About this ATALK
Join us for an insightful panel discussion from APLANET Summit 2023 titled «Navigating ESG Trends & Legislation».
Our panel of experts unpack the multifaceted nature of Environmental, Social, and Governance (ESG) criteria in the financial industry, providing insights into the complexities of sustainability reporting, regulations, education, and communication.
In this discussion, they delve into various key topics:
🔹𝗧𝗵𝗲 𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝗰𝗲 𝗼𝗳 𝗔𝗰𝗰𝘂𝗿𝗮𝘁𝗲 𝗗𝗮𝘁𝗮: Unearthing the challenges that companies encounter in gathering and communicating reliable, insightful data.
🔹𝗛𝗮𝗿𝗺𝗼𝗻𝗶𝘇𝗶𝗻𝗴 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱𝘀: Offering insights on how reporting standards can provide a more cohesive view of a company’s sustainability performance.
🔹𝗧𝗵𝗲 𝗥𝗼𝗹𝗲 𝗼𝗳 𝗘𝗱𝘂𝗰𝗮𝘁𝗶𝗼𝗻: Exploring the significance of the education sector in enhancing understanding and implementation of sustainability and its regulations in the financial industry.
🔹𝗘𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗘𝗦𝗚 𝗥𝗮𝘁𝗶𝗻𝗴𝘀: Discussing the role of ESG ratings and other innovative ways of communicating sustainability efforts and progress to stakeholders.
🔹𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗶𝗻𝗴 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗲𝘀: Dissecting the key elements to consider when developing and implementing a sustainability strategy within a company.
These conversations are critical in the current financial industry landscape that is grappling with the urgency of sustainability.
This panel offers essential insights and engaging discussions, beneficial to finance professionals, sustainability practitioners, or anyone interested in ESG and sustainable finance. The distinguished panelists include:
– Martin Nichols, CFA, Regional Sustainability Relationship Manager at S&P Global Ratings
– Alicia Rubí, CFA, IFRS FSA Credential, GCB.D, Sustainability Partner, Strategy and Transactions at EY
– Ricardo Pedraz González, SCR, Sustainable Finance at Afi
– Carlos Barrientos Lostau, Head of Sustainability Strategy at CaixaBank
Transcript
You can find the full transcript of their conversation below.
| Andrés Cardona | Ladies and gentlemen, welcome to our Sustainable Finance panel. As the world evolves and sustainability becomes increasingly a challenge for companies, the European Union has developed several legal requirements for companies such as CSRD, SFRD or Taxonomy, and all of those have been put in like a high tide on companies. Right now, we have 4 great panelists with a vast experience in sustainable and ESG. Alicia Rubí Sustainability partners strategy and transactions at EY Spain. Alicia has a background in private markets and ESG Consultancy. She has been instrumental in advising clients on ESG inform Business strategy. Ricardo Pedraz is a sustainable and public finance consultant at AFI. Martin Nichols is responsible for Spanish and Portuguese clients and ESU outreach at SMP Global, is that correct? SMP Global Ratings, SMP Global. And Carlos Barrientos is a senior banker with over 25 years of experience. Right now he is the Head of Sustainability Strategy at Caixabank. Welcome and welcome to our panel. We’ll begin with a general question for all of our panelists and then we will follow with a question for each one of you. Based on your experience, what do you see as the biggest challenge companies face in implementing the new legal requirements and how they can overcome these requirements? Alicia will be with you. |
| Alicia Rubí | Thank you, Andrés, for inviting me. It’s a pleasure and an honor to be here again this year. You know, I work with small companies, small and medium sized enterprises as they’re called SMES in English, pymes in Spanish. And it it these these rules, these new regulations that you’ve mentioned are equally applicable to many of them, right? So these companies do not have the resources of publicly traded corporations. They are, you know, struggling to just get by on a daytoday basis and they nonetheless have the obligation to produce this data and report it and it must be correct, right? So that is the struggle, right? What is your temperature? We all have a temperature. But if we don’t have a thermometer, we don’t, we don’t have a thermometer, we don’t know what our temperature is, right. So that’s the problem with these companies, right, that they do have a carbon footprint, right. But they don’t know how to, they don’t know where to begin, right. So it requires a lot of education first of all it’s a compliance issue, right? So they are actually you know falling afoul of the law if they don’t quickly get up to speed that they must find an advisor to hire them and that’s also a challenge right? How do they find a reliable advisor. So it we are in a moment of turmoil actually for a for companies of all sizes but but especially for smaller ones. I think it was AD that said before 600 data points that are need to be reported under the Corporate Sustainability Reporting Directive. That in Spain captures corporations whether they’re private or public that have 250 employees or