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SOCIETE GENERALE SUPPORTS SOVEREIGN WEALTH FUNDS IN THE ACCELERATION OF SUSTAINABLE AND POSITIVE IMPACT FINANCE

11/02/2019

In a dedicated white paper, the Bank offers a tool-kit of actionable investment and borrowing solutions enabling Sovereign Wealth Funds (SWFs) to become game-changers within the global sustainable and positive impact finance agenda.

 

Entitled Game-Changers: Sovereign Wealth Funds as Drivers of Sustainable and Positive Impact Finance the report published today by Societe Generale in the Middle East and the World Government Summit explores concrete ways in which SWFs can drive the sustainability agenda to which their respective governments have committed[1]. The tools highlighted in the report include:

 

  • Off-the-Shelf and Customised Indices and Baskets that meet Environmental, Social and Governance (ESG) criteria. Because of their flexibility and customisation opportunities, ESG Indices and Baskets allow sovereign wealth funds, as leading global investors, to access tailor-made solutions and shape agendas related to specific sustainable goals, such as renewable energy, education, or gender equality.
  • ESG-related debt and impact investing that support global and local sustainable projects. The sheer size of sovereign wealth funds allows them to participate in very niche sustainable solutions, including illiquid opportunities ranging from supranational debt issued for sustainable projects to venture capital.
  • Methodologies to translate, implement and assess their responsible investment strategies. As they start to follow through on national ESG commitments, various methodologies can help responsible sovereign wealth funds collate data on environmental, social and governance factors across asset classes, industries and geographies.
  • Bonds and loans. To finance their investments in sustainable initiatives, from funding the energy transition to developing smart cities, sovereign wealth funds can take advantage of the growing number of financing tools that incorporate sustainable objectives such as green, social and sustainability bonds as well as green and impact loans.
  • Building on the common objectives of Islamic Finance and Sustainable Finance, as the range of Islamic products expands in response to a growing pool of liquidity and demand in Shariah compliant investments.
  • Examples of impact-based business and financing models. Sovereign wealth funds can be key accelerators of the market disruption that requires private and public stakeholders to rethink impact in long-term strategies as well as day-to-day decision making for a world-scale sustainable economy to materialise. Transitioning to an impact-based economy, where business and finance use economic, environmental and social impact considerations as a starting point to generate revenues, calls for market disruption at three stages: business model, financing model, and impact monitoring.

          Read our report here.

Richad Soundardjee, Chief Executive Officer, Societe Generale Middle East, said: “The Middle East is home to some of the largest sovereign wealth funds in the world, and many countries in the region are in the throes of transformation to shift away from dependence on revenues from fossil fuels and achieve long-term stability. Thus this region is the natural place to launch this report so that we can contribute to shaping a more sustainable world together.”

Marie-Aimée Boury, Managing Director, Positive Impact, Societe Generale Corporate & Investment Banking, said: “Finance is at the very heart of the shift towards sustainable development, and Societe Generale has been a pioneer in the transition to a more inclusive and low-carbon economy by championing the concept of Positive Impact Finance for our clients and also globally as co-chair of the United Nations’ Positive Impact initiative. This report highlights the breadth of the Bank’s insight and expertise underpinning the sustainable finance solutions that can bring to life the world’s positive impact ambitions.”

Amal bin Shabib, Managing Director of the World Government Summit, said: “The World Government Summit brings together public and private sector players from around the globe to try and solve some of the biggest challenges facing society today. Financing the UN Sustainable Development Goals is a critical way to solve these challenges, and our report published alongside Societe Generale provides thought leadership that is both relevant and – crucially – actionable.”

 

[1] In 2015, United Nations member states adopted the 2030 Agenda for Sustainable Development, a shared blueprint for peace and prosperity for people and the planet, now and in the future. This Agenda is underpinned by 17 Sustainable Development Goals (SDGs). See report for more details.