CSR In Financial Services

SDGs as a framework for impact investment 🌎 The SDGs offer a universal reference point, but their utility for investors depends on how well they can be translated into actionable themes. Phenix Capital’s SDG–Impact Investing framework bridges this gap by mapping each goal to specific investment domains. This mapping reframes the SDGs not as abstract targets, but as investment-relevant categories — from financial inclusion and circular economy to clean transport and climate mitigation. It enables clearer capital deployment pathways within complex global agendas. Rather than treating all goals uniformly, the framework recognizes variance in capital flows. Goals such as SDG 7 (Clean Energy), SDG 9 (Industry & Innovation), and SDG 11 (Sustainable Cities) have attracted the largest volumes of committed capital, reflecting both maturity and scalability. Themes tied to social inclusion (e.g. access to education, gender lens investing, affordable housing) remain underfunded despite their structural relevance to long-term development and systemic resilience. Environmental goals are addressed through themes like ocean preservation, sustainable agriculture, water efficiency, and biodiversity — areas where alignment with regulatory and disclosure frameworks is increasingly critical. Blended finance and technical assistance (SDG 17) are positioned not as peripheral tools but as enablers to accelerate private capital participation in frontier markets and early-stage solutions. By aligning investments to themes rather than goals alone, the framework helps clarify intentionality, guide impact measurement, and strengthen portfolio coherence across multiple mandates. This approach is not just a classification exercise — it is a necessary step in moving from broad commitments to capital strategies that are both scalable and aligned with global outcomes. #sustainability #sustainable #business #esg #SDGs #impact #investment

📊 Exciting new research from the European Central Bank (ECB) sheds light on how banks are pricing climate risk in their lending practices! 🌿 In their working paper, Carlo Altavilla, Miguel Boucinha, Marco Pagano, and Andrea Polo combine euro-area credit register data with carbon emission information to uncover fascinating insights into the intersection of finance and climate change. 🏦 The study finds that banks are indeed factoring climate risk into their lending decisions. Firms with higher carbon emissions face higher interest rates, while those committed to reducing emissions enjoy lower rates. Interestingly, banks that have publicly committed to decarbonization goals (through initiatives like Science Based Targets initiative) are even more aggressive in this pricing strategy. 💶 But here's where it gets really intriguing: the researchers uncovered a "climate risk-taking channel" of monetary policy. When the ECB tightens monetary policy, banks not only increase their overall credit risk premiums but also amplify their climate risk premiums. This means that during periods of monetary tightening, high-emission firms face a double whammy of increased borrowing costs and reduced access to credit compared to their greener counterparts. The authors argue that while restrictive monetary policy may slow down overall decarbonization efforts, it inadvertently creates a more favourable environment for low-emission firms and those committed to going green. 🌍 These findings are crucial for understanding how the financial sector is adapting to climate change and how monetary policy interacts with climate-related financial risks. It's also clear that the greening of finance is not just a trend, but a fundamental shift in how risk is assessed and priced in our economy. #ClimateFinance #SustainableBanking #MonetaryPolicy #ECB #GreenEconomy #ClimateRisk

🚨 New data for sustainable finance! 🚨 The Climate Bonds Initiative (CBI) Social & Sustainability Bond Dataset Methodology is here! 🌍📊 This update strengthens the CBI approach to screening bonds, featuring: ✅ An enhanced assessment framework for greater transparency ✅ Comprehensive mapping of Use of Proceeds (UoP) to better align with sustainability goals ✅ More flexibility in UoP to foster impactful financing 🌱 Whether you're an investor, issuer, or policymaker, this methodology supports a more robust and credible sustainable bond market. 🔍 Explore the full methodology and understand what’s changing. 🔗 Full press release: https://lnkd.in/gAuXv-wC 📩 For more details, reach out to Carlotta Michetti, Sustainability Methodologies Manager at Climate Bonds Initiative: carlotta.michetti@climatebonds.net #SustainableFinance #GreenBonds #ESG #ClimateAction

