig 1.)
He then spoke about the biggest misconception
related to sustainable investing that
sustainability means to sacrifice financial
returns. He highlighted the various options
available to investors ranging from “Financial Only”
which have limited or no regard to ESG concerns,
to “Impact Only” which purely address societal Figure 1
challenges without generating financial returns.
He proceeded to give the participants a brief overview of the history and framework of Sustainable
Investing. Since the launch of first sustainable mutual fund by Pax World in 1971, the sustainable
investing movement has come a long way with global ESG/SRI investments reaching USD31
trillion in 2018. The growing interest in sustainable investing is also evident by the increase in PRI
(Principles for Responsible Investing) members from approx. 100 in 2006 to over 3,000 in 2020. The
17 Sustainable Development Goals (SDGs), introduced in 2016, provide framework and reference to
better understand sustainable investing. The European Union also presented its sustainable finance
action plan in 2018.
Sustainable Investor Summit 2020 www.ic-icf.com
KEYNOTE PRESENTATION
ESG
From Vision to Action
The multiverse of ESG
implementation
Most fund initiators and
institutional investors
already use ESG strategies
Source: Universal Investment Sustainability Survey 2020
Industry participants today have different focus on sustainability, and each firm needs to
perspectives on sustainability and efforts are find its own way to approach sustainability.
being made to align those perspectives with a Each approach/strategy has its own merits and
common goal. You have to act according to optimizes to some of the SDGs. Market
what you think is necessary for the participants needs to build their own
sustainability of your (investment) business. understanding and start with a general
With the introduction of EU Sustainable strategy around how to incorporate sustainable
Finance Action plan, the role of regulatory and practices in their respective fields.
legislative requirements is becoming more
important in driving sustainability. Measuring ESG is highly complex since we do
not have a standard provider, and specially will
There has been an increase in sustainable be difficult for someone who is not educated in
finance over the recent years, but we are still this space. There are a multitude of ESG data
at the beginning of a transition phase towards providers in the market, providing thousands of
a sustainable economy. Some industry data points on various parameters. Each data
participants have a long history of sustainable provider has a different methodology, and we
finance whereas some are just starting. The can have completely different scores and
key forces driving sustainability today are risk rating for the same company. Then comes the
management, legislative requirements, possibility of data gaps, where on one hand
Conviction/ Strategy of the firm, and Non- data is missing and it becomes difficult to draw
Legislative/Societal pressures. On a company conclusions, and on the other hand we might
level, having proper governance structures end up with too many data points.
that oversee the sustainability strategy can
help drive the change towards sustainability. In (ESG) criteria are an increasingly popular way
addition, firms must have their own for investors to evaluate companies in which
sustainability goals based on their unique they might want to invest. Of course, no single
circumstances company can pass every test in every
category, so investors must decide what is
What constitutes sustainable is constantly most important to them.
changing. There are different ways for firms to
Sustainable Investor Summit 2020 www.ic-icf.com
PANEL DISCUSSION
COVID-19, SUSTAINABILITY, CLIMATE CHANGE AND RISK
MANAGEMENT
Implications for Institutional Investment in all Asset Classes - The Global View
From left to right: Young-jin Choi, Head of Impact Investing, PHINEO; Steve Bernat, Founding Partner, ONE group solutions
Moderator: Dr. Maximilian Horster, Managing Director, ISS ESG; Tristan A. Förster, Managing Director, ClimatePartner;
Janina Lichnofsky, Senior Specialist Sustainability, MEAG
COVID-19 and climate change crisis are both sales revealed that ESG funds not only
global level issues which cannot be single experienced lower withdrawals in March 2020
handily solved by any one country. All of us when the Pandemic hit, but ESG fund inflows
need to act together, and to act now to prevent bounced back to pre-Covid level much faster
future risks. There is, however, a difference and even exceeded pre-Covid levels in May
between the two, wherein actions taken for the 2020. Not only ESG seems to be more
COVID-19 crisis at a country level will impact resilient it also seems to have benefitted from
the respective area whereas that will not be the COVID-19 crisis. For example, ESG
the case with the actions taken for climate Investing and climate change at MEAG has
control. We have experienced how delay in gained more importance following the
action by Governments in response to Covid pandemic.
lead to high costs (both financial and non-
Private market investments, which are
financial), similarly, a delay in response to
relatively a new entrant in the ESG investing
climate change could lead to huge costs for
space, saw increased fund inflow with new
the global economy.
funds being launched. PE firms are already
ESG funds account for 14% of European AUM adapting their investment strategies with what
and an analysis of ESG vs Traditional funds they believe will be sustainable in the long run.
