I work on integrating sustainability into finance: in other words, trying to make finance a force for good — researching, publishing, speaking at conferences, and engaging with other finance professionals.
Our purpose [at Imperial] is to find solutions in mainstream capital markets to address the challenges posed by global climate change through climate-finance research and active thought leadership.
I work with academics at all levels, and people who work part-time in the centre, and part-time in business and industry. I teach postgraduate students on the MBA and M.Sc. finance-suite programmes. I’ll be leading a sustainable-finance programme in April next year — a new elective for MBA students here, which I ran last year at Cambridge.
It’s a growing thing to offer these courses as stand-alone programmes which can be taken as part of degree courses. There’s some way to go before sustainability is integrated into the overall curriculum, and there’s a debate about whether that’s the right way forward. Within a broad MBA programme, you learn all sorts of things, from organisational behaviour and marketing to corporate finance; so it may be hard to integrate sustainability into every single module, as opposed as a stand-alone offering. Maybe it should be a core part, instead of an elective part.
At S&P Global Ratings, I was Senior Research Fellow in charge of sustainable-finance research at the organisation globally — from origination and collaboration to public dissemination; and, at Cambridge, I was a visiting lecturer in sustainable finance on the Master’s in Finance programme. At Imperial, those roles become one, focusing specifically on climate finance and investment rather than sustainable finance.
Working at S&P Global as a credit-ratings analyst focused on the power sector, I realised climate-change policies would impact on the ability of power-generating companies to remain credit-worthy in the long run. That led me to research the topic of environmental and climate risk from a corporate-exposure perspective, which, in turn, led me to looking at broader sustainability issues.
People are genuinely interested in what I do. Most understand sustainability and its importance, though there’s a general lack of understanding how sustainable finance works: transforming finance to align with goals of sustainability, like decarbonising. Meeting sustainable-development goals, eradicating poverty, improving healthcare and education . . . if you can show how your money is impacting in those specific areas, that’s powerful, but it needs to be explained to people. It’s not a shame. It’s just the way things are.
It’s relatively new as a study topic or professional practice. The subject isn’t new, but how it interfaces with finance is: what you’re investing in, and what the consequences of your investment are. Sustainable finance as a concept is only seven years old; so I didn’t have any specific training, but I do have an MBA in finance, and did courses in topics related to sustainability, such as carbon-trading and markets. It’s a mixture of academic study and learning on the job.
I read modern languages at Bristol, and spent a year abroad in the Ivory Coast and Peru, and started to write about their political issues. As I was being published, I went to journalism school and was apprenticed to papers in the west of England and Reading. I moved to a business publication covering the water industry, and got more interested in the finance. I also really wanted to work in the City; so I became a financial analyst, which was exciting and fulfilling.
I ended up being asked by Cambridge, UCL, and King’s to lecture about finance, and, after I had been in one company for 30 years, it was time for something different and to give something back to the younger generation. They pay for their courses themselves, and it’s not cheap; so it’s rejuvenating to be in front of a dynamic set of people who want to learn — and I learn from them, because they come with work experience in a variety of fields.
I believe sustainable growth is possible. In fact, in some countries, economic growth, as measured by GDP, is no longer correlated with growth in harmful greenhouse-gas emissions. Economic growth needs to be redefined away from consumption of resources without due regard for the damage this causes — so-called externalities — for it to be truly sustainable.
Most efforts in sustainable finance are genuine. That’s not to say that “greenwashing” doesn’t happen, but, when it does, it’s quickly called out by the intense scrutiny from industry bodies, standard-setters, regulators, the media, NGOs, and activists.
The issue of unintended consequences of transitioning to a low or net-zero economy is very real; so policymakers aim to introduce principles behind a “Just Transition”, in which no one in society is disadvantaged unnecessarily by efforts to mitigate climate change.
This inherent conflict is being addressed by many corporations focusing on meeting the needs of all stakeholders — consumers, employees, suppliers, and so on — not just shareholders. Stakeholder capitalism, based on broader values than maximising profits, has become more popular among large multinationals, driven by investor focus on ESG (environmental, social, and governance), and underpinned by the UN Sustainable Development Goals.
There are clearly vested interests in enterprises that directly or indirectly cause climate change, such as oil and gas companies and coal miners, but the increased recognition that things need to change by the general investing community — especially the younger generation — has led to fundamental shifts in approach in policy and investment decision-making.
To do the right thing can be costly, but there are the negative consequences of doing the wrong thing: companies who pollute or emit a lot of greenhouses gases are subject to regulatory constraints which can be expensive. As policy framework gets tighter and tighter, consequences can be quite punitive. Then there’s changing consumer preference. Behaving in an irresponsible manner, or running your company in an unsustainable way . . . the chances are the demand for your products will fall. Seeing the light, you can hope for it, pray for it, but pragmatically, changing corporate behaviour needs something tangible; so that’s where policy and regulation come in.
I was largely brought up by my Spanish mother and her family and friends in rural south Oxfordshire. She emigrated to the UK in the 1960s, and became a health-care worker. Roman Catholicism was very much part of my childhood upbringing and it’s left a strong impression on me.
During Easter Week in Seville, when I was about ten, I heard an unaccompanied and passionate chant — a saeta — sung to a statue of the Virgin Mary from a balcony during a street procession. This heartfelt and powerful expression of pain and sorrow at Christ’s sacrifice left a deep spiritual mark which I’ve never forgotten. While I’m no longer a practising Catholic — I now attend Anglican services — I still hold strong traditional values associated with Catholicism, but I’ve also developed broader thinking about what being a Christian is about.
I’ve always been interested in starting up a micro-brewery, but now is not the right time.
I enjoy sport — running, cycling, swimming; music, especially Flamenco music, and also going for long walks in the country with my family and dog, Byron, a brown cocker-spaniel. I’m happiest when I’m relaxing in the country or by the coast with family and friends.
I love the sound of birdsong in the summer or the sound of waves crashing on the shoreline.
I hope that my children are able to lead happy and fulfilling lives. I’m encouraged seeing how much the young have influenced the outcome of COP — not just by activism, but more by their engaged and integrated approach in delivering their thoughts and voice to the world’s leaders and negotiators. They’ve gone beyond protesting to pinpointing things that need to be done and giving positive solutions. We’ve gone a step forward in the way they can influence older generations.
COP27 will be remembered for its historic success on establishing a loss and damage fund to help the world’s most vulnerable nations cope with the impact of climate change. It’ll also remain tinged with disappointment at the lack of progress made on emission reductions.
I pray most for the health and happiness of my family and friends.
I’d choose to be locked in a church with my Spanish godmother, who died 12 years ago. She first introduced me to Christianity, and helped to guide me spiritually.
Michael Wilkins was talking to Terence Handley MacMath.