Opportunity for FI to be more impactful

Top1000Funds | Amanda White | Oct 27, 2020

white 300x243 - Opportunity for FI to be more impactfulNow is the time to embrace the Sustainable Development Goals (SDGs), according to head of sustainable investment at Newton Investment Management, Andrew Parry, with the COVID crisis exposing a lot of the frailties in our society and economic system.

“This is very much a social crisis, a human crisis,” he said in a Fiduciary Investors Series podcast. “It has helped galvanised attention on this issue, and brought together a broad range of partners across private and public sector and [the SDGs] present a way of recovering from the crisis if executed well.”

The very low levels of interest rates around the world provide a unique opportunity for the finance industry to be innovative to meet the needs outlined by the SDGs.

“I think the finance sector has gone beyond a re-mapping of the goals, and is beginning to understand that the SDGs represent an enormous opportunity,” he says.

See: Task Force Analyzes Role of Fintech in Accelerating SDGs

In particular he says there is an opportunity in the fixed income market to accelerate its participation in achieving the goals.

“In the fixed income market one of the measures of impact is additionality. They can bring additional capital to bare to help tackle and fund these needs. One of the really interesting areas is how do we take the learnings from green bonds and apply it to the SDGs and bring new capital to bare,” he said. “The investment world is crying out for attractive investment opportunities if done with the proper public private partnership it’s a tremendous opportunity for the fixed income market to be impactful investors.”

This is where it is important that asset owners look through the lens of systems thinking and long-term thinking so the three concepts of environment, people and financial returns all come together.

“There is a lot of dynamism in this and the world is constantly changing. I ask people if ESG didn’t exist as a concept, would you carry on investing in the way you would today under those labels? I would. They are fantastic ways to look at the way the world is going, it’s expanding your world and frees you from the dead hand of the index, and frees you to look at the world and where it is going.”

See: Davos 2020: Financial inclusion and fintech is key to meeting the UN SDGs

Parry says the role of investors is to navigate clients through a changing world and identify relevant business models for that.

“Social norms are unstable over time, which is good because we’re seeing such a dramatic shifts in certain things, like gay marriage. Companies that anchor to the past, or have the arrogance to think they will always be relevant will be marooned.”

He also believes that businesses need to think about the world as in adaptation. There is a very different construct in the FSTSE in names but also the businesses that reflect society. No business model is designed to last forever because things succumb to changing norms. Being relevant in a changing world is a powerful concept. Darwin didn’t say survival of the fittest, he said survival of the most adaptive.

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NCFA Jan 2018 resize - Opportunity for FI to be more impactful The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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