Pat Cox, the former President of the European Parliament, wants to join the dots on sustainability and investment.
A former economist turned TV journalist who first entered the European Parliament in 1989, Cox headed the European Parliament from 2002–2004.
He is still very much plugged into the European project via his role overseeing the Scandinavian-Mediterranean Corridor, a key north-south transport axis comprising road, rail and shipping links.
He’s also very much at the business end of sustainability via his role on the board at French tyre giant Michelin where he chairs its CSR committee and looks after its submissions to the CDP.
Other responsibilities include an EU monitoring mission in Ukraine and the presidency of the Jean Monnet Foundation for Europe.
But his latest assignment is close to his heart. He has taken an ambassadorial position to help promote Ireland’s newly renamed International Sustainability and Investment Centre (ISI Centre).
This government-backed unit, renamed from the Green IFSC earlier this year, was originally formed in 2011 to accelerate the positioning of Ireland as a global leader of sustainable investment.
The ISI Centre – tagline: “capital working for sustainability” – aims to be what its chair John Mullins of Amarenco Solar describes as Ireland’s green chamber of commerce.
According to the Centre, some $35bn of environmental funds are “managed, deployed or serviced” from Ireland. Ireland has four signatories to the United Nations-supported Principles for Responsible Investment. Its only asset owner signatory is the Ireland Strategic Investment Fund (ISIF), the re-jigged National Pension Reserve Fund.
It all comes as Ireland is co-chairing with Kenya the United Nations process for developing the Sustainable Development Goals, the successor project to the Millennium Development Goals (MDGs).
It was in this context that RI caught up with Cox at the third ‘Sustainability Gathering’, which he chairs, at Dublin Castle recently. He cited the example of Denmark, which has a clear target of being 100% fossil free by 2050, saying: “You need a message that is an anchor, a driver and a motivator.”Cox, who has himself just had a zero emissions house built, sees a role for Ireland as a ‘connector of finance’: “We should be telling more of our story.”
Turning to his role at Michelin, Cox is enthusiastic about the effectiveness of the CDP reporting process. The Clermont-Ferrand-based firm has just completed its latest submission. He speaks of the virtuous circle it can generate within the company’s huge supply chain.
But he is equally engaged in his European transport role. “How do you green a port?” he asks rhetorically, before going on to explain about quayside sodium dioxide detectors and plug in renewable energy sources for when ferries are in port. Cox said there was a multi-billion-euro investment requirement for the Scandinavian-Mediterranean Corridor he oversees, and said the private sector could be “indispensible”. Asked whether there was a potential role here for green bonds, Cox said the scope was “massive”.
Cox explained that the night before we met, Citigroup CEO Michael Corbat had been honoured at a reception for the bank’s contribution to sustainability – specifically its $100bn, 10-year commitment to climate finance. The award also noted Citi’s role in the Green Bond Principles, and Cox particularly noted the role played by Michael Eckhart, the bank’s Global Head of Environmental Finance and Sustainability.
Thinking more broadly, Cox said he saw a role for Ireland to bring sustainability to Africa, given its missionary legacy and lack of colonial baggage: ”I’d like to connect the dots on this,” he says.
One factor in Ireland’s favour is that it is a small state that can be nimble in its approach. A potential area that is being very much talked about at the moment is how to adapt the country’s aircraft leasing model for renewables finance.
Ireland is the world leader in aircraft and aircraft engine leasing, controlling around half of the world market. It is exploring how it can leverage this know-how into renewables. Market sources in Dublin explained it would mostly focus on solar photovoltaic and energy storage – where installations are relatively transportable, unlike wind turbines. The example given was for, say, a Spanish energy firm to lease a solar PV array in Morocco. The arrangement would mean that it would stay off the balance sheet and register as an expense.
Aircraft leasing grew almost by accident in Ireland
following the collapse of Guinness Peat Aviation (GPA), which not only indirectly led to the formation of low-cost carrier Ryanair but seeded a whole industry as GPA executives went on to found numerous firms in the sector, aided by a favourable corporate tax environment.
The ISI Centre is tasked with promoting Ireland to the world to “raise awareness of our nation’s unique skills in managing, servicing and deploying funds investing in sustainable industries”. RI asked Cox about how would he know when the ISI Centre was a success. It’s too soon to say, he said: “We’ve not had a discussion about KPIs [key performance indicators].”
“Ultimately, this year’s Sustainability Gathering aims to facilitate transactions that will steer capital towards investments that are environmentally, socially and financially sustainable in terms of their return,” Cox says.“Dublin is emerging as a hub for environmental finance by attracting green-focused asset managers, replicating its previous success attracting sectors such as aviation aircraft leasing and ICT,” Cox wrote in a newspaper article ahead of the event.
A feature of the event itself was how the US tech giants that have set up in Ireland such as Apple, Amazon and Facebook are increasingly demanding renewable energy for their data centres.
Indeed, there were calls for the success of IDA Ireland, the agency responsible for industrial development in Ireland, to be replicated in cleantech.
Richard Nourse, Managing Partner at environmental investment house Greencoat Capital, which runs the €200m NovusModus fund for electricity utility ESB, explained succinctly why it opts for Ireland: “You speak English, you’re in the right timezone and there’s a favourable tax and regulatory regime!” Pat Cox is vey much part of Ireland’s efforts to join the dots on sustainable finance.