Understanding Responsible Investment podcast S2E1: What is Europe’s ambition for sustainable finance?
Dorothée Chapuis: Hello and welcome to the second season of our podcast “Understanding Responsible Investment” , which come to grips with sustainable finance and its impact on our behaviour as investors. In this first episode, we’ll tell you about Europe’s ambition for sustainable finance. I'm Dorothée Chapuis, Head of CSR for Societe Generale Private Banking Europe. Today I am joined by Catherine Volkoff, TITLE at Societe Generale Private Banking. Welcome, Catherine! And thank you very much for coming to talk to us about Europe’s regulations on sustainable finance. Before we start, could you tell us about your role?
Catherine Volkoff: Thank you Dorothée for inviting me. Quite simply, my role is to make sure that private bankers and all the support functions perform their duties in compliance with regulations, and that clients are protected. For that, it is essential to fully understand the regulations we must observe which, as you know, Dorothée, are numerous and complex.
Dorothée Chapuis: So let’s talk about the European regulations on sustainable finance: what are the key features?
Catherine Volkoff: It’s quite a challenge to talk about such a broad topic in just a few minutes, but I’ll do my best! Let’s start with the aim of these regulations. They're are part of the wider programme called the “European Green Deal”. There’s not enough time to go into all the details, but this deal is essentially the European Commission’s roadmap for the environment, with an impact on many economic sectors, including the financial sector. The objective of these regulations is to redirect capital flows towards what are deemed sustainable investments, thereby financing “green” activities, which are activities that contribute significantly to mitigating climate change.
Dorothée Chapuis: Thank you Catherine, that's very clear. I guess the thinking among European regulators is that the more we invest in “green” activities, the more activities considered unsustainable will be disregarded — is that right?
Catherine Volkoff: Yes, that’s right. The idea is to give investors the information they need to invest in activities that meet their sustainability preferences — and with full transparency. Increasingly, investors want to be actors of change. This brings the regulators to the conclusion that, to meet this need, savings product providers will gradually move away from investments in unsustainable activities in favour of activities that are sustainable.
Dorothée Chapuis: Ultimately, the regulators’ reasoning is similar to what we saw with organic food: higher demand meant more organic products offered by distributors, thereby further developing organic farming.
Catherine Volkoff: Yes, it’s a close analogy. I would add that a number of conditions were met to make sustainable finance regulations a success. First, the regulators defined what exactly constitutes a “green” activity. Then they established the framework for real transparency on the sustainable characteristics of products. Finally, they required savings product providers, banks, and financial advisers alike to respect the sustainability preferences of their investors.
Dorothée Chapuis: Yes, that makes sense. And if I continue the analogy with organic food, you have to start with the specifications of what is an organic product. Only if those specifications are met can producers and distributors call their products “organic”, allowing the consumer to buy their organic product with complete confidence. The difference is that investing in a savings product is not as easy as going to the grocery shop or the supermarket!
Catherine Volkoff: Quite right, Dorothée! That’s why financial advisers are now required to explicitly ask their investor clients questions in order to define their preferences regarding sustainable finance.
Dorothée Chapuis: If I am an investor, what kind of questions will I be asked? Will I be asked if I want to invest in the environment or in social matters, for instance?
Catherine Volkoff: No, not exactly. Your private banker will need to collect your preferences on the following three approaches: the global sustainable investment approach, which doesn't have a particular theme in terms of sustainability ; the environmental sustainable approach, which favours “green” activities related to the environment only ; the third approach takes into account the negative effects of investment decisions on various sustainability factors. Of course, all proposed investments must respect your choices.
Dorothée Chapuis: Ah, I see. These preferences complete the investor’s profile. With that, a big thank you for introducing us to the topic of European sustainable finance.
Catherine Volkoff: My pleasure, Dorothée. See you soon.
