Why is Sustainable Finance Important in the Fight Against Climate Change?

On 10th August 2022, the Institute of Banking and Finance Singapore (IBF) held a panel discussion on Sustainable Finance’s Key Role in our Move to a Net-Zero World. This panel discussion was part of the Sustainable Finance Forum to reach out to the financial community on the topic of sustainable finance. The panel discussion features Yulanda Chung, Head of Sustainability, DBS; Dr Bai Bo, Executive Chairman, and Co-Founder, MetaVerse Green Exchange; Chrissa Pagitsas, Founder and Principal, Pagitsas Advisors, with Brian San, Executive Director and Head of ESG Education Programmes, Wealth Management Institute, as the moderator.

The role of financial institutions and investors 

The first topic that the panel discussion covered was the role of financial institutions and investors in helping industries achieve their green ambitions and work towards net zero. You may watch the panel discussion below or read on for the summary of the discussion.

To start, Chung highlighted that finance plays an important role in allocating capital in the right places. She also emphasized that capital follows innovation, industries, and government. 

Adding on, Dr Bai pointed out that innovation comes from scientific engineering and innovation, and these technologies and innovations drive financeable products and technology. Hence, he stressed how he has tried to incorporate these elements into MetaVerse Green Exchange (MVGX), where he combined financial services, carbon, and technology to solve real-world problems such as the Nationally Determined Contributions caused by the Paris Agreement. 

“That is exactly where MetaVerse Green Exchange, as a fintech company, figured that by combining these three areas of knowledge and expertise, we can come up with innovative financial and financing technologies. Thus, we can solve the problems that sometimes even politicians are struggling to solve in the carbon market – the Nationally Determined Contributions.”

Dr Bai Bo, Executive Chairman and Co-Founder, MetaVerse Green Exchange

Pagitsas also highlighted that there is an intersection point between sustainability and sustainability principles, and there is still a long way to go to a low-carbon future, as a lot of innovation is waiting to happen with sustainability and sustainable finance. 

When asked about the most promising areas where digital tools can be most useful in helping with sustainability solutions, Dr Bai answered that technology can be used in a value chain, such as how sensors can work in management systems to help save electricity. However, he also highlighted the increasing need to store this information, and hence at MVGX, the Non-Fungible Digital Twin (NFDT™) was developed. He highlighted that the NFDT™ can capture and store information in real-time, which can make management systems more efficient. Furthermore, he emphasized the importance of digital tools in providing data that is verifiable and immutable for tracking and measuring carbon emissions. 

The link between new technologies and the actual impact of driving less pollution

The second key topic highlighted the link between new technologies and the actual impact of driving less pollution, and how sustainable finance would help in these areas. 

In response, Pagitsas highlighted that right now, we are still at a relatively nascent point, as the technology that helps measure the impact or the pollution in the environment is still very custom to each industry. In addition, because the data points are so specific, what is more important now is how technology is helping to reconcile and prioritize data points. 

To add, Chung highlighted that it is most useful to find cutting-edge technology and solutions that are grounded on on-site research in some way. This means to say that for instance, experienced firms that have been doing data surveys can leverage on these real data points that they have gathered over decades, triangulate the data points, and do machine learning to come up with a predictive analysis of what is likely to happen. With that analysis, banks can come in with greater confidence to finance those cutting-edge technologies. 

How financial institutions and investors help industries achieve their green ambitions

For the third topic, the panelists highlighted how financial institutions and investors help industries achieve their green ambitions and work towards net zero. 

Chung also highlighted the importance of the ‘governance’ aspect of ESG, and she emphasized that governance is more than just corporate governance, gender diversity, ethnic diversity on the board, or remuneration; it’s about the management systems and accountability to manage environmental and social risks. 

In addition, she stressed that ESG should not be looked at as a casual term and it is important for individuals to think: what is important to them? Is it human rights, is it climate change, is it health and safety – and from there, one can think about their career development by leveraging on their professional experience and their interests, as ESG is all interrelated. 

Career opportunities in the sustainability sector

The last section of the panel discussion focused on career opportunities in the sustainability sector and some tips that the panelists have for the audience. 

Dr Bai highlighted that interdisciplinary knowledge is very important. He advises the audience to focus on areas that they do best and then try to be more open-minded to add more interdisciplinary knowledge. He added that at MVGX, we offer an ESG Trainee Management Program where we train those who are passionate about ESG and sustainability. You can find out more about the program here.

Pagitsas added that it is quite important to have a team of people with varying expertise and that someone who is interested in this industry should not be scared by ambiguity. Dr Bai added that a can-do attitude is very important and critical, as sustainability is a new field and we are creating new ideas and solutions every day. 

As a closing remark, Chung advised the audience to decide on a narrower area of interest as sustainability is too broad. She emphasized that one should decide on the exact thing that is of interest and focus on it. Pagitsas added on by highlighting that no matter what seat you have today, whatever you’re doing – every seat is a sustainability seat. You should focus on asking how can I make the supply chain/ product more sustainable – once you understand the area you are interested in, you can then drive sustainability from your seat. Dr Bai reinforced three key takeaways:

“1. Why do you care about ESG? Don’t do it because it’s hot. 2. If you really care, you need to take that can-do attitude – because when there is a will there is a way 3. This is a very new area, so you need to be open-minded, and keep learning.”

Dr Bai Bo, Executive Chairman and Co-Founder, MetaVerse Green Exchange

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