As the date for Finextra’s annual Sustainable Finance Live conference approaches, we engaged with several speakers who will participate in this pivotal event at Events@No6 in London on October 10, 2023. Richard Conway, CEO of ElastaCloud, offered his perspectives on the emerging trends within the sustainable finance sector and provided a preview of his upcoming session.
The Sustainable Finance Live conference will convene industry leaders and experts to discuss the development and implementation of sustainable strategies aimed at promoting environmental stewardship and addressing climate change issues. Conway is set to deliver a workshop titled “What is a financial institution’s role in managing and measuring the climate transition when financing sustainable cities?”
In discussing active strategies to mitigate climate change, Conway highlighted various approaches including impact investing, ESG footprint portfolios, nature-based exchanges, and green bonds. Despite these innovative solutions, he cautioned that many are still in experimental stages, with outcomes often obscured by the potential for greenwashing.
On the proliferation of ESG frameworks and the need for alignment with sustainability initiatives, Conway remarked: “ESG frameworks provide a broad basis for comparing corporate entities across industries, yet new regulations will impose penalties on institutions failing to demonstrate clear, effective investments that reduce their carbon footprint. The current methodologies do not fully account for the true costs associated with carbon offsets.”
He further explained, “While frameworks like TCFD may offer an accurate depiction of a company’s emissions, the discretion involved in offset choices can render this reporting ineffective, as it may misrepresent the true cost of carbon offsets. Corporate entities are still expected to uphold their responsibilities as environmental stewards, which is not always guaranteed. Though initiatives like CSRD enhance reporting and auditing efforts, significant gaps remain.”
Conway emphasized the essential role of artificial intelligence and data analytics in enhancing transparency and establishing benchmarks for sustainable reporting. These tools can help identify organizations that are genuinely committed to sustainability.
On the topic of the costs associated with sustainability and green products—especially for smaller, emerging businesses—Conway asserted that all ventures entail risk. With diligent planning and determination, sustainability can be both achievable and essential in today’s environmental landscape.
He underscored the obligation of financial institutions to chart a clear course toward Net Zero, facilitating transparency for partners to assess their carbon footprints accurately. Organizations should critically evaluate their investments in firms that lack defined milestones or commitment to sustainability.
Discussing the convergence of green energy and financing for sustainable urban development—central themes of Sustainable Finance Live 2023—Conway noted: “It is crucial to have a clear understanding of what constitutes green energy. Simply consuming green energy while claiming carbon neutrality is insufficient. The supply of green energy is currently inadequate to meet global demand, and relying on Power Purchase Agreements (PPAs) can create a false sense of security.”
He urged the financial sector to increase investments in renewable energy sources, even in high-risk ventures that could reduce storage costs associated with solar, wind, or tidal energy, while acknowledging that cautious approaches are no longer viable as we exceed 1.5 degrees of warming since pre-industrial times.
Looking to the future of sustainable finance, Conway forecasted a trend toward greater investment in agricultural initiatives and improved scrutiny of companies that lack transparency in their carbon reduction efforts and may engage in greenwashing.
When asked what he anticipates most at this year’s Sustainable Finance Live, Conway expressed his enthusiasm for networking with such a diverse group of attendees.
For those interested in delving deeper into sustainable finance strategies, find out more about registering for Finextra’s Sustainable Finance Live conference on October 10, 2023.