LuxFLAG Sustainable Investment Week 2019 - Conference Report

The LuxFLAG Sustainable Investment Week 2019

www.luxflag.org / @LuxFLAGÂ / #LSIW19

#LSIW19

3 DAYS 16 Events 35+ speakers 475+ participants

The LuxFLAG Sustainable Investment Week was designed to raise awareness on sustainable finance through a series of 16 stand-alone events focused on various topics ranging from Climate Finance, Environment, Social and Governance (ESG) aspects to Impact Investing and the Sustainable Development Goals (SDGs).

Spread over three days #LSIW19 provided participants international platform for education and experience-sharing,

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The event would not have been a big success without the valuable support and involvement of all our partners, hosts and media partners.

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A word from LUXFLAG

Sachin Vankalas General Manager of LuxFLAG

Denise Voss Chairwoman of LuxFLAG

The main mission of the Luxembourg Finance Labelling Agency (LuxFLAG) is to promote sustainable finance.

Firstly, LuxFLAG supports the financing of sustainable development by providing clarity for investors through awarding labels to sustainable investment products which meet specific criteria.

Secondly, LuxFLAG facilitates dialogue, shares expertise and raises awareness on sustainable finance through its membership network. This leads us to the objective of the LuxFLAG Sustainable Investment Week (#LSIW). In our role as a leading European actor in promoting sustainable finance, we have launched #LSIW as a platform where our members and partners can showcase their commitment and concrete actions in the field.

The 2019 edition provided 16 stand-alone events, free of charge, focused on a wide range a topics, from climate finance and SDG investing to ESG reporting among others.

Financial professionals attending the event series were not only able to share what they currently do in the field of sustainable finance but also gained important knowledge on other market practices and recent policy developments.

As you may know, there is an urgent need to mobilise private capital to achieve the Sustainable Development Goals (SDGs). This can be done only through the participation of a variety of actors active in the value chain of financial services.

With Luxembourg being the largest fund centre in Europe, there is a great number of market playerts - ranging from asset managers to audit and legal firms - which play important roles in tackling specific topics regarding sustainable finance.

At LuxFLAG, we strongly believe that by gathering all these actors under one common framework, all the attendees of #LSIW benefit greatly from this opportunity.

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Participating HOSTs

Partners

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Media Partners

#LSIW19 in the PRESS

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#LSIW19 in the PRESS

MEDIA PARTNER

PUBLICATION

$Â 150,000.00

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#LSIW19 oN SOCIAL MEDIA

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LSIW19 - Opening session THIS SESSION WAS HOSTED BY LUXFLAG ON THE KBL PREMISES.

The first event of the LuxFLAG Sustainable Investment Week 2019 included a keynote speech by Luxembourg's Minister for Environment, Climate and Sustainable Development Carole Dieschbourg where she presented the country's ongoing initiatives to support sustainable finance as well as various other strategies designed to reduce greenhouse gas emissions, to achieve zero waste and to protect local drinking water.

In her speech Minister Dieschbourg highlighted the need for the public and private sectors to work together "to create trust and show good examples".

"WORKING FOR SUSTAINABILITY OPENS NEW OPPORTUNITIES" SAYS MINISTER DIESCHBOURG. The event also featured an insightful presentation on "Managing Water and Waste – what can the financial industry do about it?" delivered by Saurabh Sharma, Thematic Investment Director at Fidelity International.

Carole Dieschbourg Minister for the Environment, Climate and Sustainable Development

M r . S h a r ma h i g h l i g h t e d t h a t e c o n o mi e s w o r l d w i d e s t a r t t o p r o d u c e mo r e w a s t e , w h i l e u s i n g mo r e a n d mo r e w a t e r r e s o u r c e s , w h i c h c a u s e s i n f r a s t r u c t u r e p r o b l e ms . H e a l s o a r g u e d t h a t s u s t a i n a b i l i t y w a s a j o u r n e y f o r e v e r y o n e i n t h e industry,

During the presentation Mr. Sharma further stated that agencies play a critical role in checking whether businesses stick to what they declare in their annual reports.

Saurabh Sharma Thematic Investment Director Fidelity International

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"THERE IS NO ONE WAY OF DOING SUSTAINABLE IINVESTING," SAYS SAURABH SHARMA.