Sustainable Investor Summit 2020 www.ic-icf.com
PANEL DISCUSSION
COVID-19, SUSTAINABILITY, CLIMATE CHANGE AND RISK
MANAGEMENT
Implications for Institutional Investment in all Asset Classes - The Global View
“ “The pricing mechanism of the market has terribly gone wrong over the past three decades
and led to allocations of capital into fossil fuel assets with immense negative climate impact
that never should have happened.”
Young-jin Choi, Head of Impact Investing, PHINEO
”
The pandemic has highlighted the importance accepted, it would be difficult to change the
of the financial services sector in bringing a overall industry behavior. For example, Saudi
positive change and transformation. As per a Aramco raised USD12 billion last year through
recent EY report, the number of ESG investors a public issue that was oversubscribed 12
globally is expected to double in the next two times and it again raised USD8 billion through
years. In Europe, 84% of all investors either bonds this year, with the participating banks
are or required to be investing in ESG oriented including the likes of JP Morgan Chase,
products in the next two years. Therefore, Morgan Stanley, Goldman Sachs.
managers who are able to mobilize and launch
Carbon pricing can be an important tool in a
products in the ESG space are expected to
transition to carbon neutrality by incentivizing
witness an increased demand for their
projects that are delivering positive climate
services.
impact and by making fossil fuel and other
Global capital markets structure has been climate negative investments less attractive.
tested tremendously through this crisis in a To achieve net-zero emissions by 2050, we
way never experienced before, for example by need the mechanism to offset carbon emission
moving to remote trading operations etc. As with carbon offsetting projects i.e., projects
with the financial crisis in 2008 (example of that take emissions out of air or at least avoid
systemic risk), COVID-19 exposed the need to carbon emissions. This is resulting in a
develop new institutional structures, grounded growing demand for carbon offsetting projects.
in a networked understanding of complex
We need to get better at managing systemic
system dynamics. And when it comes to
risk if we are to prevent further outbreaks and
climate crisis, the level of societal and
have a robust response to climate change. As
institutional change required is of a much
the science progresses, our understanding of
larger magnitude as compared to Covid
the drivers and mechanisms of complex
It is important to have rules & regulations and issues, such as climate change and COVID-
incentives in place to promote a carbon neutral 19, improves, and science can provide a better
footprint. As long as negative climate impact understanding of the impacts that different
investments are profitable and totally courses of action are likely to take.
Sustainable Investor Summit 2020 www.ic-icf.com
KEYNOTE PRESENTATION
PUBLIC POLICIES, REGULATIONS & SUSTAINABILITY
Guidelines, Reforms, EU Action Plan on Sustainable Finance, and its impact on the
Financial Industry
The European Union has set forth the goal to institutions to assess the developments in
become climate-neutral by 2050.The business strategy, governance of
greenhouse gas reduction targets have been sustainability, and most importantly, their plan
revised from 40% to 55% reduction by 2030, to quantify sustainability risk.
which highlights the increasing push from the
Both ECB and BaFin have issued guidelines to
government towards sustainability. Policy
help institutions manage ESG-related risks.
makers, public opinion, increasing customer
Institutions need to identify how sustainability
demands for sustainable products, legislations
risks are changing other risks and affecting the
and regulations, all play a crucial role in
overall risk management. Both outline
facilitating the transformation towards a
supervisory expectations, taking into account
sustainable future. The recent Covid-19 crisis
the extent to which they have exposure to
has acted as a catalyst in this transformation
sustainability risks. In addition to those
and is encouraging the system to move
guidelines, the European Banking Authority
towards sustainability.
(EBA) published a Discussion Paper on
The Sustainable Finance Action plan from the management and supervision of ESG risks for
European Commission requires a huge credit institutions and investment firms at the
change in market dynamics to fulfil the end of 2020 to collect feedback for its final
regulations therein. Regulatory agencies, report on how ESG factors and risks could be
including ECB and BaFin, would be getting included in the regulatory and supervisory
into supervisory dialogue with banks and major framework.
“ Sustainability becomes an integral part of the entire business model and thus requires a
transformation of the entire banking industry.
Ullrich Hartmann, Partner FS Europe Risk & Regulation Leader, PwC
”
Sustainable Investor Summit 2020 www.ic-icf.comKEYNOTE PRESENTATION
PUBLIC POLICIES, REGULATIONS & SUSTAINABILITY
Guidelines, Reforms, EU Action Plan on Sustainable Finance, and its impact on the
Financial Industry
Source: Keynote Presentation: Sustainable Finance by Ullrich Hartmann, Partner FS, PwC Europe Risk & Regulation Leader,
25th November 2020
There are a lot of developments happening on greenwashing. A study conducted on behalf of
the product side as well, with new sustainable European Commission revealed that only 3 of
products being launched at an unprecedented 101 UCITS equity funds marketed as
rate. To give an example, sustainable open- sustainable fulfil the criteria of the draft EU
ended funds in Germany increased by ecolabel for financial products. The study says
EUR100 billion within a few years whereas the that the low figure is due, among other things,
entire German fund market took around 40 to the fact that only the first two environmental
years to reach a comparable size. To prepare objectives of the taxonomy can be assessed
better for this shift towards sustainability, a lot and also to insufficient company data. These
of regulations focused on sustainable financial regulations aim at providing guidelines and
products have been introduced, including better transparency around what constitutes
taxonomy regulation, disclosure regulation, EU sustainable financial product, disclosure
Ecolabel, EU Green Bond standard, requirements and certification requirements for
Benchmark regulation. sustainable financial products, among other
things.
