Investment in sustainable finance has an increasingly specific regulatory framework. The European Commission has been making progress in this area since in 2018 it launched the action plan to redirect capital flows towards the improvement of society and the planet, manage the financial risks arising from the climate emergency and social problems and promote maximum transparency and long-term responsible vision in financial and economic activities.
To continue encouraging sustainable investment, 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 of governance (ASG), so that companies that want to invest in their transition towards sustainability can do so with more guarantees.
Despite the increase in ESG investment, which currently reaches 25%, the steps being taken are still insufficient to achieve the Sustainable Development Goals (SDGs) 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 to make its advantages known to the business and investment community, as they insisted in the session of Meetings at La Vanguardia, which had the collaboration of Acciona and was held under the title "Sustainable finance: the great opportunity".
At the round table, which took place on Tuesday June 27 at Espai 23 in Madrid and could be followed in person and by streaming through the website of this newspaper, the Director of Projects and Agenda took part 2030 of the United Nations Global Compact, Javier Molero; the member of the executive committee of Finresp, 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 reallocation towards projects aligned with the objectives we have set ourselves, among which there is a carbon neutral model in 2050", highlighted García Guillén . Acciona, the group of which this investment manager is a part, wants to "lead this change" with its commitment to sustainable finance, which includes renewable energies, García Guillén emphasized. The firm manages assets of more than 5,000 million euros.
The Director of Projects and Agenda 2030 of the United Nations Global Compact, Javier Molero, warned that "we are at a critical moment" that needs the impetus of initiatives that allow the Sustainable Development Goals (ODS) to be met.
In many of its areas of action, including the fight against poverty or the climate emergency, not only is it not progressing, but it is going backwards. "Hunger is increasing, as are greenhouse gas emissions," lamented Molero. Just under eight years before 2030, recalled the director of projects and Agenda 2030 of 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 players in the sector - including financial institutions and insurers, service providers, universities and unions -, also points out, the "evolution" he observes in sustainable finance towards a more important "democratization", in the sense that there is an increasing number of sustainable financial products that are adapted to each investor based on a "test of suitability” after analyzing their return and risk preferences.
According to Andrea González, the European regulator is a "pioneer" since it establishes not only the investment in projects that are already sustainable, but also the financing of the transition of many companies towards a new model.
Helping the productive fabric is key for Antonio Romero, member of the Sustainable and Responsible Finance Center of Spain (Finresp). The aim of Finresp is to encourage the sustainability strategies of small and medium-sized companies by trying to offer useful solutions that facilitate their transition. We are currently working on a pilot project with Cepyme to offer SMEs in six specific sectors an assessment of their environmental, social and corporate governance parameters to help them know 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 goals . "The taxonomy is a consensus on what is sustainable or not, which generates confidence in the regulatory framework that protects the investor", he added.
Advice is the main recommendation given by experts both to investors who decide on sustainable finance and to companies that choose to obtain this type of financing. Companies must "prepare to organize their sustainability strategy" in order to comply with "new directives", explained Javier Molero.
The three most imminent, he emphasized, are life diligence, to identify its social and environmental impacts and apply measures to mitigate them; that of information on sustainability, which Javier Molero described as "very relevant", because it will oblige organizations to report the same indicators in their sustainability report, which will allow unifying criteria; and also the one related to the so-called green image washing, or ecoposturing, to avoid false marketing so that its information is based on scientific verifications. "Sustainable finance is an economic opportunity, but also a social one and for the planet", he stressed.
"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 hoc for each operation”.
"We bet on the projects with the most transformative impact", urged González. We must achieve "a fair transition that will not compromise the prosperity we have achieved, but will increase it in the long term", assured Finresp executive committee member Antonio Romero.
"The company that is able to lead a transformation will attract more investment flows", predicted Bestinver's director of development and strategic projects, Federico García Guillén. Although the difficulty that experts are currently facing, especially in matters related to governance, lies in the fact of "having comparable information between companies", warned García Guillén.
Despite this, the manager of Bestinver noted that "giant steps are being taken". "Sustainability is an inexorable challenge that requires funding and presents great opportunities for companies and investors", was the "optimistic" message with which the director of development and strategic projects of Bestinver decided to conclude his intervention in the debate.
