Sandrine Salerno: ‘Sustainable finance needs more collaboration, less competition’

Sustainable finance has had a tough time of late. Following its meteoric rise, environmental, social, and governance investing (ESG) – finance’s biggest trend – has come under attack for over-promising and under-delivering, with everyone from right-wing US politicians to Elon Musk weighing in to point out its flaws and contradictions.

But for Sandrine Salerno, executive director of Sustainable Finance Geneva, the non-for-profit association championing the sector and organiser of the Building Bridges summit kicking off on Monday 3 October, the backlash is a sign that the fledgling sector is finally growing up. “That the principles of ESG are being questioned, is completely normal,” she says. “It shows maturity on this theme.”

With ESG still suffering from a massive bout of growing pains, the finance sector has a huge task on its hands to show that it can step up to the world’s urgent environmental and social challenges – and effectively measure companies’ impact along the way. To achieve this, there needs to be “much more collaboration”, says Salerno – not easy for an industry built around competition.

Switzerland’s answer is its annual Building Bridges conference, a joint initiative, launched in Geneva in 2019 by Swiss public authorities, the finance community, the United Nations and other actors including SFG “to accelerate the transition to a global economic model aligned with the sustainable development goals (SDGs)”.

Now into its third edition – the second overseen by Salerno – the conference has also experienced some growing up of its own. Last year almost became an exercise in crisis management after the Covid-19 variant Omicron crashed the party, prompting Swiss authorities to impose new health restrictions just days before the summit.

The event nevertheless managed to draw a large crowd, with attendance expected to almost double to around 1,500 this year, bringing together professionals from financial institutions but also politicians, entrepreneurs, academics, and international development actors from Switzerland and abroad.

Geneva – with the skills and resources of its different professional communities – has the ecosystem to foster collaboration, argues Salerno. And yet, even here, “a lot of institutions are still working towards their own goals”, she adds. “What we need is the capacity to put the right people around the table and be able to start talking and find solutions.”

By the “right people”, this means ensuring that these conversations are not only taking place between actors from rich nations but that they also include developing and least developed countries most vulnerable to climate change and other humanitarian emergencies, and where sustainable investment is needed the most.

“What we need – and I think it's one of the assets of Geneva or Switzerland – is to create a place where we can re-integrate that discussion with the ‘global south’ or emerging countries. That’s what we are missing right now,” Salerno says, speaking at a panel on 29 September organised by Geneva Solutions on the future of international Geneva.

Siloes also need to be broken within organisations, she adds, and also among the different fields of the finance universe itself. “Specialisation is a strength but it is a problem when dealing with a systemic problem.”

Amid the different fields that make up Geneva’s ecosystem – from humanitarian aid and development to global health to human rights – finance has always been a bit of an outlier. But already, Salerno sees this changing on both sides of lake Geneva where the international quarter and the private sector reside.

NGOs, the UN and other international organisations, for their part, have become more finance-savvy and begun to establish or collaborate with greater intensity on initiatives that incorporate innovative financing models and that help to advance their work. The International Committee of the Red Cross’s  humanitarian impact bond, in partnership with Lombard Odier and other financial institutions, is one example.

“I think synergies between different ecosystems will accelerate. Firstly because we have begun to put in place the tools and communication channels – like Building Bridges – that will allow these synergies and for collaborations to accelerate.”

And secondly, she points out, because the problems these different sectors are facing – whether it's a humanitarian organisation or an insurer having to factor extreme weather events or biodiversity loss into their business models – are beginning to converge.

Building Bridges week will take place from 3 to 6 October.