Increasing and comprehensive regulations
support ESG products and reduce the risk of
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
CAPITAL ALLOCATON
Portfolio Construction with ESG Integration and Impact
From left to right: Yannick Ferber, Manager Client Relations, Sustainalytics; Dr. Lothar Jonitz, CEO, tetralog systems;
Dr. Anja Hochberg, Head of Multi-Asset Solutions, Swisscanto; Alexander Zanker, Head of ESG Analytics, LGT Capital
Partners; Moderator: Markus W. Voigt, Managing Partner, aream
One of the key challenges that asset are managing those risks. We need to look not
managers today face is alignment of short- only at the present risks but also the future
term investment strategies with long term risks that the company could be facing.
sustainability goals. Different managers are
A question that often comes up in sustainable
coming up with different approaches to bridge
investing space is that how one can make their
the gap between the differing time horizons
current portfolio more sustainable without
and breaking down longer term climate and
sacrificing financial returns. An analysis of two
other sustainability targets into smaller,
sample portfolios, one composed of traditional
measurable periods. For example, a portfolio’s
financial products without ESG considerations
adherence to longer climate change objectives
and other composed of similar assets in terms
can be measured with the annual change in
of industry, asset class, but with an ESG factor
the carbon emissions of portfolio constituents.
incorporated, resulted in similar diversification
Another challenge that asset managers are benefits for the investors. There was no
facing is management of transition risks statistical difference in the return profile of
brought about by sustainable investing. For these two portfolios whether the sample was
example, the German car manufacturing sustainable or not, which means investors can
industry in facing an environmental risk when reach a sustainable portfolio which has a fit
looked from a net-zero carbon transition lens. with the investors’ return objectives while also
It is important to access the material risks each achieving similar diversification benefits as a
portfolio company is exposed to and how they traditional portfolio.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
CAPITAL ALLOCATON
Portfolio Construction with ESG Integration and Impact
“ We believe that it is a huge responsibility of the finance industry to support sustainable
targets.
Dr. Anja Hochberg, Head of Multi-Asset Solutions, Swisscanto
”
Another important observation that was made investors such as pension funds have
when assessing companies on ESG increased their allocation to ESG products, but
parameters is that financially well performing it is still around just 25%, leaving a lot of room
companies usually have high ESG ratings. for growth.
Consequently, a portfolio of sustainable
products is found of have lower risk compared More refined portfolios can be constructed with
to its non-sustainable counterpart which scored ESG data, which has become available
translates into a higher risk-adjusted return for in response to investor demand for information
sustainable portfolios. about public companies’ attributes and as a
consequence of disclosure requirements from
There are many approaches one can take to governments and regulatory entities. For
integrate ESG considerations into portfolio example, one might start with looking at SDGs,
construction. Most investors started with a and target companies which positively
simple “exclusion” approach, but there is now contribute to one or more of those goals. As
an increasing shift towards impact investing. more regulations come in, there will be a
To have a more direct and measurable impact, higher pressure from investors to invest in
it is important for asset managers to actively ESG products, which would in the long run
drive change by initiatives such as active lead to an improvement in the performance of
engagement with the companies. Institutional those products.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
ESG DATA GAPS
Can we solve it already?
From left to right: Moderator: Amara Goeree, Founder, Blue Phoenix; Hannah Helmke, CEO and Founder, right. based on
science; Inka Winter, CEO, ESG Screen17
There are a lot of ESG data providers in the topics that are easily understandable by
market today, but still there are a lot of gaps in investors. This gives investors the opportunity
ESG data such as not enough coverage, to set their own preferences and invest in
relevance of data for individual companies, topics that they care about most. ESG
different underlying methodologies, parameters, by their inherent nature, are highly
incommunicability of data to investors, and so subjective in nature, and therefore, it is
on. necessary for data providers to translate them
in a language that is easily understandable by
When looking at the ESG ratings/ scores/
asset managers and investors alike.
