Dear clients, disruptions like the COVID-19 pandemic have made one thing very evident: if our economic recovery is to be resilient to withstand future...
Dear clients, disruptions like the COVID-19 pandemic have made one thing very evident: if our economic recovery is to be resilient to withstand future disruptions, it must be sustainable.
Stimulus packages by governments for reviving economies were initially aimed at saving lives and livelihoods in the immediate term. But as the focus shifts from rescue to recovery, ‘green’ efforts are gaining momentum, whether renewable energy, energy efficiency projects, green finance or even putting a price on carbon. The importance of sustainable green growth is emerging as an important marker for the post-pandemic recovery.
A McKinsey survey of both developed and emerging markets found nearly two-thirds of respondents hopeful that governments' pandemic economic-recovery efforts would prioritise climate change1. Recently the European Commission announced making €750bn available in the form of grants and loans to put into green projects to help the economy after the COVID-19 crisis. The money will only be available to those projects that are green and in line with the EU Green Deal.2
Environmental, Social and Governance (ESG) investment funds also outperformed the S&P 500 during the pandemic3, just as the immediate months of the crisis saw ESG Exchange Traded Funds (ETF) funds stocks show strong inflows while other funds reported massive outflows.4 We feel that this trend is indicative of an ever-growing investor appetite for companies that take a stakeholder view of their business as opposed to a purely shareholder view. The concept of stakeholder capitalism has been a popular one for a while now. While the pandemic put into perspective the relevance of ESG considerations to company performance and investment returns, ESG will continue to influence corporate and investor actions, moving forward. It is encouraging to see this sentiment reflected across markets. With the above in mind, we have dedicated our next edition of Bankable Insights to sustainability. We hope that you will find the selection of articles insightful, as we call on Financial Institutions and investors to help shape a more resilient future by channelling capital into sustainable assets offering solutions to the main challenges of our future such as gender parity, climate change and financial inclusion. We know that the world is only at the very beginning of what will hopefully become a story of green recovery. Standard Chartered remains committed to playing an integral role in making it happen. We look forward to engaging you further on your sustainability journey.
