Uninformed investors will continue to invest little so there is a real need to educate institutional investors.
Image by Helene Li
Words by illana adamson
Helene is one of the top 5 global Sustainable Finance Influencers (Onalytica) and top 15 in Asia Women in Fintech. She is the general manager of the Fintech Association of Hong Kong and the co-founder of GoImpact Capital Partners, a platform developed to accelerate the mainstreaming of Sustainable Investments that has forged partnerships with the likes of Temasek Foundation, the United Nations Development Programme (UNDP), The Financial Times and Bloomberg. Prior to joining Fintech Association of Hong Kong, Li held leadership positions at BNP Paribas Wealth Management, JP Morgan Private Bank, and Swiss wealth management firm Lombard Odier. She is a sought-after speaker and moderator at fintech and sustainable finance forums.
Helene and I sat down in May 2021 to discuss the opportunities in impact investment and the evolution of ESG – The following transcript is from our conversation:
Illana: Helene, can you give us in layman terms, the introduction to impact investment and ESG, please?
Helene: There is a divide between the Global North and South, a wealth divide that Covid really highlighted. We have all got used to a lifestyle that we can ill afford so we need to find a way to deal with it. How will it effect our future was not an issue that we through properly. Impact investment aims to redress those divisions. ESG stands for Environment Social and Governance and requires reporting on all 3 points. As great a framework as the UN SDG’s are, we need an intersectional lens to drive this forward. First and foremost it is a human and planetary agenda so we need a mindset shift and behavioural change towards circular, nature based solutions. Ultimately investing in nature is the solution! So, investment needs to look not just at ROI but impact as well. We all need to come together for that to create co-investment opportunities and sovereign wealth funds.These are great opportunities for investors as well.
Illana: Yes, let's talk about investors. We speak of the paradigm shift in behaviour for a sustainable future, what is the role of investors in this trajectory?
Helene: Investors are very important in the ecosystem, channelling the investment into the places where the money is needed. But, uninformed investors will continue to invest little, so there is a real need to educate institutional investors. Really, investor education is at the heart of this, you cannot expect the investor to pause and understand ESG, it is complex. Board and C-Suite education is really the core because you cannot motivate people unless they are informed. Tackling this is a key part of the building blocks.
Illana: You and I have been in the sustainability space for a long-time and we are now witnessing a sharp increase in motivation for all things sustainable, across the board. Can you speak to that?
Helene: The recent “tsunami” of Sustainable Finance is much more than just a knee-jerk reaction to the pandemic. But there are still huge gaps to be filled before it is truly adopted and mainstreamed. There is a real urgency to move from the talk to the walk, from discussion to action! But we first need to understand: how do I measure it? Benchmark it? How to I compare apples to oranges (different types of organisational data sets)?
Currently, there are two strong tailwinds for the shift:
1 - Investor demand - for an ESG lens integrated into their portfolio
2 - The regulators
For instance, Green Finance is fast becoming the location objective for Hong Kong. But overall, the push needs to be bottom up and top down. In large corporates it needs to come from C-Suite so that the incentive or momentum comes from the top down. But when it comes to mobilising capital, it needs to be a bottom-up approach as these are precisely the people that need benefit from it. We have had more sustainability theatrics in the recent past than sustainability actions and initiative. It is not enough to do sustainability for optics. It more important than that it is about lives and the planet so it really calls for a bleeding heart and a cool head. There is no point in making it binary, we need both in sync.
Illana: There is still a resistance to impact investment as mainstream. Is this the perceived cost associated to doing good?
Helene: My personal view is that I do not believe that you have to sacrifice performance to achieve financial impact. Every investment is a trade off in one way or another but that in itself doesn't translate into sacrificing return in the end
Illana: There is a lack of universal standards for measuring the ESG markers, which causes problems in comparing the quantifiable data to disclose the carbon or water footprints for instance. Can you talk about this a little?
Helene: Yes, the metrics are still missing to effectively measure or provide a benchmark against which we can compare different organisations and we need to be able to compare apples to oranges. There are interesting movements though, looking at what the financial reporting standards for any big firm should be. Both the IFRS and the SSB are looking at how to standardise reporting globally across different industry. This is really important as more stringent disclosures will really help us to compare the data and make better decisions about each organisations credibility. This will take a while to implement, and it cannot just be an academic or think tank debate it needs to include the investment community too.
Nordic Investors have been at it for a long time, so they have a strong measurement criterion for particular investments in their portfolio.
Illana: My penultimate question, Helene – Did sustainability choose you, or did you choose sustainability?
Helene: I think it chose me. My experience made me well placed to navigate this topic and I think I chose the agenda in many ways. Staying with a multinational investment firm is riding on the shoulders of giants and it is safe. But I choose to adapt to the urgency of the issue. There were gaps in the market so I started GoImpact. I thought I could contribute by using my network and skillset from years as a banker and management consultant to integrate into business.
Illana: Finally, Helene – Can you give your thoughts to the next generation?
Helene: Yes, education on sustainability at a younger level is absolutely critical, we need to understand how to create better leaders of the future. Gen Z and Millennials are far more acutely aware of these issues but also digital natives have a lot more access to info at their tip fingers. We want to leave the world better for our children but we need to leave better children for the world too.
Illana: Helene, thank you for taking the time to sit down with me, we have had an audience of 250+ people in the room so it really shows the appetite for this unfiltered sustainability information and steering. Do you have any closing words?
Helene: I am speechless! I thought I was going to have an informal chat with my friend, it ended up being a brilliant conversation and we need to have it more. Thank you Illana and everyone who came along.
*This interview was conducted on Clubhouse, and though we had other questions from the audience, we did not include in this article because permission was not requested.
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