Trends in ESG integration in Private Equity THIS SESSION WAS HOSTED BY THE LUXEMBOURG PRIVATE EQUITY ASSOCIATION (LPEA) ON THE PREMISES OF SOCIÉTÉ GÉNÉRALE.

The Luxembourg Private Equity Association hosted a panel on the first day of #LSIW19 with Silva Deželan - Sustainability Director in Private Equity at ROBECO, Malvina Pau - ESG Manager at Amethis and Antje Biber - President at FERI Group, taking the market pulse of ESG implementation and talking about the current trends in the private equity asset class. Moderated by Aurélien Roelens Investment Director & ESG Coordinator at Cube Infrastructure Managers, the three panellists not only discussed about regulation and its impact on ESG adoption, but also addressed concrete operational challenges.

"If we want to make sure more money come into sustainable finance, we need to agree on a definition of what is environmentally sustainable," said Silva Dezelan Deželan, highlighting the increasing need for ESG data monitoring and reporting.

According to Antje Biber, when it comes to sustainability, "investors don't know what to invest in". She further argued that investors will play a key role in the future in demanding information and reporting on environmental and social issues, while Malvina Paul at Amethis outlined that General Partners have the opportuniy to be trendsetters in the field of sustainable finance.

"THERE IS A GROWING APPETITE FOR RESPONSIBLE INVESTING IN PRIVATE EQUITY," SAYS SILVA DEŽELAN.

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Lifting the veil of ESG disclosures THIS SESSION WAS HOSTED BY ARENDT & MEDERNACH.

Zuzanna Karas, Senior Associate at Arendt & Medernach and Antoine Peter, Senior Advisor at Arendt Regulatory & Consulting, delivered an insightful presentation on ESG disclosures on the first day of the LuxFLAG Sustainable Investment Week 2019.

The two speakers also presented the three main objectives of the European Commission's Sustainable Finance Action Plan, such as reorienting capital flows towards sustainable investments, mainstreaming sustainability into risk management as well as fostering transparency and longtermism.

Ms. Karas and Mr. Peter emphasised that market players in the financial services sector should not wait for the European Commission's proposal to be finalised in order to get started in sustainable finance.

They further argued that transparency and the disclosure of non-financial data are growing trends.

Looking into the future needs of investors, there will be an increased pressure from millennials, the two speakers added, "who are most likely to be sensitive to ESG factors when making investment decisions".

"UNDER REGULATORY AND INVESTOR PRESSURE ESG DISCLOSURES ARE BECOMING A KEY COMPONENT OF ASSET MANAGERS' COMMUNICATION PACKAGE," SAY KARAS AND PETER.

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Who drives the future of EU sustainable finance: Consumers, Providers, Managers or Policy?

THIS SESSION WAS HOSTED BY FIDELITY INTERNATIONAL.

Sanela Kevric, Sales Director at Fidelity International in Luxembourg, kicked off the event' s discussion by presenting the results of a recent survey regarding investor attitudes and expectations in the field of sustainable finance.

"Three quarters of Investors expect sustainable investing to become the norm, " she said, outlining that "personal values drive all investment decisions".

While "younger generations are bullish on sustainable investments, " data also indicates a lack of clarity among investors in what concerns standards and definitions. Sanela Kevric highlighted that "72% of investors are still confused about sustainable investing, " The event continued with a presentation on the current status of the EU Sustainable Finance Public Policy and the next steps which was delivered by Natalie Westerbarkey, Head of EU Public Policy at Fidelity International and a member of EFAMA'S ESG Committee, She explained that through the European Commission's s Action Plan on financing sustainable growth, the EU has set itself ambitious goals based on global initiatives.

The session concluded with a panel discussion between Sachin Vankalas, General Manager of LuxFLAG, Sanela Kevric, Sales Director at Fidelity International, Luca Romano, ESG analyst at Fidelity International, Natalie Westerbarkey, Head of EU Public Policy at Fidelity International and Saurabh Sharma, Thematic Investment Director at Fidelity International.

