Hamburg summit event unites science, practice and politics
- Nov 24, 2023
- 6 min read
Review of the conference on 14 November 2023 in Hamburg
A lot is happening in Hamburg as a center for sustainable finance. The approximately 140 conference participants who made their way to the Hamburg Chamber of Skilled Crafts on November 14, 2023, likely reached a similar conclusion. The conference "Sustainability Reporting and Impact: Regulation, Measurement, Impact" took place there. It was organized under the leadership of the Sustainable Finance Research Group at the University of Hamburg and carried out in cooperation with the Sustainable Finance Science Platform, the Sustainable Finance & Climate Protection joint project, and the Finance City Hamburg initiative . The event was part of the multi-week program of the 7th Sustainable Finance Summit of the Green and Sustainable Finance Cluster Germany (GSFCG).
"Our goal is relevant research for stakeholders in policy and practice," emphasized Alexander Bassen (University of Hamburg), representing the host academic community, in his welcoming statement. Appropriately, GSCFG Managing Director and Sustainable Finance Summit patron Michael Schmidt announced in his welcoming address the intention to work even more closely with the Sustainable Finance Academic Platform in the future. The cooperation between the cluster and the academic platform was recently formalized in a Memorandum of Understanding and aims to further strengthen the bridge between theory and practice in the field of sustainable finance.
Impact topic is making progress
Despite progress, Timo Busch (University of Hamburg) still sees a great need for discussion on the impact of sustainable investment products. In the first academic presentation of the day, he used various examples to demonstrate that a uniform understanding has emerged in the definition of different impact categories. The decisive criterion is whether an investment has a direct sustainability impact ("investor impact"). If this is the case, it is referred to as an impact-generating investment; if not, the term "impact-aligned" is used. Even the European Securities and Markets Authority (ESMA) refers to this differentiation with the terminology "buying impact" and "creating impact." However, in many sustainability dimensions, uniform standards for quantitatively measuring impact, for example in the area of biodiversity, are still lacking. Busch and his fellow researchers have summarized the current state of his observations in a white paper .
Coordinated engagement measures offer another opportunity for investors to improve the sustainability performance of their portfolio companies. In his presentation, Michael Schmidt (GSFCG) discussed various possibilities for collaborative engagement and demonstrated that this can also take place beyond shareholder meetings and ideally results in an ongoing dialogue at various company levels.
The last two presentations of the morning focused on expectations. Christian Klein (University of Kassel) reported on findings from his research on the sustainable investment behavior of private clients. Among other things, he observed that the majority of retail investors investing in sustainable financial products expect their decision to make a measurable contribution to achieving sustainability goals ("impact generating"). Concluding the first part of the event, Marcus Küster (HAUCK AUFHÄUSER LAMPE PRIVATBANK) provided a snapshot of the mood among the foundations and high net worth individuals client segment.
New requirements for disclosure and transparency
After the first part of the event focused on the sustainability impact of various asset classes and the associated expectations of different investor groups, the focus after the lunch break was on disclosure and reporting obligations for companies in the financial and real economy. Banks, in particular, are currently facing the challenge of having to comply with various regulatory changes simultaneously. In order to make the desired contribution to a successful transformation, the regulatory framework, which is largely set at the EU level, must meet the criterion of coherence, emphasized Torsten Jäger (Association of German Banks) in his keynote speech.
Banks could soon benefit from a much better availability of standardized sustainability data. As part of the Corporate Sustainability Reporting Directive (CSRD), more and more companies operating in the EU are gradually being required to collect and disclose relevant data in accordance with the European Sustainability Reporting Standards (ESRS). Three EFRAG members directly involved in the development of the standards, Kerstin Lopatta (University of Hamburg), Simon Braaksma (Royal Phillips NV), and Allesandro d'Eri (ESMA), discussed the potential of the new EU framework. All three expressed optimism that the standards can deliver the necessary impact – despite the materiality analysis, which many perceive as a significant weakening.
