THE GLOBAL PANVEST FORUM 2023
Tackling the subject of Climate Investing - The Biggest Opportunity of our Lifetime was the topic for our Third Global Panvest® Forum held in Singapore in front of a full house of institutional investors, family offices and other asset owners.
Below we share the key insights and takeaways from our forum held in September; a gathering of thought leaders, experts, and visionaries dedicated to addressing the critical challenges and opportunities in climate investing and sustainable finance.
Climate investing is not just a matter of choice; and is something that investors ignore at their own peril. While the impact of investments may vary from one perspective to another, the undeniable fact is that climate change is real and poses significant risks and opportunities to global economies.
AN OVERVIEW FROM THE SPEAKERS
We were privileged to have Deputy Managing Director (Markets and Development) Sing Chiong Leong from the Monetary Authority of Singapore (MAS) deliver the forum’s keynote address, which shed light on the pivotal role MAS has as an ecosystem builder. He highlighted MAS's strategies to catalyze Asia's net-zero transition, emphasizing that this endeavor is driven by a shared commitment to the planet's well-being.
Some of the strategies included:
Stress Testing: Ensuring financial institutions are resilient to climate risks.
Regulatory Practices: Embedding sound regulatory practices to promote sustainability.
Engaging Financial Institutions: Encouraging financial institutions to adopt net-zero transition plans.
Working Collaboratively: Recognizing the need for regional cooperation in the absence of unified government actions in the region and beyond.
Sing Chiong Leong also touched upon the importance of digital identification for tracking sustainability data, a concept that has been in development with key stakeholders over the last three years.
While various key actors such as philanthropies, funds, pension funds, and institutions are pursuing various climate goals, the efforts remain fragmented. The biggest and most positive take-away from MAS was on building the ecosystem in Singapore and the region with the opportunity to create a blended finance platform to unite everyone for greater impact in green and transition finance.
Carbon Credits and Voluntary Carbon Markets
Rajesh Sundaresan, Co-Founder of Carbon Impact Capital, provided valuable insights into the world of carbon credits. He stressed that while carbon credits are often criticized as greenwashing, they represent a significant investment opportunity that benefits many.
Rajesh addressed several critical points:
The Size Of The Market: The current carbon credit market is relatively small at $2 billion, but the potential is in the trillions.
Complexity and Challenges: The carbon credit market is characterized by complexity, varying pricing schemes, and a lengthy verification process.
Critical Issues: Key issues include measurement and verification challenges, additionality concerns, and the need for proper regulations.
The Opportunity to Help: Carbon credits can play a vital role in helping the underserved population and financing projects that mitigate climate change.
The Urgency of Action: Time is of the essence, and Rajesh emphasized the need to use all available tools, including incentives, policies, and reserves, to address climate change.
This was followed by a panel with Zhuo Cheng from the World Bank, Simon Chadwick from Akaria Capital and Anshari Rahman from Gen Zero who helped to address some of the more prescient issues facing all participants in the voluntary carbon market both from a top down and project level perspective. What is clear, is that the industry is still in a nascent stage of development, and will require greater harmonisation of practices to achieve the same liquidity, transparency and confidence relative to other financial markets. Panarchy Partners believes that carbon markets, especially voluntary markets, have the potential to play a key role in the road to decarbonisation and will be keenly following its progress.
The Climate Impact of Listed Companies - Checks & Balances
The Power of Listed Companies was the next topic tackled by Panarchy Partners’ team members Wei Xiong Loh, Ajay Mirchandani and Kaia Tan. This broadly encompassed the team examining the voluntary disclosures relating to climate related opportunities on CDP, one of the largest and most well known climate disclosure reporting platforms in the world and arriving at their key conclusions and potential opportunities.
With over 4400+ publicly listed companies that disclosed to CDP, more than 2400 of them (54%) shared with CDP a monetary value related to climate related financial opportunity that amounted to $8.1 trillion. The team undertook a “deeper dive” with a shortlist of 188 companies with $6.1 tn of climate related financial opportunity. The team then concluded with two examples of potential company ideas demonstrating the powerful use of data to find opportunities in climate investing.
This was followed by a dynamic panel discussion moderated by Teymoor Nabili with CDP's Managing Director for Asia Pacific Donald Chan, Terrascope's Head Of Sustainability Lia Nicholson and Client Earth's disputes attorney Elizabeth Wu on Climate Impact Checks and Balances. The panel's discussion focused on the industry's move from simply just disclosure and reporting to increased transparency and accountability and how Asia operates differently from Europe.
A recurring theme throughout the panel was the necessity for convergence and collaboration. The sustainability landscape is marked by diverse datasets and methodologies, making it challenging for investors and stakeholders to navigate. Efforts are underway to harmonize climate-related disclosures such as ISSB and TCFD, ultimately improving transparency, consistency, and accountability.
Equity Investors and Climate Impact
Founding Panvestor, Munib Madni, set the stage by sharing Panarchy's take on the evolution of financial capital with climate risks and opportunities. He shared how the universe of investing strategies are required to become climate conscious with some being outright climate focused. To finish off he shared with the audience what it potentially means to be a climate conscious Vs climate-focused investment strategy and the challenges in creating authentic climate investments.
Our Forum concluded with a panel discussion, "Are investment strategies delivering returns with impact?" by panelists: Wolfgang Klemm Head of Sustainability at Seviora, Sugandhi Matta Chief Impact Officer at ABC Impact and Egon Vavrek a long-term EM fund manager.
The panel explored the challenges and opportunities in delivering returns with climate impact. While the industry is evolving, the road to proving both financial returns and impact remains a challenge, particularly in the context of listed equity investments. Yet, the potential to align values with financial goals will continue to drive interest in climate investments.
The Path Forward
The Global Panvest Forum underscored the urgency of addressing climate change and the tremendous opportunities for impact and returns in climate investing. As investors and stewards of the planet, we have a pivotal role to play in shaping a more sustainable future. We are at a critical juncture in the journey towards a more sustainable future and The Global Panvest® Forum served as a catalyst for meaningful discussions that will shape the future of climate investing.
We encourage you to reach out if you have any questions, suggestions, or thoughts on these crucial topics. Together, we can continue to drive positive change and make a meaningful impact on the world.