"BOARD DIRECTORS WILL HAVE TO ACQUIRE ESG-RELATED KNOWLEDGE," SAYS NATALIE WESTERBARKEY. 11

So you think you're green?

THIS SESSION WAS HOSTED BY LIST AT ABBAYE DE NEUMĂœNSTER.

The session hosted by the Luxembourg Institute of Science and Technology (LIST) provided insightful discussions on ESG ratings, green growth, the challenges of data and expectations from investors.

The first part of the event included a panel discussion on metrics for green finance which was moderated

by Dr. Enrico Benetto, from LIST, with the participation of Dr. Simone Quatrini from ETH ZĂźrich, Floriane Maman from GAMOW, and an OECD author on financing for the SDGs, as well as with Jean-Guillaume Peladan, General Manager at Sycomore Asset Management. The three panelists provided an engaging exchange of ideas and perspectives.

The second half of the evening was reserved for a presentation delivered by Dr. Thomas Gibon from LIST who talked about the hidden impacts of our investments.

These are three main take-aways from the event: Metrics matter: A good metric links financial data to environmental, social, and governance (ESG) impacts. In particular, the life-cycle assessment or the environmentally-extended input-output analysis fit candidates for a science-based assessment framework as they take into account the impacts through all the stages of a product's life.

ESG ratings were designed to assess the riskiness of investing in a company in terms of defaulting on debt and as such they are often not a good indicator of environmental impact or sustainability.

It is more difficult for ESG rating agencies to rate small and medium-sized enterprises than large companies, and their assessments often diverge. Standardisation of metrics would help align rating agencies' assessments.

"YOU NEED THE RIGHT METRICS TO BE ABLE TO MAKE THE RIGHT DECISION," SAYS JEAN-GUILLAUME PELANDAN. 12

How can I contribute to a greener planet: through savings in a sustainable way or working in sustainable finance?

THIS SESSION WAS HOSTED BY PWC LUXEMBOURG.

The second day of #LSIW19 started at PwC luxembourg where Nathalie Dogniez, EMEA ESG Leader, opened the floor for more discussions on sustainable finance.

In her speech, she outlined that 93% of EU citizens believe climate change is a serious problem and argued that "the contribution to sustainable development is multidimensional and goes beyond regulatory compliance".

The event continued with a panel consisting of five staff members at PWC Luxembourg - Matthieu Lauzier, Elena Ashley Emrick-Schmitz, Jan Rosetzky, Marius Pfeiffer and Chantal Genovese - who talked about the various ways in which they contribute to the development of sustainable finance, be it at work or in their personal lives.

The five panellists further talked about the work they do to advise clients in ESG data integration and risk management as well as their professional focus on climate change. Discussions also touched on the increase in demand for B2B products in sustainable finance and the insufficient level of investments made to meet all the global commitments that address climate change.

"Sustainable banks perform as well as non-sustainable banks", said Chantal Gerovese. during the panel, arguing that before a business makes a decision to invest in a certain sector, "it should know the market very well".

"THE CONTRIBUTION TO SUSTAINABLE DEVELOPMENT IS MULTIDIMENSIONAL AND GOES BEYOND REGULATORY COMPLIANCE," SAYS NATHALIE DOGNIEZ.

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Climate Change - Green Trends THIS SESSION WAS HOSTED BY DEGROOF PETERCAM ON THE PREMISES OF PWC LUXEMBOURG.

In her role as Responsible Investment Strategist at Degroof Petercam OphĂŠlie Mortier presented the drivers of environmental and climate change, highlighting that climate change is a systemic risk to be integrated as a fiduciary duty of any investor and that is should also be seen as a global opportunity for the long-term investor.

She further presented the ESG integration process and reporting and provided examples of innovative companies and financial instruments and products. "We have to reconsider how we use energy and food," she said.

In the second part of the event, Aldo Romani, the Head of Sustainability Funding at the European Investment Bank (EIB), presented the story behind the bank's green bonds, the standards used and the overall sustainability funding policy. The EIB created a dedicated Sustainability Funding team in September 2018.

"The EU and the EIB are tackling the lack of clarity in sustainable finance within the G20-framework." he said, arguing that "the EU Action Plan on Financing Sustainable Growth is redefining the framework of green lending and funding in the EU," Based on the event participation, 1000 trees were planted by Degroof Petercam as part of its "reforest action".

