Commentary: $500 Billion Is Meaningfully Important, but Insufficient
Over the last five issues, we have detailed the elements of the INTEGRATE 5-Pillar rCFO Framework. (For reference, the framework is somewhat similar to, and can be mapped against, the TCDF 4-Pillar Framework.) Our charter at INTEGRATE is to synthesize the best work of others in the ESG arena — to look at the problems and the resultant opportunities on a global scale and to bring these best practices to you, the CFO.
The “r” in rCFO stands for regenerative. We use “regenerative” instead of “sustainable” — but not because sustainability is bad. Far from it. Sustainability has been our starting point, and we have made great initial strides over the past 20 years since the advent of the UN’s Millennium Goals. Now, we need to move beyond to become net-positive to nature and society. Regeneration can accomplish this. In each rCFO Brief issue, we highlight the most regenerative innovations, CFOs, and investors in the Global ESG space. Our goal at INTEGRATE is to bring ESG best practices to light so you do not need to do the research. With the work and help of the industry’s best minds, we help you get to regenerative practice.
Evidence of this is in the $500 billion commitment made by the 60 companies that are members of the UNGC’s CFO Task Force (see below). Kudos to these organizations. This is certainly meaningful and important, but we need more like 10 times that amount over the next decade to make the impact we need to see — not only in climate change, but also in the overall biodiverse ecosystem. Although we applaud the current administration's efforts and initiatives towards this end, it is the private sector in partnership with the public that is necessary to make this happen at scale. The engine of ESG innovation is business, in a balanced-stakeholder model, that will be the force for good for humanity. And, one of the best ways to assist from the public sector side is to incentivize innovation through capital gain tax policy. Set the incentives directly, but broadly, and then let the marketplace select the best innovations that will scale over time. It is this type of conversation, education, and collaboration that rCFOs will need to embrace to meet the moment and, ultimately, succeed.
To learn more about how to become a regenerative finance organization and move capital towards ESG innovation at scale, please join us at the VIRTUALINTEGRATE21 Conference November 8-10. (Just a month away!)
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Speakers at the INTEGRATE21 conference include Robert Jackson, Former Commissioner of the Securities and Exchange Commission, who will provide information about the latest changes on climate change declaration and other coming requirements at the SEC, and Scott Mather, EVP and CIO of PIMCO, who will give an update on how the UNGC CFO Taskforce for the SDGs is progressing.
Join us (virtually) in November for INTEGRATE21, the leading conference dedicated exclusively to equipping you with actionable insights to lead the transition to regenerative finance. See the agenda and register today!
There are 60-plus CFOs who are members of the UNGC CFO task force. In total, they have committed to $500 billion in SDG-aligned investments, and further committed that 50% of all investments will be related to sustainability. If successful, such a global movement of finance chiefs and their corporations could potentially mobilize trillions of investment dollars annually in support of the Sustainable Development Goals—in areas such as sustainable infrastructure, renewable energy, water, health, food and agriculture, gender, and decent work.
“With this commitment we set a necessary milestone on a journey which began in December 2019 when a small group of CFOs started working together toward a vision of boosting the integration of sustainability within business operations,” said Alberto De Paoli, CFO of Enel and Co-Chair of CFO Taskforce who spoke during the event announcing these commitments “Now, we aim to increase awareness even further and help create the necessary environment to attract more capital towards sustainable development.”
Insights
From United Nations Global Impact | Dozens of CFOs recently announced a commitment to invest more than $500 billion toward Sustainable Development Goals. Investing
From Principles for Responsible Investment | In this statement, the PRI sets out six key aspects of the Corporate Sustainability Reporting Directive (CRSD) proposal. Co-legislators should take this statement into consideration to align the CSRD with the EU sustainable finance strategy and enable investors to actively contribute to the EU’s high ambition for a green recovery, emission-reduction targets of at least 55% by 2030 ,and carbon neutrality by 2050. Decisioning and Reporting
From Yahoo Finance | More than 20 financial players in Quebec representing over $900 billion in assets under management recently teamed up to unveil a Statement by the Quebec Financial Centre for a Sustainable Finance. “This statement, a first in North America, aims to affirm Quebec's historic leadership in sustainable finance and to position financial institutions and their commitment to sustainable finance and ESG principles.”Investing
From The Economic Times | Business leaders should integrate ESG into their firm’s DNA, this article says. “It is high time we moved away from the perception that investments in areas of environmental and social impact might be counterintuitive to a corporation's purpose of maximizing shareholder returns. Various studies have proved that today’s investors have a laser-sharp focus on ESG performance of companies because firms that prioritize ESG performance fare far better in the stock market.” Investing
From Fortune | It’s time to set a global ESG standard for investors, Oliver Bäte and Hiro Mizuno write in this article. “For investors to get behind businesses that are serious about reducing their carbon footprint, slowing biodiversity loss, and advancing a regenerative economy, they need reliable data and tools to differentiate between virtue signaling and real impact. A key obstacle facing these investors is the lack of meaningful and comparable data, based on a global standard for corporate ESG reporting.”Reporting
From Forbes | “Experiencing the effects of a global issue on a personal level inspired Robyn O’Brien to investigate the reasons behind it — and that research eventually led to a movement to invest billions in regenerative agriculture practices and fuel the transition to a more resilient supply chain and a healthier planet.” This article highlights how rePlant is making a $2 billion commitment in this one area. Investing
From Responsible Investor | Recent reports on green finance and ESG from from OECD could inform the upcoming roadmap from the G20 Sustainable Finance Working Group. “Robert Patalano, Acting Head of Division at the OECD’s Financial Markets Division … says a key point of the report was to question how far ESG could be a credible part of greening the financial system.” Investing
After witnessing the attacks on New York’s World Trade Center, something shifted in Robert and it was not long before he retired from trading to pursue a meaningful career with human connection. He identified early on working in institutional sales that family offices were underserved by most investment banks and there was a strong appetite for impact. Over the next 10 years, Robert built equity capital markets and international equities divisions at boutique investment banks, serving impact investors globally and participating in more than 200 private placements and public offerings. In 2014, having built a trusted network, Robert founded ICV to connect family offices and institutional investors in collaborative and safe environments to evaluate opportunities that create a social impact beyond a financial return. Since its founding, ICV has hosted 30 invitation-only events around the world; ICV leads 12 nonprofit initiatives focused on health, inner and outer peace, global security, gender equality, education, sustainable communities, Indigenous peoples, and planet regeneration; and, ICV is a general partner of two health care-focused investment funds.
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Up & Coming Events
See most of the U.S. environmental finance events in this one place.
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