more and and and certain revenue hurdles as well. But that’s the challenge right is to have a management’s ability to spend time on this reporting obligation because it’s not voluntary it’s it’s obligatory. While they’re still trying to run their companies and manage them and manage them. So I so as I said at the moment of turmoil a moment of transition a moment of sort of like digitalization was before it’s do or die you there it’s it’s not if it’s when and how and and and your ability a company’s ability to manage this requirement that management of the legal and regulatory environment is reporting as well, right. So and then once you’ve actually gone through the exercise, you’ve come into compliance with the law and you’ve produced the data that must be reported to as we’ve spoke as our panelists mentioned in the previous panel managed that data to improve corporate performance and manage the impacts both positive and negative that your company is producing, right. So companies because they’re providing goods and services, they’re providing positive impacts and but they’re also producing negative impacts. So this data helps them to understand that, identify it and be able to manage it. |
| Martin Nichols | Yeah. No, I completely agree with Alicia and I think you’ve almost covered it at all and the previous panel as well. I mean, I think you know if we look at SFDR which applies to investors and funds, you know, investors and funds have a challenge and to get comparable data across the companies that they invest into. Comparable data that is calculated in a consistent way and so that that may not be a challenge for some of the companies that they invest into. But guessing that across the full spectrum, especially the smaller cap spectrum is a challenge and then maybe to say you know something other than data, I think data is always the answer when asked about challenges in the sustainable finance space, I think the cost of implementation, Okay? So the cost for asset managers to build out teams and with the right level of expertise and to be able to do this type of analysis. And so where do those costs go? Do they get passed on to the end users, to the individuals buying into these funds? And also the question of competitiveness, you know, the smaller investors and asset managers, how can they absorb the costs involved in this in the same way that the larger ones can and does that create challenges in terms of barriers to entry, etc. So I think that’s the additional challenge that I would add. |
| Ricardo Pedraz | OK, Thanks My turn. Thanks for inviting me. I will take the point from Martin about investors is the thing I think I must talk about here about this SFDR. Yeah. When we talk about SFDR for investors, it’s a really big issue. Yeah, there’s a whole amount of data that is needed to report in advance and exposed also. And we need to handle it. You need technology to handle it. And it’s important. Yeah. But another important issue is product development. Yeah, it’s not easy. I mean we were used few years ago to talk about best in class investment strategies, all the kind of sustainability related strategies for investors. But it’s over. Yeah, more or less it’s over I would say. Yeah, not completely. But now we are all the time talking about Article 8, Article 9, maybe Carlos might say something about that. As this is the new regulation, we need to get used to it. We need to understand it and it’s a challenge. Yeah, for product development is really, it’s not easy, it’s not as straightforward as it was before you were you have open minded and you were able to develop your own products. Now you need to fix them into the regulation. And it’s not easy in this way. Yeah. So at this point in order to develop a good investment product or investment fund according to SFDR would strongly recommend to understand a key issue, sustainability, because it is all about it. You need data, you need technology, but you need to understand what sustainability about which are the key topics, which are the materiality topics for each kind of company in order to assess as an investor to those companies which are the key issues and the strategies they need to follow. So if they are good ones, you will invest on them. So this is the new point of view that the regulations is providing to all of us as investors according to this regulation. I think it’s an important step. |
| Carlos Barrientos | My turn. Thank you again. I’m taking it from. Yes, with regard to product development in our case basically investment investment funds, some mutual funds articulate at nine other relation coming from SFDR that we need to also do this reporting on it adverse impacts and that’s a really a tough theme but also other regulation and and I will get back to the data and basically to reporting and to and to do the disclosure. But this comes from CSRD at mentioned 600 we can more than 1000 in our case. So also depends on the time of the type of the company, the size of the company and how deep you need to get into into that gathering it from our internal systems which requires lots of efforts and investment because at the end you know at least for us we have been always investing in having a strong financial data set, but our aim is to have a ESG data set which is as robust as the financial data set and for these you know it’s lots of investment too that is required. Also with regards to the Due Diligence Directive and this is going to make us also look into the data from our suppliers and the value chain for us is. Those are partners with which we develop products but on the industry and the manufacturing industry it’s all the suppliers chain that you need to look into and also to bring that information into your reporting. So it’s interesting. |