"THE EU TAXONOMY PROMOTES SUSTAINABILITY IN THE REAL ECONOMY," SAYS ALDO ROMANI. 14

SDG Investing - How to make the UN Sustainable Development Goals investible?

THIS SESSION WAS HOSTED BY UNION INVESTMENT ON THE PREMISES OF PWC LUXEMBOURG

The third morning session on the second day of #LSIW19 was kindly hosted by Union Investment Luxembourg. Following a welcome address by Managing Director Maria LĂśwenbrĂźck, the company's ESG analyst Jonas Weisbach provided an engaging presentation on the investment case for the United Nations' 17 Sustainable Development Goals (SDGs) .

These are three main take-away messages from the event: The UN SDGs are not only directed towards governments, but also towards private sector companies and the civil society. Hence, adding the SDG lense to an investment is key for holistic sustainable investing.

Besides the financing need, achieving the SDGs is also dependent on the provision of certain technologies, products and services. such as renewable energy or healthcare. The increased demand for solutions creates new viable business and investment cases.

Dialogue and engagement on the SDGs with companies are the cornerstone to foster the positive transition of business models and corporate behavior.

"NEW TECHNOLOGIES ARE NEEDED IN ORDER TO ACHIEVE THE SDGS," SAYS JONAS WEISBACH.

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ESG reporting the challenge of data THIS SESSION WAS HOSTED BY DELOITTE LUXEMBOURG.

As part of #LSIW19 Deloitte Luxembourg hosted event participants at their new premises at Cloche d'Or for a series of interviews focused on ESG reporting in the real estate sector, in private equity and in the asset management industry.

Following a welcome address by Julie Castiaux, Senior Manager at Deloitte Luxembourg, Real Estate Leader Lize Griffiths interviewed John Jones, Conducting Officer at Genesta, for a detailed discussion on ESG reporting in the field of real estate.

During their exchange, Mr. Jones outlined that real estate investors will certainly push for a more sustainable management in the future.

In the second part of the event, Arnaud Bon, Director at Deloitte in Private Equity, interviewed Aurélien Roelens, Investment Director at Cube Infrastructure Managers, about the current status of ESG reporting in private equity.

"There is a lot of trial & error in data collecting and processing," Mr. Roelens said.

In the last part of the event, Dario Zambotti, Director at Deloitte, sat down with Jérôme Bricart from Capital at Work for a lively exchange on ESG and the current reporting standards in asset management.

WE HAVE TO MAKE SURE HOW ESG DATA IS RETRIEVED AND CONTROLLED," SAYS JÉRÔME BRICART.

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Global warming, Climate change - How can we act?

THIS SESSION WAS HOSTED BY CANDRIAM AND THE LUXEMBOURG STOCK EXCHANGE.

The session hosted by Candriam Luxembourg and the Luxembourg Stock Exchange marked the 10th event of the 2019 LuxFLAG Sustainable Investment Week.

In her opening speech, Head of the Luxembourg Green Exchange and member of the Executive Committee Julie Becker argued that finance needs to be part of the solution that addresses climate change and outlined that the sustainable green bond market is currently flourishing. Given that sustainable finance still represents a small part of the securities markets, Ms. Becker emphasised that a change of mindset is necessary, Nicolas Deltour, Senior Investment Specialist Equities at Candriam, also delivered an insightful presentation on global warming, outlining a number of business cases which address climate change and mitigation.

He further stated that a major Co2 reduction would be possible by having increased efficiency in cars, factories and isolation solutions both in winter and during summer time.

"BEING SUSTAINABLE MEANS PROFITABILITYY AND LESS RISKS IN SOME RESPECTS," SAYS NICOLAS DELTOUR. 17

Role of Leadership in promoting sustainability THIS SESSION WAS HOSTED BY FARAD GROUP AT CERCLE MUNSTER.

The invitation-only event hosted by FARAD Group at the Cercle Munster marked the end of the second day of #LSIW19 and featured Natasha Lepage as a guest speaker.

