Financial returns are fuelling ESG boom as banks scramble to make sustainability gains

 

  • BNP Paribas best stand out provider of sustainable/ESG finance
  • Poor data quality and inconsistency in definitions are the biggest barrier to ESG financing
  • De-risking of business fuelled by ESG most likely to impact bottom line over next five years[1]

London – September 30, 2021 – Financial return is the top driver for ESG financing decisions for 800 of the largest companies globally, with one in every four (25.3%) citing it as the key motivation, according to a new report published today.

The East & Partners report found that investors (19.8%), marketing applications (14.6%) public relations (12.9%) are also key to driving the surge towards ESG. However, despite the crucial COP26 climate talks taking place in Glasgow in November, emissions reductions (2.5%) and making an impact (1.9%) are the two lowest drivers.

The report also found that poor data quality (77.3%) and inconsistency of ESG definitions (66.7%) were the biggest barriers to increasing financing for companies already actively engaged in ESG. However, lack of investor demand was the lowest barrier at 10% showing that better data and definition could lead to further increases in ESG finance.

Paul Dowling, East & Partners, said: “The idea that investors are pushing for ESG adoption for the greater good of the planet is as absurd as one in which investors willingly forgo double digit returns. However, some investors who position ESG being primarily about risk mitigation, will increase existing asset values over time by applying pressure for better disclosure and governance around flagged risks.”

Corporate treasurers predict that de-risking a business will have the most substantial impact on their bottom line over the coming five years at 68.5%. This was followed by the “greening” of supply chains (64.8%). This was followed by 53.7% citing transitioning to 100% renewable energy and 51.6% citing the offsetting of carbon emissions. 

The report observes that, under pressure from large institutional investors as well as reputational risk, banks have also started taking matters into their own hands by declining to fund some of their biggest clients and actively walking away from others entirely when their projects and strategies do not align with their own around ESG criteria.

BNP Paribas came out top of the best perceived “stand out” ESG or sustainable finance provider. It was followed by Standard Chartered and Citi.

Rishi Bhattacharya, CEO of Impact & Influence, a communications consultancy said: “The messaging around ESG and sustainability has permeated the global consciousness to such an extent that the third most common driver of ESG financing decisions is marketing applications, swiftly followed by public and corporate relations. For this group of global top 800 businesses, the ability to market their sustainable actions to their key audiences outweighs nearly all other factors.” 

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Notes to Editors

Direct interviews were conducted with the top 100 revenue ranked corporates in each of eight countries – Australia, Canada, China, Germany, Hong Kong, Singapore, the United Kingdom and the USA. All interviews were conducted on a direct basis with the individual responsible for the treasury and banking function. CFOs and corporate treasurers from 752 out of a defined population of 800 institutional enterprises with annual turnover of US$725m plus participated in the research without incentive.

About East & Partners

East & Partners is a leading specialist business banking market research and analysis firm. The firm’s core expertise is in the provision of analysis and advisory services tailored for the commercial, business and institutional banking markets across Asia Pacific, Australasia, Europe and North America.

https://www.eastandpartners.com

About Impact & Influence

Impact & Influence is an independent communications consultancy designed for the next generation of leaders, companies and organisations. It provides both strategic counsel and execution, using communications to create, deliver and protect business value.

https://impactandinfluence.global

[1] Bottom line refers to net income

Minexx appoints Impact & Influence for communications brief

Minexx has appointed Impact & Influence to advise the company on its strategic positioning and communications.

Minexx is securing the mineral supply chain from the moment a mineral comes out of the earth to the moment it is used in tech, such as smartphones or electric cars – all with traceability, transparency and trust. Its blockchain platform - with its global application – transforms and re-designs the value chain bringing benefits to miners, smelters, traders, tech companies and governments while directly impacting 10 of the 17 Sustainable Development Goals. 

Earlier this year the company announced a world first as it exported minerals with full financial transparency from the Democratic Republic of Congo, by processing $250k of blockchain certified payments. Last month it also is announced the appointment of Emmanuel Beau as Chief Investment Officer as the company accelerates its ability to secure supply chains for minerals. 

Marcus Scaramanga, CEO and co-founder of Minexx, said: “Communicating our progress is going to be crucial as we expand our operations and as we look for investment. We are delighted to have the team at Impact & Influence on board to help us accelerate our mission.”