| Andrés | Yeah it’s quite a challenge since companies right now to actually make the transition into sustainability, they need to touch their business model, they need to rethink what they’re doing into a more sustainable way. So on top of that you need to incorporate all of these new legislations, all of these new sets and all of these new parameters. So it’s it’s quite a tasks that especially small and medium companies have ahead. So I now want to to go with you Alicia with your expertise. In impact weighted accounting and how do you think this approach can be incorporated into the new legislation, into the end in this framework for them to improve the transparency and effectiveness of sustainability disclosures? |
| Alicia | OK, well that’s a big question and there’s not an answer yet, but the good news is that there is a consensus in the market that impact must be measured. And it must be a metrics reliable and standardized impact metrics are important and it to the extent that it’s possible to monetize those impact metrics, there is a great interest in the investor community in being able to do that right. So we talked before about the SFDR, and SFDR is of one of the legislative obligations under SFDR for certain financial products is producing a list of what’s called the principal adverse impacts and these are indicators of a environmental, social, governance topics right and and a metric related to them and the idea is that once you’ve measured it, then you can try to improve that number, right. So, so that’s now obligatory for certain entities, right, well, certain investors to look at that in the investments that they make. Be aware of the impacts positive and negative that are being produced with that money. But the impact weighted accounts, so that’s what you asked me about earlier. The impact weighted accounts is a very interesting impact methodology that was a born at Harvard Business School in 2019, so George Seraphim who is a prize winning at Harvard Business School Professor came up with this idea and it was it received a lot of interest, right? So at the Global Steering Group on impact investment in the year 2020, it decided to run a pilot project around the impact weighted accounts initiative and I was involved in that. So I was a part of a voluntary group that took the impact weighted accounts methodology to a interested investors and interested issuers and a convince them to run a trial project both investors doing it and issuers doing it and that trial project was a great success that they that each one of these experiments validates the hypothesis that there that there’s something there this methodology to monetize impacts, it makes sense and it makes sense for issuers that are issuers that are companies, right, that are are making these impacts. And as I said before, some of when you are producing goods and services that are purchased in the market, that’s because you’re making a positive impact or else people wouldn’t be buying your goods and services, but those are produced with negative impacts, right? So measure them all have a holistic balance of the pause from a monetized perspective, money is something that we can all understand, right? So in 2022, a Harvard Business School actually spin off the impact weighted accounts methodology into a standalone foundation and this foundation has the support of the accounting industry. I work now at EY, which is I work in the consulting arm of EY, but EY is an accounting firm. EY is one of the sponsors of the Impact Weighted Accounts Initiative, which is now housed in the International Foundation for Valuing Impacts. Right. So they… This foundation exists because governments want just like SFDR. This is a law produced by the European Union to identify and put a value on impacts, right. So that the G7 has decided together that this is something that the governments themselves want to know, and issuers and investors agree that there needs to be a consensus methodology for valuing. And monetizing, valuing them in terms of monetary terms of impacts. So as I said before, I was very happy to arrive at EY and find that there are teams that are working on impact weighted methodology, not as volunteers, but to make money with it, right? So at EY, there is a team in Europe that is working with it and valuing valuation and modeling that we do this for clients that pay us to do that, right? There’s a team in the United States doing it and there’s a team in Japan doing it. So we’re getting there, right? You know, the firms like EY do not spend time all over the world on this unless they believe that there’s a value to it. And as I said, if people are paying you for service, it’s because they see a value in it as well. So we’re getting there. |
