The RI New York 2019 conference kicked off today (Dec 4) with a series of high-level interventions that outlined the challenges, but underlined the action that is taking place around regulation and new disruptive sustainable business models.
In a keynote video message, the UN’s Deputy Secretary General, Amina Mohammed (CK) said that despite growing awareness that sustainability issues both affect financial returns and are impacted by them, the world is not moving fast enough on the United Nations Sustainable Development Goals (SDGs) that could ensure long-term, sustainable growth.
She urged investors and the conference and those beyond to act, stressing that the “time is running short”.
In a keynote address, Tensie Whelan, Clinical Professor of Business and Society, Director, Center for Sustainable Business at NYU Stern School of Business, said its research showed that the so-called ‘green gap’ of consumers talking but not buying sustainable wasn’t born out by five years of data. The data, she said, show that sustainable products are ‘outgrowing’ non-sustainable products, albeit from a lower base, leading to a revolution in related new-tech business launches.
Whelan said sustainability factors were now clear business drivers, but that investors need to push for data to underpin this. She said shareholders must ask corporate CFOs for the financial metrics on sustainability.
In another keynote address, Alain Deckers, Head of Unit, Corporate Reporting, Audit and Credit Rating Agencies at DG FISMA said sustainability was now its biggest finance work stream and that disclosure and transparency of corporates and investors were at the “core” of this work.
Agreement, he said, on the EU’s green taxonomy – which aims to cover what can be described as green business/finance, and what not – a key plank of the EU’s Action Plan on sustainable finance currently in negotiation – aims to be ratified before the year end.
Speaking from a US perspective, however, Kirsty Jenkinson, Director of Sustainable Investment and Stewardship Strategies at Californian pension giant CalSTRS, said that the EU’s sustainability push was “not yet translating to the US at all”.
Jenkinson was speaking on a plenary looking at how regulators are driving sustainable finance.
She pointed to “dark spots” in US sustainable finance policy such as the Department of Labor’s flip-flopping on fiduciary duty and ESG, the SEC’s attack on proxy advisors and shareholder rights, and the roll back of environmental standards by the EPA.
However, she said a recent conference on climate change hosted by the Federal Reserve Bank of San Francisco was a rare and encouraging “light spot”.
Other panellists noted that the global nature of finance meant that US investors would soon be aware of the EU’s Action Plan because they have investment business in Europe and for European clients.
In another keynote, Abigail Disney, granddaughter of Disney co-founder Roy Disney, challenged the orthodoxy of the shareholder primacy model, as famously articulated by Milton Friedman, saying that business was unable to deal with “slow catastrophes” such as climate change: “I don’t entirely blame CEOs for this: no one has the power to buck the system, or to act like a cuddly puppy in public and then Cruella de Vil in private or for shareholders.
How would we do things differently if we looked at all investment being ‘impact’.
The first order of business would be to “do no harm”.