The demand for minerals such as cobalt, copper, tin and tungsten has rapidly increased in line with the growing appetite for technology. Many are sourced by artisanal miners with 250 million people globally who depend on this informal industry, many of whom are in sub-Saharan Africa.

Rishi Bhattacharya, CEO and founder of Impact & Influence, said: “It is great to be advising Marcus and Minexx at this juncture of the company’s development. It is using technology to have a really positive impact on an outdated sector and the company and is already going from strength to strength in its development.”

Minexx is headquartered in London, UK, with operations in Rwanda and DRC and with an office in Cape Town, South Africa.

Tech company Finboot appoints I&I for communications and content brief

Finboot has appointed Impact & Influence to advise the company on its strategic positioning, communications and content strategy.

Finboot is a technology company that gives world class customers a competitive edge through accelerating their digital transformation, realising value and building trust through blockchain.

The company has developed MARCO, an ecosystem which enables companies to incorporate blockchain within their value and supply chains, bringing traceability, transparency and compliance which, in turn, helps them meet sustainability and ESG requirements while also increasing operational efficiency.  

Earlier this year the company secured investment from the Development Bank of Wales and global energy company Repsol in a £2.4 million fundraise.

Nish Kotecha, Co-Founder and Chairman of Finboot, said: “Following our successful fundraise, how we position ourselves for this next phase of growth is going to be crucial. Our world class blockchain powered technology has tremendous application for forward-looking businesses across sectors and geographies. We are delighted to have Impact & Influence on board with us for this journey.”

Finboot’s customers include Repsol, Stahl, the global chemistry supplier, as well as Minexx which secures the mineral supply chain.

It was announced that earlier this month that Minexx had also appointed Impact & Influence to advise it on a communications brief.

Rishi Bhattacharya, CEO and founder of Impact & Influence, said: “Finboot is having a tremendous impact on its customer companies, including leveraging blockchain to drive sustainability and improve ESG standards. We look forward to accelerating the uptake of the company’s solution through communications.”

 

 

 

Diversity. Sustainability. Mental Health. Are we confusing authenticity with optics?

Diversity, mental health and sustainability have become buzzwords for businesses over the last few years - eating up more marketing budget than ever before. 

While this shift in focus, investment and attention must be applauded, only when it’s genuine is it worthy of shouting about.

Just last week we’ve seen institutions clamour aboard the bandwagon to shout high and low about International Women’s Day, but is it driven by passion and dedication to the cause or fear of being singled out for not saying anything? 

And it’s not confirmed to gender. Take mental health, racism and sustainability - many institutions are going to great lengths - and at great cost - to be part of the zeitgeist. If these gallant marketing efforts are matched in tangible action, progress and achievement then great, shout it from the rooftops. But what about when it’s not? When the fanfare fades and all that’s left is hot air, lip service and the people you’ve bruised along the way? Are we confusing authenticity with optics?

The problem is, people believe it, they buy into it, they make decisions based on the information these institutions are putting out there and how they present themselves. At a time when consumers are more empowered, sceptical and woke than ever, their trust shouldn’t be taken for granted. 

If investment in the optics outweighs the lived experience then there’s a very real problem - and one that won’t go away easily. It takes commitment to maintain a lie. The larger the disparity between reality and perception, the more resentment will build - until the truth spills out in spectacular fashion, leaving reputations in tatters. 

Over the years, we’ve observed seemingly progressive companies of all sizes, public and private, that have swept instances of sexual harassment and bullying under the carpet, manipulated poor staff wellbeing survey stats and championed ESG and sustainability on one hand while not practising what they preach on the other. All whilst investing heavily in promoting their ‘achievements’ in these areas. 

Yes, thankfully, there are many shining examples of companies living by their values and making a positive difference, not just in the arena they operate, but in the wider world too. In order to not undermine these efforts, it’s all the more important that we distinguish between those saying they do, and those doing what they say. 

The PR and communications industry takes a lot of flack for its perceived hand in the so-called dark arts. A reputation deserved by some, no doubt, but as a graduate at Edelman (where Rishi and I first worked together) I was brought up in the school of thought that “you only get the reputation you deserve”. 

We care about the work we do, and the companies we work for - so we only work with those that share our values, strive to make the world a better place and don’t just talk the talk. We work with progressive companies and next generation leaders that, like us, believe choice between profits and purpose is no longer binary.

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