Will London remain the leading financial centre, using data and ESG to counteract the Brexit effect?

Paul Allard Paul Allard Aug. 19, 2019

Paris can still position itself and maybe even take a leadership position.

 
London is acting

With a few acquisitions, the London Stock Exchange (LSE) is acting quickly to ensure the City remains the leading financial center in Europe and in the world after Brexit.

On August 1st, it announced the acquisition of Refinitiv, a leader in financial information that will allow it to compete with Bloomberg. And just a few weeks ago, the LSE concluded the strategic acquisition of the French start-up (!) Beyond Ratings, specialized in ESG analysis, in order to position itself in this unavoidable trend of responsible finance.

It is interesting to note that beyond the good intentions and the big statements, London is doing everything to maintain their European and world leadership.

 

Paris is talking about it

In Paris, there was the promise of Bruno Le Maire to make "Paris the first financial marketplace of Europe" at the International Finance Forum in July 2018.

There is also Philippe Zaouati, head of the investment firm Mirova, who argues that Paris must be the capital of green finance in his book "Green finance begins with Paris.", published in 2018.

But are the main stakeholders of the City of Lights really doing everything they can to make Paris appear in pole position of the european financial centres?

 

Impact is the future of Finance

In November 2018, Larry Fink, Chief Executive Officer of BlackRock, said: "In less than five years, every investor will measure the social and environmental impact to evaluate their investments. "

He adds, "To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.

The leader of the largest asset manager in the world had just defined that the future of finance would be impact.

 

And so the big fish have started to swim ahead

Proof that the future of Finance will only be sustainable: London is positioning itself, buying data suppliers, index or ranking suppliers in sustainable finance,  but they are not the only ones.

 

  • Moody's acquires French Vigeo Eiris in July and American Four Twenty Seven in August 2019

  • ISS acquires Swedish Ethix SRI Advisors in 2015, Swiss South Pole in 2017 and German Oekom in 2018

  • Standard & Poor's buys Trucist in 2016

  • Morningstar acquires 40% of Canadian-Dutch Sustainalytics in 2017

 

Today, the majority of data providers in sustainable finance are controlled by US and UK interests.

So what do we do in France?

Will we stick to words and forward-facing statements?

"As often is the case, there are many great principles and speeches" 1.

Ambitions are high but actions are sparse while the rest of the world is moving ahead .

 

1. Laurence Valentin, member of the French Association of Corporate Treasurers.

 

Paris leader in Impact Finance?

If Paris wants to become the first European financial centre post Brexit, it can only do so by taking a global leadership in Impact Finance, and it is not too late to do so.

Indeed, Paris has many important assets:

The adoption in 2010 of the "Grenelle Laws" making mandatory the production of an annual CSR report for all large companies has favored the development of an entire ecosystem related to extra-financial measures and responsible investment.

The 2016 Paris Agreement on Climate legitimized Paris as the place of the future of Finance.

But much remains to be done and, like the major players in the City, Paris must act.

 

The solutions

Be it  the establishment of a universal and transparent non-financial accounting, a greater distribution to the citizens of well-identified "impact" investment products or the adoption by Paris Europlace and Euronext of an impact index (the logical next step in responsible investment) and thus doubling the LSE, the opportunities are numerous and the initiatives must be ambitious!

As French Prime Minister Edouard Philippe said on July 9th, during the Paris Europlace Forum: "Whoever succeeds in imposing his values will impose his vision. For us, it's a fight."

 

Paul Allard,

Co-founder

impak Finance Inc.

 

 

About impak

The French-Canadian start-up in financial technology impak Finance was founded to rethink the role of money to repair the economy and the planet.

Active in France, it has developed a reporting and impact monitoring tool (impak IS²), which shows the overall impact of a company and monitors it, using impact measurement indicators, a matrix and its impak score. It offers investors standardized and comparable qualitative and quantitative data, a dashboard (including the analysis and the impak score of portfolio companies) and an index for the investor's portfolio wishing to monitor its social and environmental impact . impak IS² is based on the 17 Sustainable Development Goals of the UN and the Impact Management Project (IMP), an international collective of more than 2,000 key players who defined standards of management and impact measurement .

 

 

 

 

 

 


Paul Allard
President and Chief Ecosystem Officer Paul Allard


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