The International Sustainable Finance Centre of Excellence hosted its sixth annual Climate Finance Week Ireland in Dublin on 20-24 November. The 2023 edition was a great success with over 10,000 industry leaders, stakeholders and policymakers, in the area of sustainable finance attending remotely or in person.
On the afternoon of Tuesday, 21 November, Maples and Calder (Ireland) LLP hosted an event on the theme of 'Innovation in Sustainable Funds and Asset Management' with industry leaders and practitioners from Ireland's asset management, finance and corporate sectors in attendance.
Panel discussions were moderated by Ian Conlon and Deirdre McIlevnna from the firm's Funds & Investment Management practice. Also in attendance were members of the firm's Irish ESG Advisory team and representatives from Funds & Investment Management, Finance, Regulatory, and other practice groups.
This note summarises the three key themes from the panel discussions:
Trust & Transparency
- Enhanced transparency is sought by industry and especially by investors.
- Greater transparency is being provided by the European Commission (EC) which is driving forward with the implementation of its European Green Deal.
- EC measures introduced in recent years such as the Sustainable Finance Disclosures Regulation (SFDR) and taxonomy-related product disclosure requirements provide a strong foundation for a transparent and reliable framework for ESG ratings.
- However, regulation needs to be an evolving process. Simply put, greater transparency will lead to greater trust and ultimately buy-in for investors.
- The introduction of new products is enabling financing from the widest possible range of investors. The market for transition finance and impact investing strategies is evolving rapidly, as global demand increases and regulation advances.
- From green and sustainable deposits, blended finance initiatives, sustainability linked loans and sustainable supply chain financing, more creative and innovative sustainable financing strategies are being introduced to fund environmental and social impact projects.
- Sustainable finance will play an important role in supporting a just and inclusive transition but on-going financial innovation is critical.
- There is genuine appetite across industry for collaboration, to work in tandem towards achieving our net zero ambitions. Engagement (and greater investment) in high carbon intensive businesses and sectors, to assist in their transition, will be key to this acceleration.
- The area of sustainable finance is likely to accelerate sharply in response to growing demand from all stakeholders including issuers, asset managers and investors.
- Assets in European sustainable-focused funds has exceeded €5 trillion. Further to our recent research, over 40% of all new funds established in the European Union are seeking categorisation as either Article 8 or Article 9 funds. This is the direction of travel going forward.
- Businesses seeking funding are having to adapt and are now actively competing for finance. If they wish to attract investment from Article 8 or Article 9 funds, they will need to demonstrate their ESG credentials.
- Those who are slow, or resistant to change, will find accessing investment from this source will become more and more limited.
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