| Andrés | Amazing. That’s one of the things that we always say that at the end, money is the blood of companies. So we need to keep that blood floating. So yeah, it’s correct. Ricardo, how do you think the new legislations will influence the way financial market participants advise their clients on sustainable investment options? And what role do you see blended between finance playing in this context? |
| Ricardo | Okay, this tribulation is mainly about transparency disclosure. Yeah, we were not used to get information about the ESG issues, sustainability issues from corporates. Now it’s more or less compulsory, said at the beginning. And it’s a main topic for most of the companies, yeah. This regulation helps all of us to organize the information, yeah. So it’s a big key point. But I could add the second one. Yeah, which is it’s really good for clients in make us as clients also a chance to make comparability better and an easier way to compare different products, to compare different companies, to compare performances, yeah. So at the end, if you are providing an organized way, this kind of data, the regulation request, it’s a really good issue for clients. It’s true that it’s a whole amount of information which is being provided for everybody, also for clients and we need to take time to get used to it. Yeah, it’s now we are beginning with the process, I’m sure in a few years we will be ready to take advantage of the data and organize it in a proper way. So at the end, it will make a really good step forward for the for the financial agents. Yeah. And the clients to select a proper investment according to the goals, according to the consideration of sustainability because before it was much difficult. Yeah. So I’d really encouraged us to go deeper into this regulation, which is going to be a big step forward for the financial industry, I guess. |
| Andrés | Yeah, I guess for companies for example, like APLANET, once we were able to, we are able to gather as much information as we can from our clients and we get like this huge data lake. I’m quite sure that we’re going to be able to start creating what you’re what you’re saying in a way it’s create benchmarks, you know, like creating benchmarks for companies to make comparable decisions. And to make investment decisions or any ESG decisions that we need to make in the future, Okay. Thank you very much for your answer. Martin, from your perspective, from your perspective at SMP Global Ratings, how do you think that this legislation are affecting the ESG ratings landscape and what are the implications for companies seeking to access sustainable finance markets? |
| Martin | Yes, I think in terms of the impact on the ESG ratings landscape. You know, if you look at it positively, you know, you would like to think that the ESG rating landscape would become more more streamlined. Okay, which a lot of people would be, would be very happy with. I mean, I think one of the shortcomings which is flagged at the ESG rating space is that there’s many different providers of ESG ratings and each with the different methodologies, which produces a lack of correlation in terms of the final outcomes. So that makes it very difficult for the market and for investors to compare across different companies. And so you would certainly think that as investors are using a common framework for their reporting of sustainability and their sustainability practices, they will start to focus on specific ESG Data points, ESG Information points, which will drive the ESG Ratings providers to also incorporate and focus upon the same points because the end users of ESG Ratings or there’s many end users of ESG ratings, but one of the largest is the investors essentially so you could look at it a different way, but that’s a positive view I think and a positive impact that will take place on the ESG rating space. In terms of access to the sustainable finance markets, I think that we will continue to see growth in second party opinions, so independent opinions around a specific sustainable loan or a sustainable bond to demonstrate the sustainability credentials of that particular financing. So if there was a second party opinion on Ed and his football skills, it would transparently show that there were no football skills there. And so I think that is what I think was the growth in second party opinions, but I also think the detail and analysis within the second party opinions will increase further as well. So it won’t necessarily just be about alignment to the principles of sustainable finance, it will be about how the activities contribute to a low carbon future, how they correspond to the Paris Climate Agreement and if they align to the EU Taxonomy and all of that information will make it easier for investors to implement their responsibilities under SFDR, fund classification, reporting, etc. So I think they’re the two, the two main impacts we’d see. |