metrics provided by different data providers,
we can come across examples where the Another big challenge in the ESG data market
same company might have completely is the lack of coverage. For investors to be
different ESG assessments by different able to compare two companies on ESG
providers. And the reason for that is the grounds, the data must be obtained using the
different inputs used in calculating those same underlying methodologies. However, as
values, each one is correct in its own way. we discussed above, different providers have
There are different data inputs, different different inputs and methodologies to calculate
methodologies and different definitions of ESG ESG scores. Therefore, it is important for each
in the market. data provider to have comprehensive
coverage, covering not only the bigger
One of the ways to bridge this gap is to link the
corporates but also smaller companies to
data to SDGs, which provide a globally
enable sustainable investors to invest in those
accepted framework for sustainability through
companies.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
ESG DATA GAPS
Can we solve it already?
“ I think we will see more consolidation i.e., more merges and acquisitions of ESG rating
agencies. However, looking at the current market developments, I think that ESG data will
become more and more publicly available. There are many initiatives out there that target
more transparency and accessibility of ESG/non-financial data.
”
Hannah Helmke, CEO and Founder, right. based on science
From a benchmarking perspective, we need to they need to increase their coverage universe,
define what constitutes a relevant data set for initially on a pragmatic level and then building
each industry, and then find ways to access upon that by adding new components,
that data from bigger as well as smaller modules for different asset classes, but using
companies. It is also important to have sector a consistent methodology.
specific benchmarks for different ESG
parameters to facilitate comparison between As ESG investing matures, we need to find
companies operating in the same sector as ways not only to standardize the underlying
well as across different sectors. Data providers raw ESG data provided by different vendors,
need to make sure that their methodologies but also the methodologies used to calculate
are simple enough to be understandable by ESG ratings/scores, to facilitate better
the investors, provide maximum transparency comparison between companies, and promote
on their methodology and at the same time increased fund inflows in sustainable investing.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
ENERGY & INFRASTRUCTURE
The Energy Transition & Paths to a sustainable and resilient infrastructure
From left to right: Rick Walters, Director Infrastructure, GRESB; Moderator: Dr. Klaus Bader, Partner, Norton Rose Fulbright;
Marc Gerards, Senior Investment Manager, EB-Sustainable Investment Management; Markus W. Voigt, Managing Partner,
aream; Michael Volkermann, Managing Director & Global Head of Project Finance, Deutsche Bank
The panel discussion was focused on the EU informed decision-making, and further
Green Deal, its impact on the energy and fostering investments in environmentally
infrastructure sector and identifying investable sustainable activities.
opportunities in the sector. The EU Green Deal
We are still at the very beginning of the energy
has set binding targets for industry participants
transition. It is a fundamental change in how
with regards to sustainable investing, reporting
we create, use and store energy, and would
and disclosures. These targets, supported by
require huge financing from governments and
the surrounding regime of regulations such as
private investors alike. In certain markets,
taxonomy & disclosure, could lead to
solar energy is now the most cost-efficient
increased flow of funds in the Energy &
resource of energy due to the developments in
Infrastructure sector.
underlying technologies over the last 10 years.
There was already a global trend in favor of Technology has also helped an increase in
renewables and infrastructure assets before Offshore wind projects, which were considered
the taxonomy regulations development. high risk 10-12 years ago due to less maturity
Taxonomy regulations aim to provide clarity in the market but are much more investable
and transparency on environmental now due to better wind data and hence lesser
sustainability to investors, financial institutions, risk.
companies and issuers, thereby enabling
PANEL DISCUSSION
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
ENERGY & INFRASTRUCTURE
The Energy Transition & Paths to a sustainable and resilient infrastructure
“ There are a lot of unknowns in the transition of transport to sustainability so it is hard to
predict what is, or will be, ‘best’. It is fair to say that EVs have come a long way and will
almost certainly have a bright future, while the role for hydrogen in transport is less certain.
Rick Walters, Director Infrastructure, GRESB
”
Investors with more risk appetite are now future, while the role for hydrogen in transport
looking at Asia, Korea, Taiwan, Japan in the is less certain. Some estimates of renewables
offshore wind segment. Additionally, new growth show a need to double the rate of
technologies such as floating wind projects are investment up to 2030 and triple it then to
now getting into market and are expected to 2035 if we are to decarbonize the economy. In
see investments inflow in the coming 3-5 the meantime, government support in the form
years. of subsidies could also encourage investment,
particularly in emerging technologies.
