Trade Finance TV: How should sustainable finance frameworks evolve?

At the COP26 in Glasgow held in November 2021, the importance of frameworks that everyone can agree for moving from talking the talk to walking the walk became very clear. The EU Taxonomy has covered much of that ground, but how do we make further progress?

Dr Rebecca Harding, CEO of Coriolis Technologies explains how the difficulty facing trade – and trade finance – when it comes to sustainable finance is ensuring ESG transition is manageable and measurable.

“We have the technology to nudge behaviours, we have the data that is out there, and now creating those frameworks into actionable plans and actionable metrics is the most important thing,” she says.

In a short interview on Trade Finance TV Harding explains how to move from “do no harm” to doing things that make a positive contribution, and how to incentivise the change.

Press play to learn more.

Participant

  • Dr Rebecca Harding, Independent Economist and CEO of Coriolis Technologies

Presenter

  • Clarissa Dann, Editorial Director, Deutsche Bank

Transcript of interview:

Clarissa Dann: After COP26, the importance of frameworks we can agree on for ESG actually happening on the ground when it comes to lending or investing has become more important than ever. We’ve got Dr. Rebecca Harding here in the trade finance TV studios today to tell us a bit more about where we go from EU taxonomy and so on. Welcome, Rebecca.

Dr Rebecca Harding: Hi. I think it’s really important question to start talking about how we standardize all of this because ESG is a planetary problem. So sustainability is something that affects everybody around the world and in very different ways. The problem that trade has and the problem that trade finance has is to distill it down into something that they actually can manage, and most importantly of all, that they can actually trigger and nudge behavior changes with. So we have the technology to nudge behaviors. We have the data that’s out there and now creating those frameworks into actionable plans, actionable metrics is the most important thing. And it’s not that we can’t do it or don’t want to do it now. The imperative is there, we have to do it.

Clarissa Dann: So how do we get beyond the do no harm? We’re very good at deciding what not to invest in and who to turn down for a loan. How do we make good decisions?

Dr Rebecca Harding: So I think this is about not being punitive. Actually, I think what we have to do is move from the, as you say, do no harm and say actually there are some things that make a positive contribution. So the exciting thing about the Sustainable Development Goals is that it’s possible to distinguish between the ones that do something positive and the ones that do something negative. And so we can actually target and incentivize those things that contribute positively. And the same is the case with the taxonomies as well. So, for example, the European taxonomy has an element in it which is actually making a positive contribution. So you might score three out of six against greenhouse gas emissions. It’ll give you a trigger to say how can you actually improve that? But you might also be making a positive contribution in another area. And that type of granularity actually in the taxonomies themselves allows us to look at what a company is doing across the whole spectrum of things and actually help them nudge towards progressively becoming more sustainable.

Clarissa Dann: Thanks very much.

Dr Rebecca Harding: Thank you.

Clarissa Dann: I’m Clarissa Dan, your presenter of Trade Finance TV. Thank you for watching.

Published on December 14, 2021

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