Sustainable finance? A journey to take together

Accompany value chain players through the complexity and accelerate the process of integrating ESG¹ criteria within the financial world. This is the role that asset & securities service providers have the opportunity to carve out for themselves in a period in which sustainability is striving to become a variable of equal value and cogency compared to the canonical economic metrics.

"Slawomir Krupa, CEO of the Societe Generale group”, recalls Marco Mosca on this point, "has repeatedly underlined the centrality of this topic materialized in the 300 billion euros allocated by the Group to sustainable finance in its 2022-2025 plan".^2,3

Coming more specifically to your business, what moment is the sustainability journey experiencing?

The most accurate word to define the context is without doubt complexity, even if we must never use it separately from opportunity. As Europeans, we are always very busy regulating, and the path that began in 2021 with the SFDR⁴ has seen the addition of Taxonomy and CSRD⁵, to name just the most relevant regulatory initiatives.

All these directives represent verticals that impact horizontal regulations such as UCITS, MIFID and AIFMD . With what consequences this matrix is composed is a question that persists for the operations of all European players in the asset management and consultancy industry.

The position of asset managers and asset owners is, in fact, median with respect to an evolving regulatory framework and a request for certainty and good governance of ESG products by the client base. Creating a range of products suited to the needs of the market while at the same time complying with a series of often partially misaligned regulations is not at all simple, and this is where securities servicers come into play with a great opportunity to create value.

How?

Firstly, by explaining the critical issues of the moment, in which the consistency of data regarding sustainability and the plurality of existing methodologies for finding and interpreting it complicate players’ job on ESG criteria.

Today, we live in a world where the canonical financial parameters have a character of certainty. That is, investment instruments can now rely on homogeneous economic data, but this has not always been the case. The current state is the result of a long refinement process that is still in its infancy with regards to sustainability and is where we are directly committed to innovating.

How is your collaboration with the players in the value chain characterised in this context of complexity?

Our choice is different from that of most of our competitors. We present ourselves as a one-stop-shop capable of bringing the requested data to the client in an integrated way. This guarantees total alignment of portfolios in post-trading. A clear example of this approach, which will be better explained in our conference at the “Il Salone del Risparmio 2024”, consists of two very important players that are part of our service offer: Clarity AI, a global data analytics tech company mainly focused on listed securities, and Greenscope, which specialises in the unlisted sector and was also born within a start-up incubator supported by Societe Generale together with public bodies.

Monitoring of ex-ante ESG limits, financial and regulatory reporting, management of voluntary corporate actions and integration of sustainability into securities lending services are examples of services that we already offer to our clients, and which are the result of certainly important innovations, but ones that must be considered as a stage of a journey we are undertaking in partnership with our clients.

Marco Mosca
Head of Coverage, Marketing and Solutions for Societe Generale Securities Services in Italy