FC meets: Lead Sustainable Finance
On a sunny spring day, me and my colleague Johann Gandolfo had a chance to speak to Stephan Geiger who is Lead Sustainable Finance at EY in Switzerland with a strong track record within governance and regulatory transformation projects. We touched on Stephan`s background, his view on the sustainable finance development and, lastly, on his tips on how to enter the sustainable finance space. Let`s dive into it!
I – Stephan`s career and being a sustainable finance leader
Nejc Lavric - Hi Stephan and thank you for meeting us and sharing your knowledge with the Finance Club community. Let’s start off by learning a little bit about you. You were once attending a programme at UZH, so we were curious to hear about your time there. Could you share some details?
Stephan Geiger - Sure, happy to do so! Back in the days I did my diploma in Law through the Europa Institute. I saw it as an exchange platform with international lecturers and fascinating people. I had the ability to visit European institutions in Luxembourg and Brussels, and even travelled to China and the US. That gave me broad overview of what laws look like out there, which was a great addition to my Swiss base.
NL - That must have been exciting! But how exactly did you become active in the ESG space?
SG - As you may know, I have a background in the banking and asset management advisory space. The trigger that made me change to sustainable finance came from the European sustainable finance action plan that taps into these new upcoming regulations. Also, the climate topic is becoming more urgent and we have to act soon.
NL - … and what exactly does it mean to be a sustainable finance lead at EY?
SG - As the Lead Sustainable Finance, I focus on enhancing service offerings for our clients. At the moment we are active on various projects, such as regulatory driven projects in the asset management and sustainability strategy & disclosures projects for various large corporations in the financial industry and beyond. Given the broad spectrum of services, we must work together with different divisions, such as risk and business transformation, to offer the best solutions to our clients.
...the climate topic is becoming more urgent and we have to act soon
NL - You have worked for EY for over 10 years, what made you stay at the firm?
SG - A lot of reasons have kept me here at EY. But personally, I think the main reason is the constant challenge of dealing with a variety of projects, clients and topics which create a dynamic and evolving environment that I very much appreciate.
II - Sustainable finance and regulations
NL - You have mentioned regulations earlier, what are some of the biggest regulatory changes currently?
SG - So far, in Europe just publicly listed companies had to publish a sustainability report. This is going to change soon. In fact, we believe that the number of firms reporting such information will increase by a factor of five based on the new regulations in Europe. Also, the narrative of what sustainability means is changing. With the new regulations, we are moving from storytelling to a more data driven communication. It is becoming a necessity to underly ESG statements with the respective data.
NL - I see, but how reliable is such data? There is a criticism that some firms might not be as green as some ESG ratings might suggest.
SG - You touched upon the topic of “green washing”. This term is referring to an expectation gap between the company and the consumers when they hear the term sustainable. With the new reporting standard, it will be clearer how sustainable companies really are. In other words, we will be less “lost in translation” and in addition based on this increased transparency the risk of being caught “green washing” will be higher in the future.
NL - So data is going to play an increasing role in the future. But what comes next after these regulations are implemented?
SG - At the moment, solving the issues is challenging, as there is little data. But as mentioned, the transparency is increasing. Once the firms overcome the data issue and create a solid data foundation, an information-based decision making will be used as a basis for policy makers. To be more specific, policy makers will be pushing for capital to be allocated in line with the green and sustainable transition.
NL - I assume, however, that progress is not universal in Europe. For example, ESG seems to move quickly in the European Union but how relevant is it in Switzerland?
SG - Good question. The short answer is that the Climate-related Financial Disclosures TCFD, which is the most known international standard, is being implemented in Switzerland as well. But it is more complex. Switzerland is known as a liberal country, with the tendency not to push new rules or regulations as a first mover. The well-established Swiss financial sector does not want to add a Swiss-finish to already existing global regulations. Instead, we typically follow what the surrounding relevant markets are doing and try to subsequently implement pragmatical solutions. That being said, we see a lot of different sustainability strategies and interest among the Swiss financial institutions.
III – Tips to entering sustainable finance field
NL - We see many passionate students for the sustainability topic. As a person with experience in teaching, what would your advice be for students trying to learn about the ESG field?
SG - It is difficult to get know-how on this topic, I agree. The topic is extremely broad but any extra qualification in the direction of sustainability is a plus. The talent market is very dry in the sector but if you invest in such an education now, I am certain it is a “job guarantee” for the future. There are some interesting and credible certificates from established institutions that help you stand out. If one is interested in the topic, I suggest finishing one of these. It is a strong signal for institutions, such as EY.
NL - Would you then say that sustainable future will require specialist or more generalists?
SG - A sustainability profile will in many ways have to connect the dots between different disciplines now and in the future. The upcoming changes will impact organisation from bottom to the top. Having a sustainability profile is in some sort an upskilling on what you can already do, but you surely need some specialised skill. For example, a research profile will need to have the technical knowledge to understand climate impacts, an accountant will have to get familiar with the ESG disclosures and a legal profile will have to dig into the latest regulations.
...if you invest in such an [sustainability] education now, I am certain it is a “job guarantee” for the future.
NL - That`s a great insight into this relatively new job market.
SG - Yes, without a strong passion for the topic, you won`t be motivated for long. If we see you are, for example, helping in a food waste association or promoting bike transport this shows that you are intrinsically motivated. We search for people that truly believe in the cause and getting engaged in such activities is a credible signal for us.
NL – Thank you for these great tips Stephan. We want to thank you again Stephan for taking your time and hope the readers can take something home today!
SG - Thanks a lot for the initiative!