🌱 Most impact investors think success is about picking the right deals. It’s not. The best don’t just fund companies—they build ecosystems where great companies can thrive. Yet, I’ve watched investors pour millions into promising ventures, only to see them stall, struggle, or collapse. Why?Because they invest in businesses instead of founders, chase feel-good metrics instead of scalable impact, and assume capital alone drives growth. The top 0.1% of impact investors operate differently. Here’s how: 1️⃣ They Invest in Founders, Not Just Companies A strong founder can pivot through uncertainty, make asymmetric bets, and scale impact beyond initial funding. A weak one? No amount of capital will fix that. 🔹 Pattern Recognition → The best investors filter for resilience, adaptability, and second-order thinking, not just vision. 🔹 Investor-Driven Growth → They don’t just fund businesses; they mentor, challenge, and unlock critical networks. 🔸 The Insight? The smartest investors back the same founders multiple times—because talent, not ideas, compounds over time. 2️⃣ They Prioritize Systems Over Stories Many investors are seduced by narratives. The best ones fund scalable operating models. 🔹 Impact Without Revenue Is Charity → If impact isn’t self-sustaining, it’s not an investment—it’s a donation. The best investors push founders to validate their economics before their mission. 🔹 Repeatable Execution Wins → Strong businesses scale impact through operational discipline, not just vision. 🔸 The Insight? The best impact startups raise from both VCs and impact funds—because they position themselves as high-growth businesses where impact is a function of scale. 3️⃣ They Engineer Competitive Advantage Capital alone doesn’t scale businesses. Market access does. 🔹 Strategic Positioning Beats Capital Injection → The best investors don’t just deploy funds—they create industry positioning, regulatory access, and partnerships that accelerate scale. 🔹 Distribution Is the Ultimate Moat → The strongest investors aren’t just backers—they are network architects who shorten growth cycles through key introductions. 🔸 The Insight? The best investors don’t find deals—they build them. The highest ROI isn’t in writing checks; it’s in removing barriers to exponential growth. 📌 The Hard Truth Most impact investors are just philanthropists with a risk appetite. They fund potential, not sustainability. The real winners treat impact investing like a business that needs to scale, not a cause that needs to survive. Now Your Turn: What’s the biggest misconception you’ve seen in impact investing? Let’s build real insights in the comments. 👉 Follow Ben Botes for more insights on Leadership, Scale-ups and Impact Investment.

In yesterday's post on the FCA's Diversity and Inclusion consultation, I questioned whether their proposals (which largely reduce DEI to demographic diversity statistics) would improve customer welfare. Here I discuss the FCA's second goal of improving the UK's international competitiveness (by increasing talent from underrepresented groups). All of yesterday's concerns continue to apply. 1. The proposals focus on very narrow aspects of diversity - what can be measured, not what's important. Other sources of underrepresentation are: a. Socioeconomic background, given the power of wealth and contacts. b. Regional background. Even a different accent can affect whether you get a job, or how seriously you are taken by colleagues or clients. c. Personality type. How often is someone not hired or promoted because they're said to be not aggressive or assertive enough? 2. What matters is not just diversity but inclusion: whether minorities can thrive rather than just having jobs. A minority could be a bully; a white male could be a mentor. Moreover, additional concerns apply here. 3. Targets undermine merit. If a company has announced a target for (say) senior women, and a woman is promoted out of merit, colleagues and clients may think she was promoted to meet the target. I was once approached to apply for a board position because it needed to increase its “number of non-white faces”. 4. Targets are divisive. They can create divisions in a company and worsen culture because one party benefits at the expense of others. A white male may believe he has limited promotion prospects and thus be less motivated. More broadly, the focus on symptoms, not problems, has missed a real opportunity to address the underlying causes of lack of diversity. Taking gender diversity in fund management as an example, a significant hurdle to women becoming portfolio managers is that the major promotion decision (from analyst to PM) typically occurs when many women have children. Most women take extended parental leave, but men rarely do. If a woman is overlooked for promotion pre-kids, her earnings may have fallen significantly behind her partner’s post-kids. The family dynamic may either dissuade her from returning to work, or require her to bear more childcare responsibilities after returning, hindering promotion. Even if a woman has made PM prior to leave, there are still barriers. When one PM was on leave for more than six weeks, her employer ended her CF30 approval (part of the FCA’s Approved Persons regime at the time) leaving a gap in her track record. Track record is crucial in fund management, affecting her client inflows, ability to launch a new fund, and likelihood of being assigned to a bigger fund. My response to the consultation is below, which I hope is helpful to both the FCA and also companies and investors interested in diversity. https://lnkd.in/eWgkd8qz.