| Andrés | Amazing. I think it’s a great challenge for companies to harmonize all of this information and be able to disclose it to either regulators, financial institutions or ratings, agencies. So yeah, quite a task we have ahead. Carlos now with you. With your experience in risk management, how do you see the role of risk management evolving in the context of sustainable finance and what challenges do you foresee for financial institutions in integrating ESG risks into their risks management practices? |
| Carlos | Okay. I mean we easy risks and it can be classified into a physical risk and transition risks. We are exposed to those and they are part of our own credit risk. So we need to look into the profile of our customers and clients and see how the performing in ESG affects us positively or negatively. So and and the ECB particularly with its expectations on managing climate risk, you know with 313 expectations. And we need to develop a plan, an action plan in order to address all the topics that they consider. And we are doing reasonably good. Other thing, yes, we need to incorporate that into the admission of the risk proposals. But also in the monitoring and this we need to also monitor the portfolio and particularly, for example, with the with our target in the carbonization. So you know when we launch and set out the carbonization targets, we also need to track on the performing that our clients are doing on their own, the carbonization pathways. So we need also and we are doing it’s analyzing what carbon footprint with specific transaction add on into the portfolio in order to monitor that and see if we are progressing towards our own target now. But these need to be looked into the business model, not only for financial institutions, but also these at the end could turn into reputational risks coming from controversies. So we also need to look into how the company’s performing in terms of ESG in in general terms, now only environmental topic, but also social topics, governance. We see controversies in companies because of our governance, a lack of governance or for example, greenwashing. You know? In my opinion greenwashing could come more on a unwanted way. It’s not that you’re looking I mean to do advertising or doing a more communication or disclosing more about your activity even though I mean we also could refrain from communicating things just because of the lack of standards and sometimes you face towards investors that could look at you saying but how come you have this sustainable multiplication finance target when your colleagues or your peers are having higher, higher higher numbers and we say okay we are taking conservative approach. So when we look into avoiding those greenwashing teams but also in we need to be keep up on the market at what our companies or pieces are doing. |
| Andrés | Yeah, I understand one of the things that we’ve discussed and I also discussed with Vanessa Peloche who’s around is one of the biggest challenges that companies have is to gather actual and real insightful data. Real data, but the next step is to communicate those things. So communicating is super important in all of the sustainability efforts. And you said something that I’m sure we’re going to address in the next panel is how companies should and can manage their supply chain because that’s really important for all of this, for all of this to be successful actually. Yeah, OK Alicia now with you as Colette of the FSA Club for Western Europe and as associate matter expert for the Value Reporting Foundation, how do you think this legislation can be harmonized with other ESG reporting standards to minimize reporting borden and provide a more cohesive view of company sustainability performance? |
| Alicia | OK, so good question and again another challenge to global markets and global regulators, and global standards setters, right. So the FSA that you mentioned is the fundamentals of sustainability accounting credential. It is issued by a SASBI which has now been absorbed by the International Sustainability Standards Board. So as its name implies, a Standards Board. A company when it reports its revenues, reports it to accounting standards. And a company, when it reports its carbon footprint, to do so correctly, must follow certain standards. So the reason that the International Sustainability Standards Board exists is to provide a standard for everyone to produce the information in a standardized manner and for that information. And then investors or other users of the data can use this information and and reliably right they they believe the information and it’s it’s it’s comparable because everyone is reporting it in the same way. And it is decision useful information because otherwise why ask anyone to produce this information, right? So, investors as one user of information are very interested in standardized disclosures for the same reason that they demand accounting standards so that they can compare one company against the next with financial metrics