Month: August 2024

Sofidel

On the topic of finance increasingly in step with the ecological transition, Soft&Green wanted to listen to the voice of Francesco Bicciato, Director of the Forum for Sustainable Finance.

Finance plays an important role in the green transition because, when it is sustainable, it contributes to a more responsible and inclusive society. When did your association start and how does it operate?

The Forum for Sustainable Finance is a nonprofit association established in 2001. The membership base is multi-stakeholder. It includes financial operators and other organizations interested in the environmental and social impact of investments. The Forum’s mission is to promote the knowledge and practice of sustainable investing, with the goal of spreading the inclusion of environmental, social and governance (ESG) criteria in financial products and processes.

The Forum’s activities are divided into three main areas: Research, Projects and Relations with Institutions. 
Through its work, the Association has been instrumental in bringing the issues of sustainable finance to the attention of institutions, financial operators, non-financial organizations, and citizens. Thanks to both advocacy initiatives and ongoing work on the financial education front, awareness and interest in the sector have greatly increased. The Forum has also produced open knowledge about the field through intensive research work, with some 50 publications on the subject freely accessible online. The Forum’s vocation is to try to recognize in advance complex economic and financial dynamics and phenomena and how they may impact environmental and social variables.

When did people start talking about responsible finance and what kind of difficulties did financial actors have in obtaining effective measurement tools/metrics?

In the first study of the SRI (Sustainable and Responsible Investment) market in Europe conducted in 2003, Italy accounted for 0.1 percent of the European market with €240 million in assets, referring only to institutional investors. The situation today is very different. At European level, according to Morningstar’s findings, there has been an increase from less than 400 billion open-end funds and sustainable ETFs (Exchange Traded Funds that allow investors to manage risks associated with environmental, social and governance factors) in 2017 to about 2.5 trillion in 2022. The topic of metrics has been and still is an important challenge because measuring the results of an investment is critical. While we are further along on the environmental front with respect to the social dimension, there is more work to be done, starting with accelerating dialogue at European level to approve a social taxonomy.

From your privileged vantage point, what is the current situation of sustainable finance in Italy and, more generally, in Europe and the world?

The focus on sustainability has greatly increased in recent years, and ambitious climate and environmental goals have been set at European and international levels. ESG finance is growing in importance precisely because it makes a key contribution to achieving these goals toward more sustainable development models. Indeed, sustainable investments are key to building a society that is low-emission, keeping global warming below 2°, and socially inclusive. An interesting ongoing trend is the growth of green bonds. In 2022, green bond issues accounted for more than half of all sustainable bonds issued in the same year (58%, $487.1 billion). After demonstrating resilience in a turbulent economic environment, green bond issuances in the first half of 2023 increased by 22.2% over issuances in the same period of 2022, arriving at $351.9 billion. As predicted by the Climate Bonds Initiative, green bonds have returned to growth and could reach the ambitious level of $5 trillion a year starting in 2025. This data points out two important elements. On the one hand, it highlights the markets’ interest in investments with environmental sustainability goals. On the other hand, it is also an indicator of investor interest in financial products with a high level of transparency. In fact, in green bonds, the use of proceeds is tied to specific projects and reported regularly. Although reporting standards are currently voluntary, they are widespread and it has been observed that their adoption is rewarded by the market. This phenomenon brings us to the second ongoing trend: the increasing demand for data from institutions and investors. Companies, including SMEs, will need to increasingly engage on the reporting front, both to attract investments – data is key to composing sustainable portfolios – and to meet increasingly stringent European transparency requirements.

According to the findings that emerged in 2022 from the “Italian SMEs and the Green Transition: ESG Profiles and Sustainable Finance” research conducted by the Forum and in which 415 SMEs participated, sustainability plays an “extremely important” or “very important” role in the company, driving strategic and investment choices, for over 45% of SMEs. However, with respect to the level of knowledge and practical application of ESG aspects, there still remains significant room for improvement. About 40% of the companies surveyed do not know how to estimate the extent of their exposure to climate risks, and only 17% have approached banks for financing related to sustainability projects.

