Stronghold Global Finance has announced a new Global Advisory Board to strengthen its impact investing and sustainability offering. Ann Mee – Chair of the Global Advisory Board – answers some questions and shares her views on trends shaping global investment banking.
- What excites you about being involved with Stronghold Finance?
AM: Stronghold Global Finance is an organisation that is going to scale up rapidly. It has got big backing. Many people have tried entering the emerging markets space, but Stronghold Global Finance actually walks the talk. Having lived and worked in Africa, America, Europe, UK, and worked across China and India, personally I feel excited about taking the products, investments, bonds, and the new ways of working and establishing new channels to market. As an investment house, it has been brilliant at integrating senior people with experience. Stronghold Global Finance is very good at not just doing one thing. It uses lots of different approaches to unlock finance in emerging markets – for example with its Green Bond.
- Has COP26 changed the priorities of the international investment banking industry and in what ways?
AM: I spoke at COP26, and I wanted to give the financial services profession new questions to think about. People think the climate agenda is about reducing carbon emissions; it’s about more than that. We need to act, fast, to ensure the largest number of people on the planet continue to have liveable conditions. This is going to take the biggest reallocation of capital in our lifetimes, roughly US$3-5 trillion of capital reallocation annually to build sustainable infrastructure around the world. Huge amounts of new funding has been agreed from many major countries around the globe. The announced pledges scenario represents a substantial change compared to what went before and it will make a big difference to the role of Africa and the emerging markets in adapting to climate change. These regions are already feeling the impact. Stronghold intend to play a large part in COP27 and COP28.
- In what areas are we starting to see ascending economies leapfrog the developed world?
AM: Many African countries are now making serious efforts to transition towards low-carbon infrastructure and low-carbon tax systems, for example. How far these efforts go will be determined by the pledges signed by participants in COP26 in Glasgow, and how well these pledges are implemented. I’m also part of the Africa Finance Corporation (AFC), which launched a US$2bn facility to support economic recovery in Africa and resilience in African economies at an event in Abuja in May this year, in response to COVID-19 and the disruption resulting from conflict in Ukraine. The AFC has committed to funding up to 50% of that facility, showing huge confidence in one of Stronghold Global Finance’s key areas of focus – ascending economies in Africa. The facility is dubbed the African Economic Resilience Facility and will be disbursed via loans from the AFC and regional and central banks, allowing them to partner, liquidate and finance trade and other activities in their jurisdictions. That’s a lot of money, and we will start to see Africa rank higher – if not leapfrog other countries – in sustainable infrastructure, renewable energy generation and digital technology innovation.
- What contribution do you see Stronghold Global Finance making?
AM: Personally, I see Stronghold Global Finance making a huge contribution. Stronghold Global Finance has got the backing and the funding to work on major infrastructure and energy projects that will make huge contributions to the COP26 targets. I believe Stronghold Global Finance has a tremendous pedigree in bridging the infrastructure gap in Africa through targeted interventions, penetrating into that market along with those companies and banks that are partnering with the AFC. I am particularly keen on building partnerships, and there are several big banks in Africa that want to partner with Stronghold Global Finance. Stronghold Global Finance has the capability, network and networks to actually make transformation happen.
- Is there a danger that ESG is an over-used term that businesses use to re-badge projects/commitments that are not transformational enough?
AM: I don’t worry that it is a term that is over-used. I have a worry that boards and directors don’t understand it very much. ESG is not just another form of change, it is a form of transition and transformation because there is a lot more that has to go into ESG. What does transformation mean? It is not about disrupting the day-to-day business but it is about helping the business use new techniques, infrastructure, technology, and people in many different ways, to do something different than it did before. And transformation , for me, has to start at board level. Some boards continue to do a tick-box exercise. The FCA has issued guidelines on what they are expecting and what it means to them; it’s not, in my view, just to re-badge projects that are ultimately not transformational enough. We need to implement total transformation intent in the kind of businesses we run and monitor how effective that transformation is.