Sustainable Finance Insight Journal Volume 1: Competency, Skills and Certification in Sustainable Finance

Welcome to Volume 1 of the new Sustainable Finance Insight Journal, ‘Competency, Skills and Certification in Sustainable Finance’. This first volume is the start of a new series that has taken inspiration from our long-running Impact Assessment Outlook Journal, now on its 19th Volume. The Sustainable Finance Insight Journal is the creation of our new Sustainable Finance Network, established in 2023. The Network is led by a 15-member Steering Group, which aims to enable the flow of information and knowledge sharing between investment and sustainability professionals in a way that helps address some of the most significant policy challenges concerning the natural environment, social inclusion and governance.

Each volume of the new Sustainable Finance Insight Journal will look at a different topic within the field of sustainable finance, with the first volume bringing together a collection of seven articles on the topic of competency, skills and certification, following on from a member webinar on the same topic in October 2023.

Simon Thompson (Chief Executive, Chartered Banker Institute and Chair, Sustainable Finance Education Charter) kicks off the journal by echoing the call of Mark Carney at COP26 to ensure that, ‘every professional financial decision takes account of climate change’. Simon goes on to explain the evolution of the world’s first Sustainable Finance Education Charter and stresses the importance of capacity and capability-building in the finance professions to mainstream sustainability-related skills and expertise.

In our second article, David Luck (Investment Banker and Chair of the IEMA Sustainable Finance Network Steering Group) reflects on his journey from investment banking into a sustainable finance career. He identifies the importance of upskilling finance professionals in sustainability as well as upskilling sustainability professionals in finance in the transition towards a financial system with sustainable outcomes.

Mark Browning (Director, Environmental Management and Sustainability, Jacobs) and Richard Coulthard (Sustainability Consultant, Jacobs) review a number of courses and certificates in sustainable finance and ESG and ask questions such as, ‘what courses currently exist to equip those working or planning to work in sustainable finance to be competent and informed on the topic?’ and, ‘is enough being done to ensure we have the right breadth of courses available?’. Their research identifies a variety of ESG-related courses which can assist those looking to upskill in sustainable finance; however, echoing David Luck’s article, there is clearly a question mark about the extent to which a short course or certificate can provide the depth of competence needed to be a sustainability professional.

The next two articles expand on the topic of expertise and focus on the concept of ‘competent experts’ and the importance of using appropriately qualified professionals to advise on specific aspects of sustainability. Eddie Smyth (Director, Intersocial and Chair of the IEMA Social Impact Assessment Working Group) looks at the importance of using competent experts to undertake the assessment of the social impacts of projects and programmes. This is particularly relevant to sustainable finance, since ‘social’ or ‘people’ is one of the three pillars of sustainability and represents the ‘S’ in ESG.

Then we move to considering health, with a trio of experts active in IEMA’s Health Impact Assessment working group. Dr Liz Green (Consultant in Public Health, Policy and International Health, Public Health Wales), Ryngan Pyper (Director, Health and Social Impact, RPS) and Lisa Nelson (Consultant, Health and Social Impact, RPS) present an article starting with a positive, explaining that health assessment is required under international standards such as the International Finance Corporation’s Environmental and Social Performance Standards and highlights their adoption by a large number of financial institutions as signatories to the Equator Principles. However, echoing Eddies Smyth’s concerns regarding the competency of those leading social assessments, the authors raise similar concerns with respect to the competence and capacity of those undertaking Health Impact Assessments in support of projects and investment portfolios.

In our penultimate article Aida Khalil Gomez (Senior Environmental and Social Specialist, IFC) and Charlotte Doyle (Associate Environmental and Social Development Specialist, IFC) set out a brief case study from the International Finance Corporation (IFC) and their interaction with sustainable finance and competent experts. The article explains that while it is well known that IFC was an early leader in sustainable finance with the introduction of the Environment and Social (E&S) Performance Standards in 2006 (updated in 2012) and their incorporation into the Equator Principles, what is less well known is the value IFC places on having access to competent experts internally.

Finally, we have a dose of hard truth from Professor Kim Schumacher (Associate Professor in Sustainable Finance and ESG, Kyushu University), in an excerpt from a recent interview. The originator of the phrase, ‘competency greenwashing’, Kim outlines its implications and discusses the need for the captains of industry to face up to the realities of a transition to sustainability.

I look forward to seeing more volumes of this new Sustainable Finance Insight Journal being published over the coming years, bringing insights from practitioners to IEMA’s members and other professionals interested in the development of policy and practice in sustainable finance.

Download a copy of the Outlook Journal here.

If you are interested in being involved in IEMA Sustainable Finance Network or joining a working group, IEMA members can email [email protected] to express an interest.

Rufus Howard

Policy and Engagement Lead at IEMA, IEMA

Dr Howard is the policy and engagement lead for Impact Assessment at IEMA and a leading professional in EIA, with two decades of international experience across renewable energy and major infrastructure.