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Sustainable Finance

Pandemic highlights sustainable finance strategies to achieve UN development goals

November 9, 2020

 

By Kshamta Kaushik, Managing Director & Head, Corporate & Investment Banking – Europe, Scotiabank

 

COVID-19 has presented many challenges throughout the year, but it has also been a period of introspection where societies have come together for the greater good and are taking stock of how we can do things differently. This can have the power of accelerating emerging trends, including sustainable development goals and digitization.

 

As one of the panelists for the London Women in Finance Virtual Summit, I wanted to take the opportunity to reflect on ways the pandemic has impacted important global issues, such as the United Nation’s Sustainable Development Goals (SDGs) and its ambitious agenda to end poverty, protect the planet, reduce inequalities and improve quality of life by 2030.

 

Pre-COVID, we saw a large-scale commitment from various bodies to focus on global development issues and the need for greater innovation and partnerships to overcome sustainable development initiative funding challenges. In 2019, the UN Deputy Secretary General estimated a US$2.5 trillion annual financing gap to achieve the 17 bold SDGs in developing countries.1

 

The pandemic has intensified this funding challenge. Since funding is a key component of the UN SDGs, it’s obvious that the immediate economic impact of the pandemic is changing the priority mix for governments and policy makers, and rightfully so! The economic fallout will limit many countries’ financial flexibility to invest in these programs. And, pressing domestic matters could prompt some developed nations to look inward, when multi-lateral cooperation is actually required to bridge the funding gap between the ‘have’ and ‘have not’ jurisdictions. But it has also raised awareness among political leaders, and citizenry in general, of the need for significant investment to strengthen health and social systems and reduce inequality. There is increasing appreciation in the investment community of the need to support long-term, sustainable business strategies that help reduce risk and bring resiliency to corporate performance.

 

This shift in mindset was already gaining momentum pre-COVID. The financial community has been immersed in sustainable finance programs, introducing innovative products and solutions to channel capital between ESG-minded (environmental, social and governance) investors and creative organisations, agencies and projects that are tackling many SDG challenges.

 

In just a few years, the sustainable finance space has developed many skills and tools to capture the impacts of sustainable performance and create financial instruments that incorporate pricing mechanisms and incentives for companies to meet sustainability targets, ranging from lower-carbon outputs to gender equity targets.

 

Making a positive impact for the world

 

At Scotiabank, we are deeply committed towards contributing to this agenda. In 2019, the Bank committed to mobilize CA$100 billion by 2025 to help clients and the Bank transition to a low-carbon economy. The Bank also launched a dedicated Sustainable Finance Group to act as a center for excellence and drive innovative solutions by leveraging different teams across our Global Banking and Markets platform. As a result, we’ve led landmark sustainable bond and lending transactions for clients in Europe and the Americas that enable groundbreaking environmental and social initiatives, including COVID-19 relief efforts. And, I’ve observed how client appetite for ESG continues to grow amidst the pandemic, represented by an immense amount of liquidity entering the markets through recent ESG issuances.

 

In addition to this, our Group Treasury team has established a framework for Green financing and started to issue under that. At the same time, we have also established a Green liquidity investment portfolio with ambitious growth targets and are currently the largest Canadian dollar investor in sustainable finance.

 

Earlier this year, Scotiabank’s President & CEO Brian Porter signed the BlackNorth Initiative CEO pledge, to contribute to ending anti-Black racism in Canada and create workplace advancement opportunities. In the UK, the Bank has also signed the Race at Work Charter. We remain committed to fostering an inclusive culture with our customers and employees. In our continued efforts towards delivering meaningful long-term support to women-led businesses, we launched The Scotiabank Women Initiative, which is centered on three key pillars – Access to Capital, Mentorship, and Education.

 

It’s clear that sustainability driven financing strategies are at the heart of progressing the UN’s SDG agenda. We each play a vital role, as our organizations are essential intermediaries that can connect parties and deploy capital where it is most needed. As finance professionals, we are engaged in measuring the risks and opportunities in sustainability strategies. And, as trusted advisors, we have a responsibility to drive conversations and enable client action that supports sustainable development.

 

With the United Nation’s Sustainable Development Goals being more relevant than ever, the pandemic creates an opportunity to test new approaches, create cross-sectoral partnerships, and apply innovation to meet urgent global goals such as zero hunger, gender & racial equality and climate action.

 

1 United Nations, 25 September 2019

 

This story was first published by Women in Finance. Kaushik also participated in a panel on the topic of Financing Sustainability, as part of the UK Women in Finance Summit & Award Series 2020.

 

For more information, please contact:

 

Kshamta Kaushik
Managing Director & Head, Corporate & Investment Banking – Europe
(0) 207 826 5811 
kshamta.kaushik@scotiabank.com                           

 

Learn more about our Sustainable Finance Group

 

 

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