However, in order to reach the EU Green Deal
goals, we will have to look beyond the solar The Covid-19 pandemic has introduced major
and wind projects and think from an overall new uncertainties for the energy sector and
system integration perspective. The spectrum increased dramatically the range of pathways
is wider than that (solar, wind, geothermal, that it could follow. The key questions include
hydropower and ocean energy) and we should the duration of the pandemic, the shape of the
think about overall energy infrastructure. We recovery, and whether energy and
need to do further research and development sustainability are built into the strategies
in technologies such as hydrogen to make adopted by governments to kick-start their
them financially suitable for institutional economies. We are now moving rapidly
investors from a risk return profile. It is fair to towards decarbonization and investors need to
say that Electric Vehicles have come a long watch the developments closely to manage the
way and will almost certainly have a bright environmental risks of their portfolios.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
IMPACT THROUGH LISTED EQUITIES
Opportunities and Challenge
From left to right: Christoph Klein, Managing Partner, ESG Portfolio Management; Dr. Bernd Spendig, Head of PIP & WM
Structuring & Solutions, HVB-UniCredit; Ali Masarwah, Editor-in-Chief, Morningstar; Gesa Vögele, Member of the
Management, CRIC; Moderator: Prof. Dr. Dirk Söhnholz, CEO, Diversifikator
Public equities, as an asset class, do not For example, how can an investor measure
provide a real opportunity to create a direct the impact generated by USD1 million
impact as a solar or wind energy project does, contribution to an equity fund? Then comes
however, they may create an indirect impact in the problem of quantifying the impact. Rating
the long run. As a starting point, it’s a good providers employ different methodologies to
idea to avoid investments that negatively assign a numerical score for different SDGs,
impact any of the SDGs. Investors can also but they fail to answer questions such as how
drive impact through active engagement and many hospital beds are being built in a
proxy voting and working together with the particular country. And it gets only more
management of companies in a constructive complicated when we try to measure the
manner, to find ways in which companies can impact on a fund level, due to the diversity of
create a positive social or economic impact by underlying securities.
utilizing their existing strengths and resources.
There has been a huge growth in the sales of
It is also difficult to measure the impact in ESG mandated funds in Europe, with 40% of
listed equities. Even though there are rating all net inflows in Europe targeting funds with
providers in the market that provide scores on ESG mandates. It has also led to an increase
various SDGs per company, it is difficult for in the number of asset managers launching
investors to measure the materiality of the new ESG funds.
impact from the scores themselves.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
IMPACT THROUGH LISTED EQUITIES
Opportunities and Challenges
“ ESG and socially responsible investments typically include stocks which score well on those
dimensions. The business activities of the included companies typically do not matter unless
they appear on exclusion lists. Impact investments want to improve the world and are mostly
oriented towards the 17 sustainable development goals of the United Nations.
Prof. Dr. Dirk Söhnholz, CEO, Diversifikator
”
Research has shown that engagement and with one perspective supporting investments in
voting strategies can have a real positive those companies to support the initiative of
impact. The success probability of such transition towards sustainability, and the other
strategies is a lot higher when large investors perspective to not invest in those companies
are also involved in driving impact, but even and direct funds into the companies with best
small and medium investors can have success scores on an absolute basis.
in bringing positive change.
From an asset managers perspective, ESG
An interesting question that arose during the ratings are still expected to be the “go-to” tool
discussion was if one should invest in green when it comes to measuring risks as they are
bonds issued by a brown company, or should much more tangible than SDGs. However, if
we invest in companies that have a higher rate we talk about measuring real impact, we need
of transition towards sustainability but have a to develop tools to measure impact that would
low absolute score relative to peers. The allow investors to see the impact their money
panelists had differing opinions on the matter is driving.
“ Currently, fund companies are delivering transparency on the aims on their funds mostly on a
narrative basis. The coming of SFDR rules next year and the implementation of technical
standards in 2022, the positive impact of equity funds will become measurable for investors.
The EU has put the bar quite high, and the quality of non-financial and financial disclosure is
set to increase in the next years thus reducing the risk that investors could fall into the
greenwashing trap.
Ali Masarwah, Editor-in-Chief, Morningstar
”
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
PRIVATE EQUITY & VENTURE CAPITAL
Generating Alpha and Positive Impact
From left to right: Dr. Christin ter Braak-Forstinger, CEO and Founder, Chi Impact Capital;
Dr. Marc Moser, Associate Director Impact & ESG, LGT Lightstone; Cyril Gouiffès, Head of Social and Environmental Impact,
European Investment Fund; Dr. Andreas Nilsson, Founder and Managing Director, Sonanz;
Moderator: Eugen Keller, Senior Manager, KPMG Luxembourg
Private equity or venture capital as an asset While integrating ESG considerations in
class has great potential to drive positive investing reflects the investors’ mindfulness of
impact and attractive financial returns, not only the externalities of their investment and is
through investing directly in companies that intended to avoid harm and mitigate negative
have a proven solution to address social and impact, impact investing typically goes far
environmental issues, but also through direct beyond the integration of ESG considerations
investments via impact funds or impact fund- in investing and seeks to proactively create
of-funds. It also plays a very important role in impact.
