Innovations in Sustainable Finance

In this episode, I sit down with Sam Vionnet, the author of Impact Thinking, subtitled “Learn critical thinking skills to make better decisions that create societal value”. The book is based on 15 years of experience in consulting with multinational corporations, NGOs, and investors. Sam reveals that there are a lot of beliefs that don’t stand up to scrutiny. Rather than blindly following numbers and standards, he advocates for a principled approach that, first of all, establishes what should be measured. He presents a step-by-step framework for thinking about impact up and down the value chain and keeping an eye on trade-offs. I think the book is really helpful in assessing impact constructively and fighting greenwashing with intellectual rigor.More about the book here: https://www.valuingnature.ch/post/the-impact-thinking-book

Can you imagine voting yourself on who should sit on the board of a company you are invested in? Perhaps on your cell-phone?  In this episode, I discuss with Georgia Stewart, Co-founder and CEO of Tumelo, how their technology democratizes shareholder voting and explore the opportunities and risks that direct shareholder voting presents in the context of sustainable finance.  Nowadays, shareholder voting is usually delegated to asset managers, raising questions about whether the voice of the ultimate owners is heard. Georgia introduces the concept of “Pass-through Voting,” which allows investors in pooled funds to vote at company AGMs proportionate to their fund ownership. She explains how Tumelo’s technology not only aligns the interests of shareholders and corporations but also increases shareholder participation and engagement. Some of my favorite insights from this episode  Pass-through voting potentially empowers long-term thinking investors to have a say, shifting the voting power from short-term focused asset managers.Even if “Expression on Wish” doesn’t directly empower shareholders to vote, it can increase people’s interest and engagement in financial matters, including saving and investing. While there is a debate about whether “direct democracy” is a good idea in the context of shareholder voting, shareholders have a right to vote that was difficult to realize so far. New technology, such as Tumelo’s, can help realize it. Similar to a representative democracy, interest groups such as NGOs could take the role of parties that provide voting guidance, helping individuals make informed choices.

In this episode, I had a conversation with Philippe van der Beck, who wrote a fascinating paper (work in progress) titled "Flow-driven ESG returns". The paper highlights that investing $1 in sustainable mutual funds can increase the value of green firms by 40 cents. This raises questions about whether ESG investing really has an impact.Philippe explains in detail how he arrived at this statement. He cautions that the impact is limited to the stock price, and it is challenging to say how it affects real outcomes. Nevertheless, it is an intriguing deep dive into how markets and prices move, and how sustainable investing may drive prices and behavior more than the standard models in finance would suggest.

Did you know that the University of St. Gallen in collaboration with Solarify offers the opportunity to invest into solar panels on their gym rooftop? In this episode, I talk to Aurel Schmid, founder of Solarify. Together we dive into the finance and impact behind crowd-founded solar panels and discover how small scale investor can have an impact towards green energy. We find out what makes the solar rooftop project at the University of St. Gallen special and what kind of return and impact investors can expect from it. We conclude with an outlook from Aurel on the current challenges they face and what he wishes to see in the industry.Link to the HSG project: https://solarify.ch/produkt/hsg-sporthalle/

Lena Hörnlein from B-Capital Partners explains the interaction between sustainable finance regulations and their fund focused on energy transition assets. They discuss the criteria for Article 8 classification, challenges in regulating sustainable investments, and the importance of battery storage for grid flexibility.

In this episode, I talk to Christine Chow about active ownership. Christine explains what it is, its dos and dont's, and what investors can bring to the table that companies do not know yet. We explore the tension that the best kind of active ownership is the most difficult to make visible, come up with an idea for professional certification, and Christine explains that being good at engaging is like being good at riding a horse.

Tom Gosling, ESG compensation expert, discusses the effectiveness of linking executive pay to ESG targets, the challenges of setting effective ESG targets, and the benefits and risks of delegating ESG responsibilities on the board. He also explores the broader role of ESG incentives and sustainable investing, emphasizing the need for policy changes.

I talk with Per Einar Ellefsen, CEO and founder of Amundsen IM, a fund that specializes in the European primary equity market. We have a long conversation about the role of ESG factors in the IPO process, from the angle of risk assessment, investment performance, and impact. Along the way, we talk about a lot of interesting companies: Azelis, Verallia, Visma, Eurogroup Laminations, and EDP Renewables. https://amundsen-im.com

Stéphanie Mielnik, an expert in sustainable finance and sustainability-linked bonds, discusses the growth and market pricing of SLBs. They highlight the importance of ambitious targets and criticize easily achievable ones. The chapter also explores the concept of SLBs and the difference between targeting emissions intensity and absolute carbon emissions. Additionally, they discuss the feasibility of achieving further emissions reductions after initial goals are met and analyze the pricing discrepancy of SLBs.

Jan Anton van Zanten, sustainable investing expert at Robeco, discusses the open-source SDG scores that measure companies' sustainability performance. They explore the importance of understanding company impacts, making data open source, and the benefits of an open-source data set. They also address the differentiation between human and machine-based scores and the significance of active ownership in sustainable finance.