and financial ratios, sustainability data is also a A now a reported in metrics right? And we call those KPI’s key performance indicators of perhaps a energy efficiency. So that might be a the amount of energy that a company consumes divided by its revenues, right. So that’s that. How much energy do you need to consume to provide to generate a euro of revenue or €1,000,000 of revenue, right. So, now the issue of international comparability, right, so we have the international Sustainability Standards Board that exists to provide globally a set of standards that companies around the world can report to, but these are not obligatory by law. They may be incorporated into a local securities exchanges’ own rules, right? So the SEC decides what a or the New York Stock Exchange decides what are the rules for issuers on its exchange. In Madrid, La Comision Nacional del Mercado de Valores and the BME which operates the exchanges in Spain, they set the rules for the disclosure the companies must give to be able to issue their securities on these exchanges. Right? So what happens is that in Europe, we are privileged to have the EU who is the leader globally on the sustainability agenda and it has its own agenda and it is less interested in a global disclosures when it has its own local needs right so that that you it is a global leader in in setting a a a long term. Economic growth plan for the EU, that’s the Green Deal. And all these regulations that we’ve been talking about before, the EU taxonomy, SFDR, CSRD, these are all a sort of the road marks along the way to help us all get to the objectives of a sustainable economy with long term economic growth resting Europe, right? So this is a long answer to your question, Andrés, but the reality is that we are still a long way off. And when you talk to a international regulators that for example the international IASCO which is is is the association for securities exchanges globally, they make recommendations to local exchanges that to harmonize that the requirements to issue on on all these exchanges but they are wary to encourage governments to legislate that that ISSB standards, right? So until there is enough investor pressure because that’s where it’s going to happen, it becomes soft law, right. So it’s not a law, but investors expect companies to make certain reporting a disclosures and they vote with their feet, right? So no one forces them to buy a security. No one, no one forced them to do that. And many of them have explicit policies that they will tell everyone that if you do not make disclosures on certain sustainability topics, you are excluded from my investable universe, right? So. That’s an example of market consensus that is driven by SASBI and the ISSB, but not because there’s any obligation, legal obligation to do so. So I think it’s a question of “what will become a market consensus” and that may not be necessarily a legal obligation. |
| Andrés | Understood. Thank you very much for your answer, Ricardo, as a professor of sustainable finance. How do you think education sector can contribute to a better understanding and implementation of the legislation requirements among professionals in the financial industry? |
| Ricardo | OK, yes, I’m part of the Afi School of Finance providing training, so on unsustainable finance. But it happened, I would say four or five years ago. I might say that 6-8 years ago, the sustainability topic was not a big topic for most of us. Some of people who are here, I’m sure they were already struggling with the topic. Yeah, and now is one of the key topics in the agenda almost for everybody. At least you need to understand something. You might not be an expert. You might need to collect data but not handle it. You might be you might have a need to hire an SPO provider. I mean, but you need to understand this issue. Yeah. And there’s not enough experts. You need to make those people who are in the company’s financial sector or the corporates their own experts. You need to train them and that’s a key issue because at the end it’s not something that need to be handled by the four or five people. No, no, it’s an issue for everybody. Sometimes the whole day will deal with it, yeah, But most of the time it won’t. But you need to understand it. You need to understand sustainability. You need to understand what’s a sustainable finance product. You need to understand regulation. You need to understand the whole amount of innovation on this topic, as Alicia said, we’re just evolving all the time new standards, new tools, new proposals, new ideas, new services. I mean, you need to train yourself or you need to get some training. Yeah, because you need to be on the wave. Yeah, because this is not a fashion issue. It is a main issue as other ones in finance, other ones in incorporates development as technology, as also regulation. Sustainability is a key issue too. So you need to get your people, your staff, train it and education is a must. It’s a milestone. Sustainability now another topic. Not the only one, but another one. |