More and more organizations are claiming that they have embarked on a path toward sustainability even from the point of view of financial investments. This is a positive fact that however raises some doubts about the veracity of what they are claiming. How high is the risk of greenwashing?

As interest in environmental, social and governance sustainability has grown, so as the risk of greenwashing. This term refers to a particular behavior that consists of presenting a company’s products, goals and/or policies as environmentally friendly in the face of actions that contradict said image.

As ESMA, the European Securities and Markets Authority, also notes, greenwashing harms investors who want to allocate their resources to sustainable economic activities. In addition, it amounts to an actual practice of unfair competition, penalizing companies committed to a real path of sustainability. More generally, it is the market’s credibility that loses out. Both companies that incur greenwashing and the financial players that support them expose themselves to three categories of risk: reputational, legal, and financial.

In 2022, the Forum presented a paper dedicated to greenwashing containing an analysis of the phenomenon and a set of guidelines to prevent it. It was the result of a working group on the subject conducted with our members. Going forward, we expect increased awareness of sustainability issues among savers, investors, and businesses and a growing commitment by asset managers to more transparent investments.

Read more about topics related to environmental and social sustainability, themes and projects close to us in terms of culture and corporate modus operandi on our Soft&Green blog.

Through its funding priorities in education and workforce, KeyBank Foundation has committed a $300,000 community impact grant payable over three years as an investment in Urban Arts, a national nonprofit organization located in New York City that teaches video game design to historically underserved youth as a pathway to college and career. They provide students with a comprehensive curriculum in the art and technology of game design through computer science, coding, animation, music and storytelling. They also offer top-tier college access and scholarships services, and connect alumni to mentorship and internship opportunities at leading corporations, generating a new and diverse talent pipeline.

“Urban Arts’ mission aligns with our commitment to support organizations and programs that prepare individuals for thriving futures,“ says John Manginelli, Market President for KeyBank’s Hudson Valley & Metro NY market. “They are transforming lives and cultivating next-up talent nationwide, and we are proud to support their efforts.”

Urban Arts teaches STEM and STEAM through digital game design, a novel approach that

boosts persistence in the computer sciences for youth from low-income communities,generates technically expert and creatively confident youth ready for college and career, andensures a more equitable future economy.

When students make their own video game, they actually learn high-level computer science literacy—multiple programming languages, animation, sound production, digital art, story-telling—as well as collaboration and leadership, skills necessary for all future jobs. “There is no other organization that offers programs that allow you to not only explore what you’re passionate about—the arts, such as video games—on top of things that are more technical or skill-based like programming and music production. You truly get the best of both worlds and it’s really flexible,” says Sydney E. an Urban Arts game designer and current rising sophomore at Barnard College.

According to the Bureau of Labor Statistics, careers in computer and information technology are projected to grow 11% from 2019 to 2029, faster than the average for all occupations. Still, women and people of color are grossly underrepresented in the creative tech workforce and beyond across nearly all industries. “At Urban Arts, we imagine a world where young people gain economic mobility through meaningful careers as creators, thinkers and leaders in the creative and technology fields,” says Philip Courtney, CEO of Urban Arts.

Urban Arts is generating a new diverse talent pipeline in three distinct steps.

They offer a multi-year STEM education program in schools nationwide and at their Learning Lab in New York City. Game On, their custom high school college curriculum, has just been endorsed by the College Board.Their college access program enrolls 100% of Urban Arts’ seniors into college. They’ve earned $25M in scholarships since 2017.Further, Urban Arts connects their alumni to mentorships and internships at leading companies, generating exposure and access to the world of work.

“KeyBank has long maintained a focus on college attainment, and through KeyBank Foundation we partner with nonprofit organizations that are moving the needle in college enrollment and retention rates for underserved students,” says Manginelli. “We want young people to achieve the skills, education and capabilities they need to succeed in current and future employment opportunities.” Manginelli went on to say, “At KeyBank, we prize a culture where diversity is valued and inclusion is fostered, and we seek partners, like Urban Arts, who bring innovative programs and approaches that solve a community need.”