I don’t actually work in finance. I work in trust. Without it, capital markets collapse. Clients walk away. Careers end in minutes. I've watched brilliant finance professionals destroy their careers in minutes.   Not because they lacked technical skills, but because they crossed ethical lines they didn't fully understand.   The CFA Institute Code of Ethics stopped me cold when I first read Standard III.A:   "Members must act for the benefit of their clients and place their clients' interests before their employer's or their own interests."   Before your employer. Before yourself. Always.   In an industry built on conflicts of interest, this isn't just radical. It's revolutionary.   The standards create crystal-clear boundaries: → Market manipulation? Prohibited. → Client suitability? Mandatory assessment. → Conflicts of interest? Full disclosure required. → Material nonpublic information? Can't touch it.   But what really struck me was Standard V.B.5: "Distinguish between fact and opinion."   In a world drowning in financial noise, this simple requirement changes everything.   200,000+ CFA charterholders worldwide have sworn to uphold these standards. Not suggestions. Requirements.   When everyone else chases commissions, you're bound to put clients first.   When others blur the lines, you maintain clear boundaries.   When the industry rewards complexity, you're required to communicate clearly.   Finance without ethics is just sophisticated gambling with other people's money.   But finance with a moral compass? That's how you build trust that compounds over decades.   The Code doesn't make you rich overnight. It makes you trustworthy for life.   And in finance, trust is the only currency that never depreciates.   Every time you're tempted to cut corners, remember: Your reputation takes decades to build and seconds to destroy.   The real edge in finance isn't finding the next alpha. It's earning trust and keeping it. Now, since we are on LinkedIn, I have a question for you: Are today’s finfluencers held to the same ethical standards as CFA charterholders? Should they be?   PS. If you made it this far, ♻️ share this with your network and 🔔 follow my profile!

🚀 Thrilled to share my latest piece with ImpactAlpha: “Innovative Finance Initiative’s fund designs for radical impact” — co-authored with the brilliant Erinch Sahan of the Doughnut Economics Action Lab (DEAL). Over the past decade, we’ve seen impact investing and sustainable finance gain serious momentum. But here’s the uncomfortable truth: despite this growth, our social and ecological crises have only deepened. Why? Because most financial tools have tried to fit into traditional systems, rather than transform them. It’s time to reimagine. We’re calling this next chapter Impact Investing 3.0—a refresh that moves us from tweaking systems to building new ones, rooted in accountability, inclusion, and regeneration. 🌱 A major piece of this shift? Fund design. Too often, we start with structure—10 year closed end fund, equity investments, etc. —and retrofit the mission. What if we flipped that? What if fund managers designed structures from the ground up, starting with purpose? We lay out a five-part framework for how fund managers can unlock deeper, more transformative impact: 🎯 Purpose – Anchor the fund in a regenerative investment thesis. Think long-term stewardship, not short-term shareholder value. 🧱 Structure – Embrace vehicles beyond the usual suspects. Open-ended funds, permanent capital, and blended finance can provide the flexibility impact needs. ⚖️ Incentives – Align manager comp and investee terms with real impact—not just IRR. 🗳️ Governance – Include the voices of those most affected by investment decisions. 🔁 Exit – Redesign exits to preserve impact: employee ownership, community buyouts, or even self-liquidating structures. This draws on the best of Adventure Finance, Doughnut Economics (Kate Raworth), and Marjorie Kelly’s vision for economic redesign. And it’s already happening: check out innovators like Purpose Economy, Fair Capital Partners, Prime Coalition, Citizenfund Brussels, and Apis & Heritage Capital Partners. 💡 If we’re serious about transformative change, our capital must reflect it—from structure to strategy. 📰 Read the full article on ImpactAlpha (link below) and join the conversation at the Innovative Finance Initiative (link also below). Let’s build the next generation of funds—designed for impact, not just returns. #ImpactInvesting #FundDesign #InnovativeFinance #ImpactAlpha #DoughnutEconomics #Investing3point0 #RegenerativeFinance #SystemsChange

