23. Jun, 2019

Keep Smiling. Your CFO is working on the Sustainability Agenda

I am most touched by the excellent outcome that the ‘Co creating Social Impact’ booth had, during the recent Global Finance Forum in Novartis. It was impressive to see how Finance is already engaged into the Trust and Reputation Building objective and the Sustainability Agenda. The wealth of best practices, experiences, material and exchanges was huge.

I am writing this article to thank you all the participants and contributors and I have the privilege to share some of the transcripts from two speeches made by HRH The Price of Wales (The most recent at the May CFA Institute in 2019) on how Finance can help Society to be a better place.

The good news, we are not alone in sustaining the need for a better world!

HRH Prince Wales reminds us that “It has been recently reported that the World is behind the expected achievement and it could be easy to despair of what we are bequeathing to our grandchildren. Already we are facing a truly terrifying combination of risks such as accelerating climate change, water scarcity, ecological degradation, unsustainable population growth and increasing inequality and these risks are exacerbated by a projected increase in global temperature which, without action, climate scientists have warned, could rise on average by nearly 5 degrees above pre-industrial levels by 2100 and are said to continue to rise until we achieve a net zero carbon world”.

Two years ago, I started taking action, under the logo “The Happy CFO”, reflecting and sharing information, ideas about how Finance, Sustainability and Happiness can be connected. My recipe is simple and at the same time, very challenging: «Our companies will continue to be profitable and generate work for our great-grandchildren, if the CFOs convince their CEOs that short term orientation, not balanced with objectives of environmental and social sustainability, will not last long.».

I presented and shared my philosophy not only on the blog, that has reached almost 28,000 views in total, but on LinkedIN with about 1000 views per month and through three conferences in Milan, Paris and Oxford. Every time I share my thoughts, I find Finance and non-Finance people agreeing that the matter requires attention and action.

The good news, we are not alone in sustaining the need for a better world!

“Policy, technology and data – HRH The Price of Wales continues- will all need to play their part in addressing these challenges, but finance and investment, in particular, are an absolutely crucial part of the solution. In the simplest of terms, capital needs urgently to be allocated away from activities that generate negative externalities and towards those that will make a positive impact on one or more of the Sustainable Development Goals. As you may be aware, in 2015 the United Nations ratified 17 global goals for sustainable development, these sustainable development goals provide a vision for the future: a vision around which action can be mobilised, where we put nature and society back at the heart of our considerations. The SDGs call for leadership and practical action from both the public and private sectors and there is an extremely compelling business case for organisations to deliver the goals.”

To say it with Novartis CEO Vas Narasimhan: “the only reason we can deliver profits to the world, to our company and to our shareholders is when we positively impact society.

Vas is encouraging Finance to discuss on Purpose and I would like to take a few moments of your time to say why I believe that Sustainability is central to the Purpose of Novartis Finance Community. It has been estimated that achieving the SDGs will open up 12 trillion u.s. dollars of market opportunities by 2030. Of course, the cost to society, business and the finance community of not achieving a sustainable future is far greater now. For Novartis in particular, SDG number 3 - Good Health and Well-Being: Ensure Healthy life and promote well being for all at all ages – represents an opportunity to provide solutions to the World addressing Malaria and other communicable disease while facilitating access and reduce premature mortality to more widely spread ones (as for example diabetes). Developing new and innovative ways to reach people in lower-income countries is one of Novartis top priorities. To expand access to healthcare, it pursue a variety of approaches".

The good news, we are not alone in sustaining the need for a better world!

HRH reminds us that we are not alone: “The good news is that, not only are investment professionals becoming aware of the positive impact on performance that can be achieved by incorporating E.S.G. considerations into investment processes, but many are also increasingly conscious that demand for these products is rising fast, both by institutional and retail investors, and that society, in the shape of regulators and policymakers, is, at last, starting to require action. However, a great deal more is necessary, I fear, if we are to have any hope at all of moving to the long-term resilient, and durable economy we so desperately need”.

During the GFF Conference, we shared that we are already reporting more holistically Novartis Impact, but following HRH Prince Charles' speech: “Of course, better reporting is pointless unless it has some impact on decisions, and so I very much hope you might consider what steps you can take to incorporate insights gained into your investment analysis and decision-making. Equipping Finance associates with the knowledge and skills to adopt this integrated approach to investment is, of course, vital. I am therefore delighted to hear that (…) you will take further steps to further integrate E.S.G. So in summary, I could only say that you have some extremely important choices to make. In an increasingly threatened and uncertain world, the stakes could not be higher, and your leadership, and that of your peers, will be absolutely crucial in achieving a more secure future for us all”.

Thank you to all who contributed, we are not alone!

Your Happy CFO