–> This is a pre-event interview in the run-up to the Leaders in Sustainable Finance Event on February 1, 2024.
Jeroen: Thanks for taking the time, Leonie, to talk to Leaders in Finance. We are very much looking forward to the Leaders in Sustainable Finance event on the 1st of February 2024 with KPMG as its main partner. First of all, could you introduce yourself?
Leonie: I currently hold the position of Associate Director at the Sustainability Reporting and Strategy Team. My professional background encompasses asset management and banking, and I joined KPMG approximately five years ago. I work mainly at the intersection of sustainability strategy, target setting and the reporting of essential sustainability information in line with CRSD. As the head of ESG insurance, I serve as the coordinator for all ESG-related activities for our clients in the insurance sector.
Jeroen: What do find most interesting about your role, or what do you enjoy the most?
Leonie: What I particularly enjoy about working at KPMG is the opportunity to make a significant impact. We have a seat at the table with individuals who have substantial influence over the transition. We work with decision-makers and organizations that play an important role in the shift toward a sustainable economy. That is the aspect I find most fulfilling in my role. Additionally, I appreciate the presence of our highly intelligent and talented colleagues.
Jeroen: When you think about Sustainable Finance, what do you think about?
Leonie: I think that is a great question because there are a lot of definitions around sustainable finance. I always stick to the EU approach, which centers around cash flows. Essentially, it involves investments aimed at facilitating the transition and making decisions that result in increased long-term investments to sustainable economic activities and projects. The key emphasis is on aligning these thoughts with the cash flows. In simpler terms, a bold statement translates to “put your money where your mouth is.”
Jeroen: What is the role the financial services industry has to play or should play in the sustainable transition?
Leonie: In my opinion, the financial sector is the driving force behind this whole transition. This belief stems from the principle of “put your money where your mouth is.” If the activities that are not sustainable are no longer financed, then, to use a Dutch expression, “the shore turns the ship”, which means external forces or circumstances force an inevitable change in direction. I also believe that this is a primary objective of the European Union. They use the sector as kind of a funnel. instead of direct engage with all these companies, they leverage the existing outreach capabilities of the financial sector. I am aware that the sector sometimes expresses dissatisfaction in terms of regulation, because they have to deal with a lot of regulatory matters, in addition to their existing challenges. However, they do acknowledge their role.
Jeroen: What do you think is the biggest challenge for financial institutions? Is it the amount of regulation and laws?
Leonie: I believe the primary challenge for financial institutions lies not in the regulations themselves, but the fact that it touches each and every department within the organization. It affects areas, from risk management till marketing, making it a horizontally integrated matter. Unlike many regulatory issues that tend to be vertical, this horizontal approach poses the greatest challenge for financial institutions. Additionally, I think that having the knowledge within these financial institutions is also a big challenge. The horizontal nature of the approach necessitates knowledge across all departments, not just specific expertise on individual topics like SFTR, CSRD, biodiversity, human rights, or any other relevant subject. It requires people that have the full overview, an overarching holistic view of these difficult topics, which, in my view, makes it particularly challenging.
Jeroen: That is a really good point. Who’s role or responsibility is it in an organization, the CEO or the Chief Risk Officer for example, especially considering its widespread impact on the entire organization?
Leonie: Yes, and that is precisely why we ultimately believe it is the CEO. However, if you look at the CSRD, then it is the CFO, but it also encompasses risk and compliance. So the challenge starts at the board level. Determining who will take ownership of this topic is a crucial starting point. Roles and responsibilities within the financial sector on this topic, that is really a challenge. No need to mention that the tone from the top is almost equally important.
Jeroen: The subtitle of the event is ‘what is the pain, and what is there to gain’. We have discussed some of the pains like the regulation that comes to an organization. Do you see this as an opportunity for FIs?
Leonie: Definitely. The financial sector as such has a societal role. It plays a crucial part in mitigating financial risks, providing loans, and making investments. Positioned at the heart of society, the sector has a huge reach, which is a big opportunity. In recent years, doubts have arisen regarding the sector’s role, actions, and societal value. However, I believe that by actively embracing sustainability, the financial sector can enhance its societal contribution and prove its true value.
Jeroen: So it is a massive opportunity in terms of what they can do for society. Is it also an opportunity from a commercial perspective?
Leonie: Sure. They are going to finance this whole transition. Additionally, in the context of the financial services industry and the transition, in my opinion it is key that the sector is fully transparent about this topic. Acknowledging that transparency is challenging, and openly communicating this challenge to society, is an important aspect. Sometimes the economic approach and the societal approach do not match perfectly. Being transparent about the sector’s goals, what is achievable, and what currently is not, is an opportunity for the industry.
Jeroen: What things around the Leaders in Sustainable Finance event are you looking forward to in particular?
Leonie: You have an incredible lineup, my compliments to the team. Sustainability is a topic where organizations should work together, considering the multitude of aspects that need clarification and standardization. For instance, there are currently no universally accepted standards for measuring impact. Given the complexity and horizontal nature of the topic, it is crucial for all financial institutions to collaborate. With a lineup like this, I am really curious to see the outcomes for the sector—whether it will foster close collaborations among all these decision-makers gathered in the same room.
Jeroen: Thank you Leonie, for joining this short pre-event interview with Leaders in Finance. I am very much looking forward to have you as our guest on the 1st of February guest, as well as main partner for the Leaders in Sustainable Finance event. Thank you!
–> This is a pre-event interview in the run-up to the Leaders in Sustainable Finance Event on February 1, 2024.