On the 17th January 2023, a further meeting on 'Monaco Finance Durable' (Monaco Sustainable Finance) was held at Novotel Monte Carlo in the presence of the Minister of Finance and Economy of the Principality of Monaco. The initiative, launched in March 2021 by his will, is focused on fighting plastic waste as a main target set by the Monegasque Government.
Opening the panel, H.E. Jean Castellini pointed out: « It is undoubtedly because of our Sovereign’s commitment that the banking and financial players in Monaco have been pioneers in the field of sustainable investments. For more than five years now, the Constitutional Reserve Fund has been investing in private equity products or through themes such as the one presented today in more targeted sectors, such as ocean preservation, or the unfolding of our planet ».
The meeting was aimed at rattling off major negative externalities of the use of plastic on investors' portfolios. The Monegasque willing to eradicate single-use plastic containers from the Principality was reaffirmed with direct reference to the Energy Transition Mission's action plan.
In the second part of the rendezvous, the Prince Albert II Foundation of Monaco presented the association «Beyond Plastic Med» (BeMed) that has been working for the preservation of the Mediterranean ecosystem against any plastic waste. The goal is particularly dear to the Prince's Foundation, considering that the Mediterranean Sea is one of the most polluted seas in the world, with more than 3 trillion micro-plastic particles scattered in its waters.
In the previous meeting in early December 2022, Jean Castellini highlighted the important role played by the Fonds de Réserve Constitutionnel - FRC (Constitutional Reserve Fund) in the field of energy transition and the joint initiative with the Association Monégasque des Activités Financières (AMAF) which led to the creation of the Association Monégasque pour la Finance Durable - AMFID (Monegasque Association for Sustainable Finance).
Financial and technological innovation was mentioned as pivotal in this transition, as well as the role of bodies like MonacoTech or the Innovation, Impact and Acceleration Funds (F2IAM). All those elements were detected to build up an increasingly sustainable economic ecosystem able to foster the creation of new businesses and jobs as well as to encourage the pioneering role of the Principality in the technological field.
Private Equity and Sustainability: two poles of an increasingly balanced cycle.
The role of Private Equity (PE) in the financial sector is more and more in fashion. PE corresponds basically to an institutional venture capital investment activities addressed to non-listed companies with high development potential. Typically, it is a medium-long-term investment in the so called high grow companies or start ups (venture capital) carried out mainly by institutional investors with the aim of obtaining a substantial holding gain from the sale of the acquired interest or from the stock exchange listing. If the institutional investor is considered as a prestigious figure in the financial environment, this could upgrade the receiving company allowing it to reach the position of a trusted contractor.
One of the primary objectives is of lates Private Equity is to push remarkable social and environmental impacts at global level. The operation is not without risks that can affect the same business reputation if the investments do not reach the desired objectives. However, the chance for PE investors to create a real financial value is practical. That is why the tool is used to promote sustainable economy considering the potential positive effects at the industrial level.
A recent survey report led by the World Economic Forum in partnership with The Carlyle Group, California Public Employees Retirement System (CalPERS), and the Boston Consulting Group collected feedbacks from more than thirty than 30 leading General Partners (GPs), Limited Partners (LPs) and industry experts. 'Creating Value through Sustainability in Private Markets' is the white paper resulting from this study, enhancing five priorities for Private Equity investors.
Invest in capabilities and culture = selecting a multidisciplinary team by gathering stakeholders from different backgrounds is essential to strengthen a shared sense of 'sustainability'.
Focus on a long-term plan = the whole process to create and reinforce a more sustainable cultural society takes time step by step - the parties involved in PE must benefit from a long term to get the best outcome.
Communicate the plan, along with measurable milestones along the way = constantly communicating to all stakeholders both the long-term plan and any advancement to approach it through standardised metrics and customised reports is an essential step of the reporting stage that needs to be transparent.
Transform instead of just divesting = individual investors have the chance to put sustainability as the prior objective over capital and assets by differentiating their investments.
Collaborate to address key barriers = LPs and GPs should keep collaborating together within the industrial ecosystem in order to set common standards and policies on different topics.
As a matter of fact, the Private Equity eco-trend shows how global finance is rapidly turning into something new at a speed that would require immediate responses at institutional and regulatory levels to ensure the creation of a greater balance between pure economic interest and the desire to give life to values of sustainability. ***
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