How does a company with 1000 people end up with fewer than 20 Black people or less than 10% women? It’s called “diversity debt” — the idea that if your company consists primarily of a specific type of person by hire number 10, it’s basically impossible to get representation back on track. No one wants to be a DEI hire. When we were recruiting for Chezie, a company with an explicit mission to build more diverse and equitable workplaces, we knew we couldn’t fall into this trap. We had to figure out how to promote fair recruiting practices from day 1. Here’s what we did: 1. Encouraged all to apply: We know long lists of requirements can scare people off, so we made sure to include a note encouraging candidates to apply, even if they didn’t check every box (pictured below!). More and more companies are doing this these days, which we love to see. 2. Posted clear compensation ranges: Transparency is huge for us, so we shared salary and equity details upfront in every job posting. This keeps us accountable and helps us avoid perpetuating pay gaps. 3. Standardized the application process: Every candidate went through the same @Airtable form with screener questions, which made sure we evaluated based on qualifications, not biases. 4. Sourced diverse candidates: We intentionally reached out to underrepresented communities. For example, we used Wellfound’s diversity feature filter to invite people directly to apply. 5. Accommodations-Ready: Before interviews, we asked candidates if they needed any accommodations because everyone should feel comfortable and supported during the process. You can hire for merit and make your process more inclusive at the same time. I promise. As the founder ecosystem becomes more diverse, I think more founders will prioritize building teams the right way. For any founders hiring or who’ve recently hired, what did you do to build equity into the process? #recruiting #startups

This week, Bank Negara Malaysia revised its Policy Document on Personal Financing for fairer outcomes for consumers and more responsible borrowing practices. Here are three things you should know: 1️⃣ ❌ Flat rate and Rule of 78 for personal financing loans 🙅🏻♂️🙅🏻♀️ • Rule of 78 penalises early loan settlers by front-loading the interest portion • Starting 2027, banks MUST offer personal financing products under a reducing balance method (some are already doing this) • This means that those who settle their personal finance loans early will save more 2️⃣ Clearer disclosures • Banks must clearly disclose effective interest rate and total repayment amount to consumers 3️⃣ Those taking personal loans of more than RM100,000 must undergo a financial education module For clarity, this applies for personal loans, which excludes housing, vehicle, and credit cards (See Para 3.2 for more details). All of the above start 1 January 2027. This is a win for consumers in Malaysia! If you have time this weekend, do give the document a read while sipping your ☕️! ——- 👋🏼 Hi, I’m Jian Wei. In my day job, I help make central banking relatable. All views expressed are my own. Been a little quiet of late due to health-related incidents. Trying to find my footing again. ♻️ If you think others can benefit, do repost 📑 Source: Bank Negara Malaysia

𝐊𝐞𝐲 𝐩𝐨𝐢𝐧𝐭𝐬 𝐨𝐧 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐋𝐞𝐧𝐝𝐢𝐧𝐠 𝐃𝐢𝐫𝐞𝐜𝐭𝐢𝐨𝐧𝐬, 2025 𝐛𝐲 𝐑𝐁𝐈 These directions aren't just guidelines; they represent a strong commitment to building a transparent and secure digital credit ecosystem in India. This comprehensive framework puts: ✅ 𝑬𝒏𝒉𝒂𝒏𝒄𝒆𝒅 𝑩𝒐𝒓𝒓𝒐𝒘𝒆𝒓 𝑷𝒓𝒐𝒕𝒆𝒄𝒕𝒊𝒐𝒏: The directions prioritize borrower safety through mandated disclosures (like Key Fact Statement), cooling-off periods to exit loans without penalty, and clear grievance redressal channels. ✅ 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞𝐝 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐟𝐨𝐫 𝐏𝐥𝐚𝐭𝐟𝐨𝐫𝐦𝐬: Regulated Entities (REs) are fully responsible for the digital lending activities carried out by their Lending Service Providers (LSPs), necessitating enhanced due diligence and oversight of these third parties. ✅ 𝑺𝒕𝒓𝒊𝒄𝒕 𝑫𝒂𝒕𝒂 𝒂𝒏𝒅 𝑻𝒆𝒄𝒉𝒏𝒐𝒍𝒐𝒈𝒚 𝑵𝒐𝒓𝒎𝒔: The regulations impose stringent rules on data collection (requiring explicit consent and limiting access to phone resources), data storage (mandating storage within India), and comprehensive privacy policies. ✅ 𝑻𝒓𝒂𝒏𝒔𝒑𝒂𝒓𝒆𝒏𝒄𝒚 𝒕𝒉𝒓𝒐𝒖𝒈𝒉 𝑫𝑳𝑨 𝑹𝒆𝒑𝒐𝒓𝒕𝒊𝒏𝒈: REs are required to report all Digital Lending Apps/Platforms (DLAs) they use or are associated with to the RBI, contributing to a centralized directory for increased transparency in the ecosystem. _______________________________________ Let me know in the comments what are your views about these directions?