Sustainable & Responsible Capital Markets Forum

Over 125 delegates gathered on 17 September in Paris for the third Sustainable & Responsible Capital Markets Forum.

The conference opened with a clear message from the OECD’s Adrian Blundell-Wignall, Special Adviser to the Secretary-General on Financial Markets and Director, Directorate for Financial and Enterprise Affairs; government policy should play a central role in how capital is mobilised for clean energy investment. Policy conditions are not quite right he said, with factors such as fossil fuel subsidies, procurement advantages for SOEs and tax issues acting as a barrier to the free flow of investment. As fossil fuels will remain the energy fuel of choice, we need a price on carbon. As such, he concluded that governments and investors still have a lot to do. This was followed by a keynote interview with Erik Jan van Bergen, Chief Investment Officer of ACTIAM. He emphasised that collective engagement is required for them to reach their message across the value chain more effectively.  Policy incentives are needed for green bonds to make it a level playing field, he urged. Dialogue with service providers and NGOs is key.

Speakers throughout the day highlighted the important role of the private sector in financing new technologies and research and development to make the market more efficient. They also reiterated the need for a supportive environment to do so. A new debate on stranded financial assets looked at the problem of the market in general and carbon extracting companies in particular, basing asset valuations on assumptions that are not sustainable. The panellists debated whether this is a case of market failure, what regulatory responses might be appropriate, and whether it called for total withdrawal of investor funds from the sector or better engagement with the affected companies.

Panellists also touched on several aspects of the bond market’s response to socially responsible investment, including the differences between green and socially responsible investments, the extent to which the green bond principles can be adapted for socially responsible bonds, the implications of social outcomes being more difficult to quantify and more subjective than carbon emissions, and different investor approaches. Corporate issuers also took their turn to comment on how they are tackling ESG challenges. 

In the final panel of the day, speakers discussed why green and socially responsible bond issuance for municipalities and regions is below that in the US and for other sectors in Europe. In the cases of North-Rhine Westphalia and Ile de France, the panellists explained the motivations for tapping this market sector for issuers with strong access to regular markets, and with a different group of stakeholders from private sector issuers. They also discussed market reactions to the mixing of green and socially responsible assets, investor requirements with regards to certification, and internal benefits of these transactions for their respective organisations.

Euromoney would like to thank all sponsors and speakers for making the third Sustainable & Responsible Capital Markets Forum such a resounding success once again. We look forward to seeing you again next year.

Thu 17 Sep 2015

InterContinental Paris Le Grand, Paris