Ahead of his speech at the FIX EMEA Trading conference on 18 September 2020, Paul Tang MEP gives his insights into the rise of environmental, social and governance (ESG) as a focus point amongst grassroots investors and the management of capital markets firms.
Dan Barnes Welcome to Trader TV, I’m Dan Barnes. Joining me today is Paul Tang, MEP, who’s going to be giving a speech, looking at the EU’s legislative program, to make the financial sector a force for good in our transition towards a socially, environmentally sustainable economy. This is going to be at the FIX EMEA Trading Conference on the 18th of September. Paul, welcome to the show.
Paul Tang Good to be here.
Dan Barnes Why will people want to hear your speech on the day? Was the context around it?
Paul Tang Well, recently, I had a discussion with a bank, and at the end of the conversation, I asked, ‘how do you see ESG? How important is that for you?’. And they said, ‘oh, no, it’s extremely important! It’s a mega trend.’ And I felt a bit relieved because megatrend sounds like an important trend, and of course, it is. If you think about this time, we need to recover and we need to become sustainable in the broad sense of the world. So what we do now has to be double effective. That’s the aim, at least in the European Parliament and in the European Union. Crucial for that is, of course, the financial sector, how do we direct investment towards sustainability while at the same time recovering?
Dan Barnes And do you think that there’s a grassroots drive from investors of these asset managers as well as a top down drive from the management, from asset managers and brokers to achieve these goals?
Paul Tang There are front runners that really take on board the broad concept of sustainability, environmental, social. There are smaller financial institutions, smaller banks that don’t feel they have the capacity. And at the same time, there’s a large group of players that are still finding their way, I would say, but also looking at the front runners showing the way forward.
Dan Barnes And Paul, what do you hope will be the outcome of your speech?
Paul Tang So far, sustainability has very much focused on measuring and indeed there’s still a problem there; there are many standards with many outcomes, so we need the standardization of standards as the first step. But what I would like to see that after that step, comes a very important step, and that requires engagement by financial investors, asset managers, pension funds, insurance to change also the way the corporates work. It’s not just any more about profit. It’s about people and the planet. What service do you bring to our society? What’s the purpose of the company? And that requires a much broader change. We already see the rhetoric and we need to put those words into action and that is the agenda for years to come.
Dan Barnes That’s been great. Thank you very much.
Paul Tang You’re welcome. Hope to see you on Friday.