Ms. Lepage did not only share with the audience her personal story but also talked about her experience as an activist for climate in Luxembourg. In her speech, she outlined the doubts and fears of the younger generations and proposed ideas that leaders can easily adopt in order to guide social and sustainable change.

At the end of the networking dinner, event participants were also encouraged to share best practices and talk about the obstacles they face in incorporating sustainable finance in their day-to-day business.

These are three main take-away messages from the event: No matter what our business is, trying to prevent climate change issues are imperatives that cannot be delayed any longer.

In Natasha Lepage's words - �Luckily there is quite a positive and growing global acknowledgement of climate-related issues. Unfortunately, it is the reaction that is still missing.�

It is a fact that our clients are the ones pushing for more sustainable financial products and, in many cases, companies are not ready. We have to invert this by demanding more from our products and services. No excuses left.

"LUCKILY THERE IS QUITE A POSITIVE AND GROWING GLOBAL ACKNOWLEDGEMENT OF CLIMATE-RELATED ISSUES " SAYS NATASHA LEPAGE. 18

How Aligning Portfolio and Climate Objectives THIS SESSION WAS HOSTED BY STATE STREET.

State Street Luxembourg opened the third day of #LSIW19 with a breakfast seminar dedicated to aligning portfolios and investments with climate objectives.

The goal of the session was for asset managers and asset owners to discuss how they deal with the equation of generating alpha, while respecting their environmental, social and governance (ESG) ambitions.

In his opening speech, David Suetens, Executive Vice President and Country Head for State Street in Luxembourg, outlined the importance of discussing with colleagues about sustainable finance and also emphasised the need "to do small steps".

The event further included a panel moderated by Ana Harris, Global Head of Equity Portfolio Strategists at State Street Global Advisors, with the participation of Charles Symons, Director and Responsible iShares in Belgium and Luxembourg at Blackrock, Veronique Chapplow, Investment Director Equities at M&G, and David Suetens, Executive Vice President and Country Head for State Street Luxembourg.

During the panel, Charles Symons emphasised that "sustainability is about offering optionality and bringing investors on the journey.�

"OUR ROLE IS TO PUSH THE NOT YET FOLLOWERS TO GET TO THE GREEN SPACE," SAYS DAVID SUETENS. 19

How ESG is CHANGING THE RULES FOR BANKS, FIRMS AND CORPORATES THIS SESSION WAS HOSTED BY LINKLATERS.

The session hosted by Linklaters provided an engaging discussion between the London-based Vanessa Havard-Williams, Partner and Global Head of Environment at Linklaters, and Hermann Beythan, Partner at Linklaters Luxembourg.

On the day Ms. Havard-Williams addressed the topic of regulation, talked about the EU taxonomy and provided valuable insight into what companies should look at next, especially with regards to transition finance.

These are three main take-away messages from the session: AIFMs, UCITS ManCo and MiFID firms providing portfolio management or advice will soon be required to comply with new EU regulations relating to sustainable finance.

The sustainable finance disclosure regulation is expected to be published in the OJEU before the year-end, with guidance due in 2020. Large firms to whom the regulation applies will need to comply within 15-18 months and everyone else within 3 years.

Firms will want to begin working through the implications of the incoming disclosure requirements promptly given the range of disclosure required on policies, the approach to ESG and products (e.g. anticipated impact on returns and the extent to which remuneration policies take account of sustainability considerations) and the need to put in place appropriate risk management and governance.

"START WITH GOVERNANCE AND RISK MANAGEMENT," SAYS VANESSA HAVARDWILLIAMS. 20

Investing in environmental solutions THIS SESSION WAS HOSTED BY BGL BNP PARIBAS AND BNP PARIBAS ASSET MANAGEMENT.

Capital markets will be shaped profoundly by global sustainability challenges, particularly climate change, environmental pollution, natural resource constraints, demographic and human capital issues such as diversity, inclusion and gender equity. These trends will drive growth for well-positioned companies and create risks for those unable or unwilling to adapt.

In this session, Justin Winter, Portfolio Manager at Impax Asset Management, not only took participants through the 20-year transformation of environmental markets towards sustainability, but also explained how to identify and invest in these mispriced opportunities, focusing on the BNP Paribas Aqua and BNP Paribas Climate Impact funds. He further presented a classification of environmental markets which includes new energy, water, sustainable food, agriculture and forestry, as well as waste resources recovery.

