Tanguy Claquin is the very model of a modern environmental banker. The head of sustainable banking at Crédit Agricole CIB is a climate scientist with training in atmospheric physics. He knows what he’s talking about.
Claquin is an obvious fit for Crédit Agricole, which was founded as a financing cooperative for French farmers and branded itself as the green bank long before consulting firm Oliver Wyman announced that there could be $150 billion of fees on offer in the next 10 years from sustainable finance.
This year’s shift towards social investing at the partial expense of environmental funding has complicated the hiring calculation for firms that want to burnish their sustainability credentials and get a piece of this new revenue pie. It won’t be as simple as just hiring some climate scientists who can reconcile themselves to working in finance.
This year’s shift towards social investing… has complicated the hiring calculation for firms that want to burnish their sustainability credentials and get a piece of this new revenue pie
Jon Macaskill
Environmental, social and governance (ESG) investing developed momentum by finding ways to screen against undesirable actions, such as polluting. This has led to a compliance culture in much of the emerging ESG industry, which must sorely tempt senior executives at banks and asset managers to simply rebrand some of their compliance staff, perhaps as sustainability ambassadors – a term adopted by German chemicals and consumer goods firm Henkel, the maker of that icon of sustainability, Persil.
Credit Suisse recently appointed its former chief compliance officer Lydie Hudson as head of a new sustainability function and other banks will no doubt make similar moves.
It would certainly seem like a win-win project to retrain some of the legions of compliance staff banks hired in the wake of the 2008 financial crisis to perform a function that can be portrayed as socially desirable and might even contribute some revenue, rather than just acting as a cost centre and dampener of the animal spirits of traders.
Instant credibility
But there is another way to develop instant ESG credibility, as the recent hiring by asset manager Brookfield of Mark Carney demonstrates.
Carney is the central banker’s central banker, as a former governor of both the Bank of Canada, and – until March – the Bank of England. He also worked at Goldman Sachs and is widely acknowledged to be one of the best-dressed financiers of his or any other generation, with comparisons often made to Sean Connery’s original movie incarnation of James Bond.
Carney established himself as one of the central bankers paying the highest profile attention to sustainable financing developments while at the BoE; and now he has been rewarded with a job as head of ESG and impact fund investing at Brookfield.
This match is also an obvious fit for Brookfield, the Canadian firm that started in real estate investing and with $550 billion under management is now the second-biggest alternative asset manager in the world after Blackstone.
“Mark will help accelerate our efforts to combine better long-term outcomes for society with strong risk-adjusted returns,” said Brookfield chief executive Bruce Flatt, in a press release that showed a keen understanding of social trends by coyly describing Carney’s one-time employer Goldman as “a leading investment bank.”
A targeted hire like Claquin may be able to deploy expertise in a narrow field, such as climate science, but Carney has an ability to project deep understanding of anything he talks about.
This will surely prove to be a more valuable long-term proficiency as the ESG market matures and finally delivers meaningful financial impact for its investors and evangelists.
