Blog: An Interview with Irene Loucaides
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.
1. In Bill Gates's view, as he explains in his new book on climate change, the industry needs to have a better understanding of the political process behind the business of renewable energy in order to get things done more expediently. Are you satisfied with the level of engagement taking place between business and government?
The change that needs to happen, to achieve a green and fair transition, must be systemic. Governments, the private sector and civil society cannot work in isolation. Their efforts must be well coordinated. The success of each of their actions is inter-connected.
We can't aim for a carbon free road transport network in a market where electric cars are still more expensive than cars that run on petrol, or in a market where charging stations are not enough, or that charging stations power supply runs on fossil fuels instead of renewables.
Public policy can help close the price gap through new taxation schemes giving the market incentives to opt greener. Public policy can provide incentives to the private sector to invest in these areas in terms of research and innovation. Public policy can provide incentives to academia to invest in education in these new fields that are going to then invent better solutions. Public policy can assist in the creation of accessible cities promoting public transport, bicycle usage and walking as more sustainable and just means of transport. That can only be done through collaboration.
Similarly, in the agriculture sector, opting for food products that follow more sustainable and innovative farming methods, such as vertical hydroponic solutions, is still far more expensive than products that follow unsustainable mass production methods. Public policy can provide incentives for youth to opt for farming professions, for technology companies to invent in the tools that will provide smarter use of resources and healthier, more sustainable regenerative agricultural systems.
At the same time, we can't have a shipping sector where alternative fuels are not widely available and new builds that operate solely on alternative fuels are more expensive.
In order to achieve a green and fair transition, all stakeholders must align their priorities and action plans to create shared value with mutual benefits for all.
2. With the COP28 conference coming up in a few months, what areas of policy stand out as an area which you would like seen addressed more comprehensively?
Although we are still very much dependent on fossil fuels to cover our basic human needs such as keeping warm and moving around, we need to phase out fossil fuel exploitation and subsidies giving way to renewable energy sources' more widespread use and reach. If we continue to rely on fossil fuels, we can't progress efforts for RES to flourish. Additionally, the protection of natural carbon sinks and incentives for innovation in that area would assist in achieving our SDG's.
3. In terms of ESG Reporting, what are the key mechanisms that govern disclosure in the European Union and why are listed companies (particularly in energy and infrastructure) publishing sustainability reports for the investor community?
ESG reporting has been made mandatory for large sized (>500 staff) public organisations and all companies listed on regulated markets including banks and insurance companies or other large organisations in regulated industries since 2017. The European Commission has recently voted in favour of the new Corporate Sustainability Reporting Directive (CSRD), which amends the reporting requirements of the existing Non-Financial Reporting Directive (NFRD) extending the scope to all large companies with over 250 personnel or over €40m. revenue. Companies that have not been reporting under the NFRD, will need to comply with these new regulations by 2025.
The EU Taxonomy Regulation is a unified EU classification system which sets harmonised criteria for determining whether an economic activity is environmentally sustainable. Step by step, the European Commission will identify activities which qualify as 'sustainable', considering existing market practices and initiatives and drawing on the advice of a technical expert group that has been set up. This should provide economic actors and investors with clarity on which activities are considered sustainable, so they take more informed decisions. It may serve as the basis for the future establishment of standards and labels for sustainable financial products, as announced in the Commission Action Plan on Sustainable Finance.
The proposed Regulation introduces consistency and clarity on how institutional investors, such as asset managers, insurance companies, pension funds, or investment advisors should integrate environmental, social and governance (ESG) factors in their investment decision-making process.
In addition, those asset managers and institutional investors would have to demonstrate how their investments are aligned with ESG objectives and disclose how they comply with these duties. The proposed rules will create a new category of benchmarks, comprising the low carbon benchmark or "decarbonised" version of standard indices and the positive-carbon impact benchmarks. This new market standard should reflect companies' carbon footprint and give investors greater information on an investment portfolio's carbon footprint. While the low-carbon benchmark would be based on a standard 'decarbonising' benchmark, the positive-carbon impact benchmark would allow an investment portfolio to be better aligned with the Paris agreement objectives.
4. What are some of your thoughts and opinions towards the regulation which helps support the financing and investment in green infrastructure across the UK and in Europe?
I firmly believe that the financial services industry has a crucial role to play in driving the green transition. Corporations tend to follow the money. So if going "green" is the only way to attract investors or acquire financing with preferential terms then corporations will surely adapt to these demands. There is now a clear link between a company's financial and non-financial performance and it is important to understand how all these factors affect an organization and its impact and use clear Key Performance Indicators (KPI's) that provide the metrics to facilitate decision making. That is why a lot of Investment firms, insurance companies, private equity funds and banks rely on these metrics and ratings to decide whether to invest in an asset or finance a new project and with what terms. Companies that respond well to these metrics are more likely to perform well financially. All of this requires consistent and reliable data on the performance of an organization regarding its footprint on the environment and society and that is where corporate sustainability reporting comes into play.
5. If you were to select one enthralling career highlight to describe the rewarding experiences you have had in the lead up to your role as Managing Director of Grow Sustainability, what would it be?
In the 20+ years of my work life there have been many exciting moments. Moments that I cherish dearly and feel lucky and blessed to have experienced. These moments make all the hard work you put in worth it. But it's the hard work, the long hours, the challenges you face that lead up to where you are today. Not the awards or the distinctions. Those are nice, sure. But they are not the moments that teach us, that make us grow, that make us better. The greatest lessons lie in the trenches. Not in the clouds.
6. How can the millennial generation who may have interests in supporting green power get involved in your organisation's community initiatives?
We always support new graduates who would like a career in sustainability through our internship program. We feel we have as much to learn from them as they have to learn from us. A fresh perspective is equally rewarding as an experienced one and having a team with both is a winning combination.
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