Nathalie Blanchet, Head of Sales at BNP Paribas Asset Management and Yves Nosbusch, Chief Economist at BGL BNP Paribas, also addressed event participants during the event.

Impax Asset Management, of which BNP Paribas Asset Management owns 25%, are specialists in the transition to a more sustainable global economy, with over 20 years of experience and â‚Ź16.2bn in assets under management as at the end of June 2019.

"GLOBAL TRENDS PROPEL LONG-TERM GROWTH IN WATER OPPORTUNITIES," SAYS JUSDTIN WINTER AT IMPAX ASSET MANAGEMENT. 21

Education in Sustainable Finance HOSTED BY THE LUXEMBOURG BANKERS' ASSOCIATION.

Hosted by the Luxembourg's Bankers' Association (ABBL) this session provided an overview of the many different learning opportunities available in Luxembourg in the field of sustainable finance for students, employees and board directors alike.

ABBL Advisor Fabio Mandorino and Cecilia Vernhes from Forethix kicked off the discussions with a short introduction of ABBL's working group on sustainable finance.

The event included presentations of the activities and courses proposed by a wide range of local institutions and organisations active in sustainable finance, The current chair of the Institut Luxembourgeois des Administrateurs (ILA) Carine Feipel presented the organisation's activities and focus on corporate governance, highlighting the training available to directors and board members.

Julie Bouchat from INFine presented the association's mission to strengthen knowledge and knowhow in inclusive finance.

StĂŠphanie Deltenre from Forethix provided an overview of the organisation's areas of expertise and talked about responsible investment, corporate responsibility and a responsible society.

Jank Schiltz from the Luxembourg School of Finance presented the Master in Wealth Management and the Master in Economics, both of which include large segments on sustainable and green finance, socially responsible investments and impact investments, Other speakers on the day were Benoit Pauly from the Luxembourg Stock Exchange who gave an overview of the training programmes developed for green bonds, Norman Fisch from INDR who talked about CSR and Denis Graas from the House of Training who presented the foundation training in sustainable finance currently on offer.

"SUSTAINABILITY COMES FROM THE TOP," SAYS CARINE FEIPEL AT ILA. 22

Conversion of a traditional fund to an ESG fund THIS SESSION WAS HOSTED BY ING LUXEMBOURG.

Dedicated to the conversion of a traditional investment fund into an ESG one, this session hosted by ING Luxembourg marked the end of the 2019 LuxFLAG Sustainable Investment Week.

Head of Portfolio Management Services Laurent Simeoni and Funds Specialist Richard Edwards shared ING Luxembourg' s current experience in sustainable finance, including the drivers, the techniques, the issues, the timing and the traps to avoid in order to preserve the track record of funds during and after conversion.

These are three main take-away messages from the event: ING Bank has an ambitious plan to reach 85% of SRI funds in its internal range of funds by the end of 2021.

ING Bank counts on a strong in-house track record on ESG screening and ESG model portfolio management.

ING Bank has defined a gradual approach to preserve the track record of their internal funds.

#SDG, #UNPRI, #SRI, #ESG...RICHARD EDWARDS SOLVES THE ALPHABET SOUP DURING THE #ING HOSTED CONFERENCE OF THE #LSIW19 ORGANISED BY @LUXFLAG TO SHOWCASE AND PROMOTE #SUSTAINABLEFINANCE IN #LUXEMBOURG. 23

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thank you!

W e w o u l d l i k e t o t a k e th i s o p p o r tu n i ty to th a n k a l l o u r p a r t i c i p a t i n g h o s t s , p a r t n e r s a n d m e d i a p a r tn e r s , a n d o f co u r s e a l l t h e p a r t i c i p a n t s w h o k i n d l y to o k o u t th e ti m e to a t t en d t h e L u X F L A G S u s t a i n a b l e I n v e s tm e n t W e e k 2 0 1 9 .

W e l o o k f o r w a r d t o w e l c o m i n g y o u to # L S I W 2 0 !

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www.luxflag.org / @LuxFLAGÂ / #LSIW19