Blog: An Interview with Iqra Shaikh

27/11/2021

By Humphrey Olugbue

This transcript is part of a series of Top Voice interviews brought to you by IBR Group International on the topic of sustainability. To learn more about our Top Voices in Sustainability interviews or to discover how you can contribute, please contact us directly.

Q1: How long have you been so passionate about sustainability for and where did your curiosity with sustainable finance originally begin?

I spent most of my youth working with horses, gallivanting in local open space preserves that surrounded the Silicon Valley, and learning about the plants and their stories. The uses and variety of native Oak trees. The woodland forests of the near past. The yellow mustard that dapples across California in Springtime brought by Spanish conquistadors and missionaries. Eucalyptus from Australia planted in a speculative frenzy during the gold rush.

I thought about what the landscape looked like before this ecological colonization took place, what it looked like when the Ohlone tribes and peoples roamed freely across the land. My parents often talked about the rapid development pointing out where orchards and local farms used to be, which made me think, what would my home, the Silicon Valley, look like 50 years from now?

This curiosity led me study Geography and City Planning at UC Berkeley, where I learned more about sustainability and climate change. Learning the geographical implications of climate change-the increase of natural disasters in both frequency and severity, the nations that would be under water, and impeding climate refugee crisis concerned me.

This kept me up at night.

I barely slept because I would think about the consequences and costs-the lives and livelihoods that were and would be lost. When I learned about sustainable finance and how we could actively invest in a better future, I knew I had found my calling.

Q2: Would you say being part of the Network for Sustainable Financial Markets, under Martina Macpherson's stewardship, has gradually benefited your understanding of current affairs in sustainable-led finance? If so, to what extent?

Tremendously!

Before discovering the Network for Sustainable Financial Markets, I knew nothing about sustainable-led finance, but what I lacked in knowledge, I made up in passion, enthusiasm, and questions. Lots of questions-which my fellow colleagues at NSFM were kind enough to entertain, answer, and challenge. Our board includes folks from industry, academia, policy, and the next generation, these conversations and debates opened my eyes to complexities of sustainable-led finance including its history and development over past couple decades. When curating panels and events, which we host on the Bright TALK ESG Channel, that diversity of insights is one of our signatures. We leverage a network of industry veterans, leaders, and innovators to provide a cross-sectional and comprehensive perspective on current affairs in the industry.

Over the past couple of years, NSFM has been involved in and contributed to a few public policy consultations including the GRI. We also hosted a panel on the SFDR staying quite up to date and active from a regulatory awareness perspective. Martina has done a wonderful job bringing the network back to life and at such a critical time.

Q3: Explain a bit about the Metrics that matter report which you are involved in. How can organizations such as the OECD best adapt and innovate the Metrics that Matter initiative in order to clarify and better communicate its objectives?

The report encourages G20 leaders to adopt policies, technologies, and metrics that can better account for externalities and market failures. Metrics that go beyond the traditional capital or economic factors to truly consider People and Planet, the social and the environmental. It also discusses the key challenges with implementing such metrics, namely data collection, availability, and human factors that could massage these figures.

While I am not qualified to advise the OECD and deeply admire all the work they do, what I would love to see as a data user and evangelical is more insights into how international, multinational, and multilateral organizations allocate funds, which is touched on in the potential of utilizing metrics section of the report. As more SDG and climate pledges translate to dollars, an understanding how these dollars flow and impact our global ecosystems is critical.

I come from the Silicon Valley, innovation runs in my blood, and I would love to see how new technologies like blockchain, and natural language processing could simplify and streamline the data collection process. I am also curious about how predictive analytics and geospatial mapping could simplify forecasting, modeling, and provide new ways of engaging with metrics.

Given our huge climate commitments; I just hope we measure up.

You can read the report here:

Q4: It's the second week of COP26 in Glasgow. What, if anything, would you like to see change about the capital markets and investment management industries in the UK and why?

As a global community, we are at a critical point. Regardless of who is to blame, the promise of 100 billion in climate finance by 2020, failed. Climate activists would argue that capital markets and investment management industries are failing. I believe collectively, we can turn the tides, but it will be hard and require significant investments.

The current climate is one of cynicism. Compare the conversations in Glasgow with the following conversations regarding Cumbria coal mine and Cambo oil fields. People have lost trust in markets and are seeking alternatives. People, who care deeply about climate change and about ESG, are wondering whether their individual investments align with their values. Capital markets and the investment management industries are listening to those concerns. Right now, we are amid one of the largest market corrections, where businesses are freely and actively accounting for externalities. Regulation and initiatives like the ISSB are catching up to market demand.

Capital markets and investment management industries are simultaneously over- and under-estimating the impact they can have. I do not believe climate finance will be the end all be all that solves climate change, but I do believe that the power capital markets have can effectively and efficiently funnel money towards climate-resilient initiatives which will help. Furthermore, the leverage that investment management industries have on businesses which can occur by shareholder activism or by mandating ESG reporting from their portfolio companies-it could change how business today operates. The rippling impacts of these actions are being grossly undervalued.

Now is not the time to cop-out.

Q5: What are your thoughts and opinions on the carbon border adjustment mechanisms in developed economies such as the EU and their role in fostering an effective cross-border Net Zero Strategy?

There is quite a bit of controversy around this, some argue it is a new form of protectionism while some argue it is a carbon market correction and a better way to account for carbon leakage in complex global trade systems. I think there could be truth in both.

Tobler's First Law of Geography states that "everything is related to everything else, but near things are more related than distant things." One challenge with globalization has been that negative externalities that we would not tolerate in our own backyards are being hidden in supply chains and furthermore advances in technology, shipping, lean manufacturing, and logistics have created a node of networks to the point where I don't think we fully understand or fairly price the effort or externalities that go into making and transporting goods. This is a serious cause for concern since most emissions come from energy and transportation.

I can understand and respect the thought process behind the carbon border adjustment mechanisms since as Justin Timberlake would say, "what goes around, goes around, goes around, goes all the way back around." And we do not want our efforts to get to net zero to have zero impact.

The crucial factors will be in the details. The Montreal Protocol which effectively reduced CFCs in the stratospheric ozone was ratified by every single country in the United Nations, it is imperative that we learn from its success and apply similar principles when creating these cross-border carbon adjustments policies. What that looks like in practice will be challenging but doable.

There must be mechanism that accounts for fossil fuel subsidies across and between nations. Furthermore, if countries are going through a green energy transition, that must be accounted for as well. While that is happening at the national levels and a general tax or tariff could be applied country-wise, I know several companies have started internal carbon markets and their internal efforts, which may not be known to the public. These companies should not be penalized because national policies differ from internal company policies. Eventually, I believe we will get to the point where products will disclose emissions outputs on labels, but it will take time.

Cross border carbon adjustments mechanisms could lead to a new era where competitive advantage is defined by green policies. Where going green makes green.

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