Many small and medium-sized enterprises (SMEs) are already affected by the new EU regulations, even if they themselves are not yet required to report. Supply chains and customer relationships mean that many SMEs are already required to collect and provide sustainability data. Although this presents a considerable challenge, Kati Beiersdorf (DRSC), Michaela Ölschläger (Hamburg Chamber of Commerce), Alexander Bassen (University of Hamburg), and Teresa Haller-Mangold (Nexperia) demonstrated in the afternoon's second panel discussion that addressing the topic of sustainability also opens up opportunities for companies. Despite the tense economic situation, it is primarily those companies that addressed the issue of sustainability early on that are now succeeding in successfully positioning themselves in a competitive environment with increased regulatory requirements.
Investment market: Which information really helps?
After examining the question of how sustainability data is generated from a variety of perspectives, the concluding panel discussion, moderated by Jan Schulte (Tagesspiegel Background Sustainable Finance), addressed the question of what benefits different investor groups could derive from increased transparency. Following keynote statements from the four panelists, Georg Schürmann (Triodos Bank), Jegor Tokarevich (Substance Over Form), Roland Kölsch (QNG/FNG Seal), and Nahid Ghulami (MSCI), it quickly became clear that sustainability plays an important role in various market segments, but that it remains difficult to create a comprehensive and objective basis for evaluation. Ultimately, the panelists agreed that the requirement for a perfect information basis will be difficult to fulfill and that, in many cases, a more in-depth examination of the evaluation methodology is required. This is easier for institutional investors because they have access to the relevant resources and expertise.
In his concluding remarks, Hamburg's Finance Senator Andreas Dressel correctly anticipated that the redirection of private capital flows could soon become even more important, as the Federal Constitutional Court declared the redirection of coronavirus loans to the Climate and Transformation Fund unconstitutional. He praised the development of Hamburg as a center of sustainable finance and hopes that even more experts will soon be on hand to support the transformation in the Hanseatic city. Municipal companies, such as the Hamburg Transport Association, also face the challenge of mobilizing the capital necessary for the transition to climate neutrality.
In his farewell remarks, a very satisfied host, Alexander Bassen, thanked all the speakers and co-organizers, the enthusiastic audience, and especially Signal Iduna and Finance City Hamburg for their financial support of the event. The discussions and presentations demonstrated at many points that academia can still make a valuable contribution as a facilitator of the transition—especially when it engages in regular dialogue with practitioners and policymakers.
List of input lectures and panel discussions
Prof. Dr. Timo Busch (University of Hamburg): “Impact Investments: What we (don’t) know”
Michael Schmidt (Green and Sustainable Finance Cluster): “How do we advance engagement?”
Prof. Dr. Christian Klein (University of Kassel): “What impact do private investors expect?”
Marcus Küster (HAUCK AUFHÄUSER LAMPE PRIVATBANK): “Impact expectations of foundations and HNWIs”
Torsten Jäger (Association of German Banks): “The Transformation of the Financial Sector — Banks in the Tension Between Ambition and Regulation”
Panel discussion: EU perspectives on sustainability reporting
Prof. Dr. Kerstin Lopatta (EFRAG SRB, Vice Chair, University of Hamburg)
Simon Braaksma (EFRAG, Senior Director, Royal Philips NV)
Alessandro d'Eri, PhD (EFRAG, Senior Policy Officer, ESMA)
Moderator: Prof. Dr. Alexander Bassen (University of Hamburg)
Panel discussion: How does sustainability come into the SME sector?
Dr. Kati Beiersdorf (DRSC)
Dr. Michaela Ölschläger (Hamburg Chamber of Commerce)
Prof. Dr. Alexander Bassen (University of Hamburg)
Dr. Teresa Haller-Mangold (nexperia)
Moderation: Prof. Dr. Laura Edinger-Schons (University of Hamburg)
Panel discussion & 5-minute statements: More transparency and consumer information in the investment market
Georg Schürmann (Triodos Bank): “The ESG scale of the SFB”
Yegor Tokarevich (Substance Over Form): “EETs for alternative investments”
Roland Kölsch (FNG Seal): “The World of SRI Labels”
Nahid Ghulami (MSCI): “ESG Ratings and Screenings”
Moderation: Jan Schulte (Tagesspiegel Background Sustainable Finance)
Dr. Andreas Dressel (Hamburg Finance Senator, Hamburg Finance Authority): Concluding remarks
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