the traditional financial markets, by bridging
Impact investing on the private equity side is
the funding gaps in the financing ecosystem.
supposed to create real measurable value and
Alpha can be regarded as a good measure of positive impact (vis-à-vis a more passive value
performance as it indicates when a strategy, alignment approach). A few elements that one
trader, or portfolio manager has managed to can look at while assessing impact
beat the market return over some period. It investments are intentionality, scalability, and
generates value for the investors and provides a positive correlation between alpha and
a good platform as the deciding base. Impact positive impact. Positive impact triggered by
investing in private equity seeks to positively the innovation induced by an impact company
correlate alpha and positive impact. is not an externality but an intentional solution
to a social and environment issue, at scale.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
PRIVATE EQUITY & VENTURE CAPITAL
Generating Alpha and Positive Impact
“ There are clearly certain sectors, mostly the ones representing basic human needs such as
healthcare, education and food that provide many investment opportunities across the globe.
However, there are regional differences and we also see rising investment opportunities, both
in number and size, across more modern trends and elevated needs, such as digital financial
services, renewable energy, sustainable transportation or smart cities.
”
Dr. Marc Moser, Associate Director Impact & ESG, LGT Lightstone
Since all the participants in the impact measure the companies on certain predefined
investing space are working towards a impact KPIs that directly drive positive social
common goal of driving positive change, there or environmental change. The KPIs must be
is a willingness to share knowledge and separate for each investment based on the
information, which is crucial to help impact unique characteristics of each company, and
investing strategies gain the momentum it its ability to drive impact. We need to come up
needs to contribute to achieving the SDGs. If with ways to measure impact in a manner that
we look at the financing gap to achieve the can be quantifiably presented to all
SDGs, we are still short of over USD 2.5 trillion stakeholders, which would not only enforce
annually, which further highlights the role of accountability, but also add credibility to the
private capital and that PE and VC in particular impact investing space. It is also important for
have to play. all stakeholders in the value chain, including
the investors, fund managers and the
Coming to the topic of measuring impact, one entrepreneurs, to have a clear understanding
of the approaches already promoted by a of what impact objectives are to be pursued.
number of PE/VC market players is to
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
INTEGRATED MOBILITY
Market Changes and Innovation
From left to right: Dr. Martin Hohla, Managing Director, MobilityFund Management; Mag. Patrizia Ilda Valentini, Busines
Development Manager EV & New Mobility, Groupe Renault; Paul Leibold, CEO, ACM Adaptive City Mobility;
Christine Scharinger, COO & Expert Mobility, KIR Group; Moderator: Felix Kuhnert, Global and German Automotive Leader,
PricewaterhouseCoopers
Transport does not have a dedicated SDG, yet products and develop sustainable mobility
it plays a critical role in enabling other SDGs solutions. Alternative fuel vehicles powered by
and achieving growth and development. For alternative drive technologies – namely,
example, without reliable and sustainable electric and fuel cell vehicles – are crucial to
transport systems, young people cannot attend reduce emissions in the passenger transport
school (SDG 4), women cannot access sector. But these technologies also come with
opportunities for employment and their own set of challenges.
empowerment (SDG 5), and the world cannot
The Covid crisis has severely impacted the
curtail greenhouse gas emissions (SDG 13).
shared mobility sector. According to a market
The sector is responsible for a quarter of research done by PWC around mobility, it was
global greenhouse gas emissions, as well as found that participants in China and US were
related environmental and social challenges more likely to increase their usage of private
such as air pollution and noise emissions. This cars/vehicles due to the COVID crisis. In
is fuelled by the continued use of combustion Germany we saw a different picture where 7%
engines in passenger transport. Against this increased their car use but there was a
background, there is increasing regulatory and significant increase in the use of bicycles.
economic pressure on producers of However, shared mobility is expected to
automobiles, buses, trains, and component bounce back once things go back to normal.
suppliers to reduce the emissions of their
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
INTEGRATED MOBILITY
Market Changes and Innovation
Coming to the topic of e-mobility, we have autonomous vs driven and renewable vs fossil
seen an increase in the number of players, fuels. Autonomous vehicles are still a far
with more and more car manufacturers coming reality, and we do not expect L4 autonomous
up with their version of electric and hybrid driving before 2033 and it is expected to
cars. However, energy supply still remails a capture only a 17% market share by 2035. An
challenge. Energy suppliers need to ramp up ideal scenario would be a combination of these
the charging infrastructure to support the three and would provide a solution to many
increase in electric vehicles. problems – “an Electrified autonomous car
owned by no one”, but that vision would take a
We are looking at the market from two different
very long time to materialize.
