Five Davos take-aways on sustainability

    Five Davos take-aways on sustainability

    ALL eyes were on Davos last week where the annual World Economic Forum event brought together chief executives, politicians, leaders and opinion formers for the think-in amid the snow on the Swiss Alps. One measure everyone has agreed on (expect for the US president Trump) is the need to tackle climate change in a collaborative way and address the drastic changes facing the planet. Prince Charles called on business leaders to make the world economy more sustainable while teenage activist Greta Thunberg criticised inaction on the climate crisis. Amongst those attending the event was our Senior Managing Partner Patrick Odier, who featured on panel discussions around sustainable finance, the shifts in fintech and the future of innovative finance.

    Here are some of the key take-aways from the meeting:

    Economic models need to shift towards sustainability

    The urgency of combatting the climate crisis was highlighted by most attendees – from heads of state to leading CEOs, with a clear consensus on the call for capital to be shifted towards more sustainable practices and business models was loud and clear. Discussions also centered around the speed and scale of the transition towards a net-zero emissions, climate-resilient global economy.


    At Lombard Odier we believe this transition will create unprecedented opportunities in the coming years and have developed a proprietary, science-based approach to analyze transition risks and opportunities under different transition scenarios to gain a better understanding of expected returns. Patrick Odier – in meetings with clients and delegates – discussed Lombard Odier’s approach to identifying investment opportunities in an increasingly carbon-damaged and carbon-constrained world.

    There is a strong interest in developing public-private partnerships in Switzerland

    The Swiss finance minister Ueli Maurer gave the introductory keynote address at an event organised by Swiss Re on the future of projects involving both the state and private business. Despite the early start, the strong attendance showed the significant interest in the topic from delegates. “The opportunity to represent and promote Switzerland as a center of excellence on sustainable investment competencies in collaboration with our finance minister and major Swiss asset owners is attracting very positive feedback and interest, even at 7 am in the morning when it is -7°C outside," said Patrick Odier on the day.

    Capital is looking for a home

    There is money available for investment, once the right opportunity is there. An event hosted by Lombard Odier and the International Committee of the Red Cross (ICRC) focused on how innovative finance can help Generation Z, reflecting the key goal of the ICRC in improving education. At the event, which focused on impact investing and mobilizing private wealth for public projects, Patrick Odier said the key to moving capital is finding projects that can grow and, where that is the case, funding is available from different sectors. “Capital is ready to be mobilised. In the impact investing area, we see investors looking to allocate capital to investment projects that are clear, concrete and scalable. Funds from the public and private sector are ready to make a difference." Lombard Odier's Global Head of Philanthropy Maximilian Martin said: “Time and resources are scarce so it is important that we focus on the areas and opportunities where we can make the greatest contribution to innovation and impact."

    “Capital is ready to be mobilised. In the impact investing area, we see investors looking to allocate capital to investment projects that are clear, concrete and scalable. Funds from the public and private sector are ready to make a difference", shared our Senior Managing Partner Patrick Odier.

    Action needs to be focused and direct

    It is clear that the world urgently needs to move towards a Circular, Lean, Inclusive and Clean (CLIC) economic model – and the first steps are already underway, driven by a unified directionality across policy, the business world, consumers and investors. While this creates unprecedented opportunities to generate returns, Lombard Odier believes forward-looking, judgmental analysis is essential to properly capture the risks and opportunities of the transition for investors. At Davos, there’s been a clear consensus on the need to measure social and environmental outcomes with clear-cut indicators just as one gauges financial performance.

    Staying focused on the fundamentals

    The need for advice has never been greater. This month, we have seen the growth of what could become a major health crisis in China. This illustrates the importance of identifying and understanding the ‘unknowns’ - issues that may not be center-stage, but still present a significant risk to investors. At Lombard Odier, we believe it is our fiduciary duty to remain vigilant to these potential problems, ensure we have the relevant expertise and tools to assess them, and to protect our clients’ interests in turn. We aim to safeguard our clients’ wealth in the long-term with a far-sighted view - which is crucial to successfully navigate a transitioning environment.

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