| Andrés | Yeah, this is a powerful message for companies that they need to start training their stuff into sustainability matters and sustainability topics. That’s absolutely important right now. OK, Martin, how can companies effectively communicatetheir sustainability efforts and progress under the new legislations to their key ESG stakeholders? And what role do you think ESG ratings can play in facilitating this communication? |
| Martin | Yeah, I’ll be, I’ll be quick to keep us on track but I think our clients tell us that ESG ratings and 2nd party opinions for that matter are a key tool for them in communicating to the ESG stakeholders okay. But beyond that, investors engage directly with the companies as well and they have their own specific set of questions for that particular sector or company. And so it’s not the only tool that they use. And then there’s a number of different ways that companies can communicate and address those points that investors raise specifically to them. One of the areas we’re seeing a lot of interest and it relates partly to some of the comments made in the first panel around net zero transition plans, Okay and how investors are able to assess these. So we’ve had conversations with investors and companies where they are seeking a specific independent opinion around a company’s transition plan, Okay. So is it sufficiently ambitious How does it align with the Paris climate agreement, What’s the governance that sits behind that? What’s the policies that sit behind that to give additional transparency specifically on that theme, the climate theme within the whole landscape of ESG. So I think, well, the point that I’m trying to make is that I think ESG ratings will definitely serve a role in terms of the external communication. But I think we’ll see more innovation around that to address specific factors within ESG that maybe don’t come out so prominently in the overall ESG rating itself. |
| Andrés | Thank you very much. Carlos, finally, as Head of Sustainability Strategy, what are the key elements that companies should consider when developing a sustainability strategy and how can they ensure effective implementation and reporting on their progress? |
| Carlos | Well, I mean either you have a sustainability strategy already in place that you need to update or you’re working on build up a one, But if you have already one you. I mean it’s been said before you cannot stop. You need to keep on moving because if not this gentleman and ladies are going to be looking at you looking to your peers see if you have done more or not and that is going to affect clearly your your ratings and your scores on sustainability. So and that you know I think it would start with. First getting the knowledge of the challenges that are affecting your company, your sector in terms of stability. Also looking into you know having a conscious knowledge of the moment and the assist, the assist of the company. You know what is our my real situation and only situation to start working up on that now. Define the sustainability strategy in our thoughts I think it’s… It should be a combination of a to double approach, a top down approach from the management of the company, but also a bottom up approach. Because this bottom up approach would make that the teams and the different departments and units are really engaged and involved and they would feel the owners of the different initiatives that the company is putting in place in order to develop the strategy part of this, for example, in our case, we asked the teams not also not only to put in place initiatives but also. What resources they would need in order to put these initiatives in place. Mostly all of them came out with training, easy training. So that has come to be one of our first priorities during last year in terms of training all around the bank, specific specialist training, but also general training we did one couple years ago that was obligatory and mandatory for all the for all the staff. That would affect their own bonus. So not doing that training would affect their variable remuneration and we’ll have another one this year. So that’s that also look into the business from the innovation point of view trying to as you got it was saying before designing and developing products with an ESG view. That would need to bring in information coming from taxonomy. We need to then report on that and I don’t know I’m, I could go on and on, but I’m aware that we are out of time. So thank you very much. |
| Andrés | No, thank you, and one key thing that you said and I think it’s super important not only for the panel but for the companies who are for the people who’s here and the and the people who are watching the stream. We need to move the incentives in order to people be actually take action. You know? So what you said this training is tied to your bonus so and and and you can replicate the same analogy to all of the the market. Thank you for all the panelists for joining us today. This was quite an insightful conversation. I really enjoyed it and I’m looking forward to seeing you in the next APLANET Summit. |
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