Dorothée Chapuis: See you soon. In the next three episodes, we will dive deeper into the three approaches Catherine mentioned. You have been listening to the second episode of the second season of our series on sustainable investment. This podcast is brought to you by Societe Generale Private Banking. You’ll find it on Spotify and Apple Podcasts though our channel “#PrivateTalk by Societe Generale Private Banking”. Subscribe to be informed of the release of the next episode... and tell people about us! You'll find the full series on the Societe Generale Private Banking website at www.privatebanking.societegenerale.com. Until next time!
(1) The four other areas covered by “green” activities are: using sustainably and preserving water and natural resources, protecting and restoring biodiversity and ecosystems, preventing pollution, and transitioning to a circular economy.
Would you like to discuss this subject further with us?
The information contained in this video/audio content is for informational purposes, may be modified without notice, and is intended to communicate information that may be useful for decision-making. Any information on past performance reproduced does not guarantee future performance.
Changes in inflation, interest rates and exchange rates can have negative effects on the value, price and income of investments denominated in a currency other than that of the investor. Any simulations and examples contained in this publication are provided for illustrative purposes only. This information may be modified in response to market fluctuations and the information and opinions contained in this publication may change. No Société Générale Private Banking entity undertakes to update or modify this publication, which may become obsolete after having been viewed/listened to, and will not assume any responsibility in this regard.
The scenarios presented are estimates of future performance, based on past information on how the value of an investment varies and/or current market conditions, and are not accurate indications. The return obtained by investors will have to vary according to the market performance and the duration of the investment’s retention by the investor. Future performance may be subject to tax, which depends on the personal situation of each investor and is likely to change in the future.
For a more complete definition and description of risks, please refer to the product prospectus or, where applicable, to other regulatory documents (if applicable) prior to any investment decision.
The offers related to the activities and financial and financial information mentioned in this vaudio content depend on the personal situation of each client, the legislation applicable to them and their tax residence. It is the responsibility of the potential investor to ensure with his legal and tax advice that he complies with the legal and regulatory provisions of the jurisdiction concerned. This video/audio content is not intended in any way to be broadcast/listened to in the United States, either to/by a U.S. tax resident, or to/from a person or jurisdiction for which such broadcast would be restricted or illegal.
Offers related to the activities and financial and wealth information presented may not be adapted or authorised within all Société Générale Private Banking entities. In addition, access to some of these offers is subject to certain eligibility conditions.
Certain offers related to the activities and financial and wealth information mentioned may present various risks, involve a potential loss of the entire amount invested or an unlimited potential loss, and therefore be reserved only for a certain category of investors, and/or be adapted only to knowledgeable investors eligible for these types of offers.
Before any investment service, financial product or insurance product is subscribed, as the case may be and as applicable legislation, the potential investor will be questioned by his private banker within the Societe Generale Private Banking entity of which he is a client about his knowledge, his experience in investment matters, as well as his financial situation including his ability to bear the losses, and its investment objectives including its risk tolerance, in order to determine with it whether it is eligible to subscribe for the financial product(s) and/or the investment service(s) envisaged and whether the product(s) or service(s) Investment is/are compatible with its investment profile.
The potential investor should also (i) be aware of all the information contained in the detailed documentation of the proposed service or product (document entitled “key information for the investor”, prospectus, regulations, articles of association, document entitled “key information for the investor”, Term sheet, information notice, contractual conditions, etc.), in particular those related to the associated risks; and (ii) consult their legal and tax advice to assess the legal consequences and tax treatment of the proposed product or service. It is recalled that the subscription of an investment service, a financial product or an insurance product may have tax consequences and Société Générale Private Banking does not provide tax advice. His private banker will also be at his disposal to provide him with further information, to determine with him whether he is eligible for the envisaged product or service which may be subject to conditions, and whether he meets his needs.
Consequently, no entity reporting to Société Générale Private Banking may under any circumstances be held responsible for any decision taken by an investor based solely on the information contained in this video/audio content.
This audio content is confidential, intended exclusively for the person who consults it, and may not be communicated or brought to the knowledge of third parties, or reproduced in whole or in part, without the prior written consent of the Société Générale Private Banking entity concerned.
