Investment in sustainable finance has an increasingly specific regulatory framework. The European Commission is advancing in this field since it began the action plan in 2018 to redirect capital flows towards the improvement of society and the planet, manage the financial risks derived from the climate emergency and social problems and promote maximum transparency and long-term responsible vision in financial and economic activities.
To continue promoting sustainable investing, less than a month ago, the European Commission presented a new package of measures, which it expects to apply from January 2024. It includes new rules for environmental, social and governance (ESG) rating providers ), so that companies wishing to invest in their transition towards sustainability can do so with greater guarantees.
Despite the increase in ESG investment, which currently reaches 25%, the steps that are being taken are still insufficient to achieve the Sustainable Development Goals (SDG) established by the United Nations. In this context, the experts consider it essential that, in addition to having an adequate regulatory framework, more advice is given on sustainable finance in order to make the business and investor community aware of its advantages, as they insisted in the Encuentros en la Vanguardia session. , which had the collaboration of Acciona and was held under the title “Sustainable finance: the great opportunity”.
The round table, which was held on Tuesday, June 27 at Espacio 23 in Madrid and could be followed both in person and by streaming through the website of this newspaper, included interventions by the director of projects and Agenda 2030 in Pacto United Nations World Cup, Javier Molero; the member of the Finresp executive committee, Antonio Romero; the general director of Spainsif, Andrea González; and the director of Development and Strategic Projects of Bestinver, Federico García Guillén.
“The global commitment to sustainability implies a transfer of investment and a relocation towards projects aligned with the objectives that we have set for ourselves, including a carbon-neutral model in the year 2050,” said García Guillén. Acciona, the group of which this investment manager is a part, has the will to “lead this change” with its commitment to sustainable finance, including renewable energy, highlighted García Guillén, whose firm manages assets of more than 5,000 million of euros.
The director of projects and the 2030 Agenda at the United Nations Global Compact, Javier Molero, warned that “we are at a critical moment” that requires the promotion of initiatives that allow the Sustainable Development Goals (SDG) to be met.
In many of its areas of action, including the fight against poverty or the climate emergency, not only is progress not being made, but rather backwards. “Hunger is on the rise, as are greenhouse gas emissions,” lamented Molero. With less than eight years to go until 2030, recalled the director of projects and the 2030 Agenda at the United Nations Global Compact, “the growth of sustainable finance can accelerate the necessary transformation.”
Andrea González, general director of the non-profit association Spainsif, which brings together more than a hundred actors in the sector -among them financial entities and insurers, service providers, universities and unions-, also points out the “evolution” that she observes in sustainable finance towards greater “democratization”, in the sense that there is an increasing number of sustainable financial products that are adapted to each investor based on a “suitability test” after analyzing their preferences for profitability and risk.
In the opinion of Andrea González, the European regulator is a “pioneer” since it contemplates not only investment in projects that are already sustainable but also financing the transition of many companies towards a new model.
Helping the productive fabric is key for Antonio Romero, member of the Center for Sustainable and Responsible Finance of Spain (Finresp). Finresp’s objective is to encourage the sustainability strategies of small and medium-sized companies, trying to offer useful solutions that facilitate the transition. Currently, work is underway on a pilot project with Cepyme to offer SMEs in six specific sectors an assessment of their environmental, social and corporate governance parameters that help them determine their position compared to other comparable companies.
Antonio Romero considers that the European action plan that began in 2018 marked a “turning point”, from which “the financial sector is a key instrument to channel the necessary investments” to achieve the sustainability objectives. “The taxonomy is a consensus on what is sustainable or not, which builds confidence in the regulatory framework that protects the investor,” he added.
Advice is the main recommendation that experts make both to investors who decide on sustainable finance and to companies that choose to achieve this type of financing. Companies must “prepare to order their sustainability strategy” in order to comply with “new directives”, explained Javier Molero. The three most imminent, he highlighted, are life diligence, to identify its social and environmental impacts and implement measures to mitigate them; that of information on sustainability, which Javier Molero described as “very relevant”, because it will force organizations to report the same indicators in their sustainability report, which will allow criteria to be unified; as well as that related to the so-called ‘greenwashing’ or ‘eco-laundering’ to avoid false marketing so that your information is based on scientific verification. “Sustainable finances are an economic opportunity, but also a social one and for the planet”, he assured.
“Sustainability must be taken into account, also in the consumption of financial products,” claimed the general director of Spainsif, Andrea González, who also advocates “being an activist” since currently “products are designed ad hoc for each operation.”
“Let’s bet on the projects with the greatest transforming impact,” González urged. We must achieve “a just transition that will not compromise the prosperity we have achieved, but rather will increase it in the long term,” said Finresp’s executive committee member, Antonio Romero.
“The company that is capable of leading a transformation will attract more investment flows,” predicted the director of Development and Strategic Projects at Bestinver. Federico Garcia Guillen. Although the current difficulty that experts currently encounter, especially on issues related to governance, lies in “having comparable information between companies,” warned García Guillén.
Despite this, the Bestinver executive confirmed that “giant steps are being taken”. “Sustainability is an inexorable challenge that requires financing and presents great opportunities for companies and investors”, was the “optimistic” message with which the director of Development and Strategic Projects at Bestinver decided to conclude his intervention in the debate.