points – first from the product side with a view
of providing better range for different needs, We are still at the beginning to this huge
customer ownership and different transition to integrated e-mobility, and there
requirements, and the second from the side of are a lot of investment opportunities available
resources that are required to produce the in the market, to fund the innovations required
batteries and how these batteries are used for to realize the vision of low-cost and
2nd life projects. As the market matures, we environment friendly mobility solutions for the
expect OEMs to find a business opportunity in masses. Governments also have a big role to
battery storage systems which will add play in this transformation, by introducing
efficiencies to the e-mobility ecosystem. regulations that push technological
advancements in the sector and make e-
There are three main factors one needs to look
mobility cheaper than traditional combustion
at in the mobility sector - sharing vs owning,
engines.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
GENDER SMART
Impact Investing with a Gender Lens
From left to right: Julia Profeta Johansson, Founder, ConsciousGrowth & ella impact; Katherine Milligan, Head of Gender &
Diversity, Bamboo Capital Partners; Julia Bewerunge, Associate Vice President, ISS ESG; Hedda Pahlson-Moller, Chief
Catalyst, TIIME; Moderator: Manuela M. Fröhlich, Co-Founder, Fondsfrauen
The business case for gender equality and investing in businesses where they have
women empowerment particularly, lies in the women as representatives in the management
critical role it has played as the driver of and in the board room, or investing in
growth and innovation for the past decade. A businesses that offer products and services
growing body of research shows how gender which help improve lives of girls or women. We
diversity leads to long term value creation, need to understand that a gender lens has a
stability and even greater returns at very broad spectrum and can be applied in a
companies. At the same time ignoring women lot of ways and across asset classes.
as consumers means missing out on one third
To foster a climate of gender investing, we
of the world’s wealth. Gender lens investing is
need to have more diversity within the
a powerful approach to correct that.
investment industry covering all asset classes.
There are multiple ways in which this can be Currently, only 4% of leadership positions in
operationalized, examples include the investment management industry are held
incorporating a gender lens within the by women. From assets under management
investment process by investing in corporates perspective, only 4% of PE assets, 1.5% of
who take care of this issue actively in their hedge funds assets and 2% of mutual fund
operations and in the markets they serve, or assets are managed by female managers.
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
GENDER SMART
Impact Investing with a Gender Lens
“ Gender lens investing gives remarkable productivity, is a performance enhancer and risk
mitigator.
Hedda Pahlson-Moller, Chief Catalyst, TIIME
”
Studies have shown that people relate more look at diversity. There are different entry
with people who are similar to them, in one points for investors to incorporate gender lens
way or the other. To direct more capital in their investments, which not only unlocks
towards women entrepreneurs and to promote economic value in companies, but will also
gender diversity at workplace, we not only help the move towards a more sustainable
need more women in the investment industry, world.
but also need a radical change in the way to
Recommended Reading
https://www.gendersmartinvesting.com/resourcecollections/2020/11/9/gender-
Gender and Climate
and-climate-finance
https://www.gendersmartinvesting.com/resourcecollections/2020/11/9/covid-19-
Gender and Covid
and-gender
Gender lens investing
https://www.gendersmartinvesting.com/gender-lens-investing-in-numbers
in numbers
https://www.2xchallenge.org/criteria
Others
https://hbr.org/2017/05/we-recorded-vcs-conversations-and-analyzed-
how-differently-they-talk-about-female-entrepreneurs
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
SUSTAINABLE AGRICULTURE, BLUE ECONOMY & FOOD
TECH
Disruptions, Improvements and Opportunities
From left to right: Dr. Klaus Kunz, Head of Sustainability & Business Stewardship, Bayer; Moderator: Jonas Aechtner, Project
Manager, WWF Germany; Dr. Dennis Fritsch, Project Coordinator, UNEP FI; Sebastián Popik, Founder & Managing Partner,
Aqua Capital; James Hook, Partner, LeadX Capital Partners, Jos Boeren, Head of Agriculture & Food Investments, Stafford
Capital Partners
Climate risk over the last decade has become Looking at the bigger picture to understand the
one of the biggest concerns for governments challenges faced by the food and agriculture
and investors globally, and it has become sector, we need to produce 50% more food by
more significant and far reaching on a global 20504 to feed the growing population, under
scale. increasing difficult climate conditions and with
diminishing area under farmland and limited
It is well known that no other sector’s interests
ocean stock of fish. But these challenges have
are more closely aligned with the health and
also created opportunities for investors to
stability of our climate than the agriculture and
invest in areas which improve the sustainability
food sector. To give an idea of the magnitude
and resilience of our global production and
of climate risk, annual financial losses from
supply system of food.
natural disasters USD232 billion in 20191, and
more than 50% of the world’s GDP2 is Estimated global investable farmland for
threatened by nature loss and between institutional investors is between USD1.5 - 2
USD235-577 billion3 of annual global food trillion5 and so far, only USD40 billion6 has
production relies on the direct contribution of been invested. There is also a need to
pollinators, exposing us to huge biodiversity increase the fish supply by 58% 7 and this can
risk. only come from aquaculture, since the oceans
are over fished.