KeyBank Foundation grants are part of a $40 billion commitment for lending and investments across Key’s national footprint established in 2017 and supporting affordable housing and community development projects, home, and small business lending in low- and-moderate income communities, and philanthropic efforts targeted toward education, workforce development, and safe, vital neighborhoods.

Urban Arts is grateful for KeyBank Foundations’ investment in their transformational outcomes. Together, the two organizations are helping to build a powerful, creative, and inclusive future.

For more information on Urban Arts, visit www.UrbanArts.org

For more Information on KeyBank Foundation, visit www.Key.com/Foundation.

How does Baker Tilly spark fresh thinking and light the fire of innovation? By creating an environment that inspires team members to break barriers fearlessly.

In its second year, Baker Tilly’s Innovation Ignite program is generating that spark. This program has expanded from focusing on early-career professionals to including team members with a mixture of experience levels, unlocking opportunities across our firm.

“Last year was a resounding success,” said Kristen Russell, managing director of Strategy and Innovation. “This year, we aimed to build on that by diversifying our participants and expanding opportunities for growth, learning, and challenging themselves and their colleagues.”

Leaning into Expertise, Learning, and New Experiences

Innovation Ignite is a dynamic, experiential development program that allows team members to enhance their innovation and problem-solving skills, work on real business opportunities, and build relationships across our firm.

To date, 120 people have participated in Innovation Ignite, ranging from senior managers and directors to early-career professionals, leveraging the power of blended expertise for this round.

“The Ignite program provided a unique opportunity for each of us,” said Brian Metuge, senior manager in Assurance. “We acquired new skills and new ways of thinking about innovation and how to approach problems.”

Participants spent an intensive week together in our Innovation Lab in the Madison, Wisconsin office, where they could bounce ideas off each other and dedicate focused time to their projects.

“My current role is very execution-oriented, where I put my head down and work through assigned tasks,” said Will Nummy, an analyst in R/E Valuation on the DCA Real Estate Advisory team. “The week was very refreshing as our work was idea-focused.”

“We had time to ‘camp out’ in the problem and were encouraged not to rush to solutions,” said Grant Tidmore, senior manager of Resource Management. “That is precisely what I will bring back to my teams and day-to-day work.”

Ignite teaches how to bring innovation into our everyday work, as an essential skill that can translate across our firm and client work.

“I liked how each session helped to guide and build on the ideas in working toward a solution to a real problem our clients face,” added Natalie Cole, an associate in Tax.

At the end of the program, our Innovation Board was on hand to hear presentations and witness the ideas and innovation generated throughout the week.

Principal Nuwandi Trahan, who sits on our Innovation Board, emphasized the career-building effect of learning these skills and the power of seeing the resulting ideas taken seriously.

“We need to push them to do what they love doing, what we know they’re capable of doing, what they’re good at, and what they are excited about,” said Nuwandi. “When they are excited, they have the initiative. You’re not forcing them but rather giving them the opportunity to succeed, and that will trickle down to great client work.”

Limitless

The after-effects of Innovation Ignite paint a positive picture of how participants bring their newfound innovation mindsets with them after their experience. Team members saw the power in our firm’s investment in their future, sharing increased confidence in encouraging colleagues to engage in innovative efforts and knowing they can articulate how innovation plays a role in their industry.

“I loved Ignite,” said Sylvia Dyke, senior manager in Assurance. “I feel so much more connected to the firm after this experience and so much more supported now that I know we have so many dedicated professionals advocating for a better Baker Tilly.”

It’s clear: the opportunity to innovate is all around. Sometimes, you just need a spark to see how far you can go.

“Our future as a firm is limitless,” added Kristen.

Learn more about how Baker Tilly is fostering a culture of innovation.

Originally published by the National Association of Manufacturers

If you ask Henkel how it managed to cut its worldwide carbon footprint in half a few years ago, its leaders will gladly let you in on the secret: there isn’t one.

The impressive reduction is down to common sense and good old-fashioned effort.

Click here to read more from this interview between Pernille Lind Olsen, President of Henkel North America, and the National Association of Manufacturers.