The Societe Generale group maintains an effective administrative organisation taking all necessary measures to identify, control and manage conflicts of interest. To this end, Societe Generale Private Banking entities have put in place a conflict of interest management policy to manage and prevent conflicts of interest. For more details, Societe Generale Private Banking clients can refer to the conflict of interest policy available on request from their private banker.
Societe Generale Private Banking has also put in place a policy for handling complaints made by its clients, which is available upon request from their private banker or on the Société Générale Private Banking website.
SPECIFIC WARNINGS BY JURISDICTION
France: Unless expressly stated otherwise, this document is published and distributed by Société Générale, a French bank authorised and supervised by the Autorité de Contrôle Prudentiel et de Résolution, 4, place de Budapest, CS 92459, 75436 Paris Cedex 09, under the prudential supervision of the European Central Bank (“ECB”) and registered with ORIAS as an insurance intermediary under number 07 022 493 orias.fr. Société Générale is a French public limited company with capital of €1,046,405,540 as of February 1, 2022, with its registered office located at 29 boulevard Haussmann, 75009 Paris, and with a unique identification number of 552 120 222 R.C.S. Paris. More details are available on request or at www.privatebanking.societegenerale.com.
Luxembourg: This document is distributed in Luxembourg by Société Générale Luxembourg, a public limited company registered with the Luxembourg Trade and Companies Register under number B 6061 and an authorised credit institution governed by the Commission de Surveillance du Secteur Financier (“CSSF”), under the prudential supervision of the European Central Bank (“ECB”), whose registered office is located at 11 avenue Émile Reuter – L 2420 Luxembourg. More details are available on request or at www.societegenerale.lu. No investment decision of any kind could result from reading this document alone. Société Générale Luxembourg accepts no responsibility for the accuracy or other characteristics of the information contained in this document. Societe Generale Luxembourg accepts no responsibility for the actions taken by the addressee of this document solely on the basis of this document, and Societe Generale Luxembourg does not present itself as providing advice, This includes investment services. The opinions, views and forecasts expressed in this document (including its annexes) reflect the personal opinions of the author/authors and do not reflect the opinions of other persons or of Société Générale Luxembourg, unless otherwise stated. This document was prepared by Société Générale. The CSSF has not carried out any analysis, verification or control over the content of this document.
Monaco: This document is distributed in Monaco by Société Générale Private Banking (Monaco) S.A.M., located at 11 avenue de Grande Bretagne, 98000 Monaco, Principality of Monaco, governed by the Autorité de Contrôle Prudentiel et de Résolution and the Commission de Contrôle des Activités Financiers. Financial products marketed in Monaco may be reserved to qualified investors in accordance with the provisions of Law No. 1.339 of 07/09/2007 and Sovereign Order No. 1.285 of 10/09/2007. More details are available on request or at www.privatebanking.societegenerale.com.
Switzerland: This document is distributed in Switzerland by SOCIETE GENERALE Private Banking (Suisse) SA ("SGPBS"), whose head office is located at rue du Rhône 8, CH-1204 Geneva. SGPBS is a bank authorised by the Swiss Financial Market Supervisory Authority (“FINMA”). Collective investment schemes and structured products may only be offered in accordance with the Federal Law on Collective Investment Schemes (Collective Investment Schemes Act, CISA) of 23 June 2006, respectively, the Guidelines of the Swiss Bankers Association (SBA) on investor information on structured products. Further details are available on request from SGPBS or at www.privatebanking.societegenerale.com.
This document is not distributed by the entities of the Kleinwort Hambros Group acting under the brand name “Kleinwort Hambros” in the United Kingdom (SG Kleinwort Hambros Bank Limited), Jersey and Guernsey (SG Kleinwort Hambros Bank (CI) Limited) and Gibraltar (SG Kleinwort Hambros Bank (Gibraltar) Limited). Consequently, the information provided and any offers, activities and financial and wealth information presented do not concern these entities and may not be authorised by these entities or adapted in these territories. Further information on the activities of Societe Generale’s private banking entities located in the territories of the United Kingdom, the Channel Islands and Gibraltar, including additional legal and regulatory information, are available at www.kleinworthambros.com