1 5
AON (2019) HAIG, Macquarie
2 6
World Economic Forum (2019) Preqin (2020)
3 7
OECD (2019) World Resources Institute (2019)
4
United Nations 2018, 2019, The EU Commission,
University of Sheffield’s Grantham Centre for
Sustainable Futures (2015)
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
SUSTAINABLE AGRICULTURE, BLUE ECONOMY & FOOD
TECH
Disruptions, Improvements and Opportunities
Looking at this sector from investor’s viewpoint transition towards a sustainable way of
there is a lot of room for them here too, as only managing ocean resources. This area is
USD2 billion has been invested out of the seeing increasing recognition amongst
available USD760 billion8. In addition, financial advisors, and it seems very
investment returns in aquaculture are directly convincing for the clients too.
correlated to the level of sustainability
At UNEP FI with the Sustainable Blue
achieved, as it preserves biodiversity in the
Economy Finance Initiative, are currently
oceans.
working on strengthening both aspects by
We need to increase production from existing developing practical guidance for investors,
farmland, increase the production of healthy banks and insurers on how to finance blue
(plant based) foods, and at the same time economy sectors sustainably, as well as
reduce the wastage of food, to be able to meet highlighting best practice and case studies
the growing demand for food. In Europe 22% from industry peers, who are already active in
of food is lost or wasted9 , and this number is this space.
42% in the US, which is very discouraging too.
Going forward, sustainability would no longer
But this can be very impressively turn into a
be a voluntary commitment but is expected to
business strategy where any surplus eatable
become mainstream and become
or beverages are put on resale and in that
systematically embedded in the incentives
way, consumers benefit from a heavy discount
scheme of management. As we move forward,
on their favorite products while solving an
a carbon - neutral company, signed up for
environmental problem. The Blue economy is
science-based targets, and having a close eye
a relatively recent concept and people have
on the supply chain elements in the future and
started realizing how human activities are
how they operate, will become mandatory, and
severely altering two thirds of the Marine
therefore companies who are already on their
environment, adding to the already existing
way to sustainability will be in a better position
triple crisis concerning climate, biodiversity
to manage risks and take advantages of the
loss and pollution. There is a need for change
opportunities arising in the sector.
in our approach to ocean assets, for a
“ The value, growth and scale opportunities in these industries are compelling. However, these
industries are relatively new from a financial institutionalization point of view. Hence, you
observe a relatively slow pace of allocation compared to mature industries like Real Estate or
Infrastructure. Fact is that the number of funds covering this space has been growing
together with the capital allocations. It is expected that more capital will be allocated to this
industry as the ag & food investment industry will be further maturing.
Jos Boeren, Head of Agriculture & Food Investments, Stafford Capital Partners
”
8 9
Estimate Neptune NRCP World Resources Institute (2019)
Sustainable Investor Summit 2020 www.ic-icf.comPANEL DISCUSSION
EMERGING MARKETS
Private Credit as an Impact Lever & Getting Emerging Markets Investments Right
From left to right: Florian Kemmerich, Managing Partner, Bamboo Capital Partners; Simon Gupta, Head of Business
Development, responsibility Investments; Moderator: David Creighton, Chairman, Convergence Blended Finance;
Steffen Klawitter, Director, Finance in Motion; Hannes Manndorff, Managing Director, Österreichische Entwicklungsbank
From a private perspective one has a lot more moment. Secondly, private equity investors
avenues to engage with management and usually work more closely with their clients,
drive change, through board seat on the providing not only financial but also consulting
private equity side or governance on the credit and management services, and thereby
side. The panel discussion was focused on the engaging not only at board and governance
ability of private credit to drive impact, relative level but also on the operational level, which
to private equity. puts them in a better position to drive change.
There were different views among panelists on The argument in favor of private credit is that
the topic, with majority supporting the debt investors can have their risks and
argument that private equity is clearly ahead of objectives addressed in the debt covenants
private credit in driving change, for private and can force the company to adhere to the
equity is more catalytic than private debt. agreed terms and achieve those objectives, by
Firstly, the Covid crisis has put a lot of the enforcing those covenants. additionally, private
companies, where investment was an credit channelled via financial institutions to a
opportunity, already at the solvency limits and large number of beneficiaries is a powerful tool
what they need as of now is equity, which has to achieve systematic change.
made equity the instrument of choice at the
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