+41 44 350 6060
Profession / Affiliation
Managing Partner and Chairman of ECOFACT AG
ECOFACT AG, Zurich, Switzerland
Definition of Responsible Investment Banking
The minimum goal should be to not provide financial services to clients that violate international standards that define acceptable business practices. In future, ignoring such standards could be seen in retrospect as a deliberate decision which will eventually expose a bank to risk.
Areas of Expertise
Olivier Jaeggi has more than fifteen years of experience in the management of environmental and social issues which present credit, market, and reputational risks for financial institutions.
Prior to founding ECOFACT in 1998, Olivier Jaeggi worked in credit risk control at UBS, where he was in charge of managing environmental risks. He graduated in environmental engineering from the Swiss Federal Institute of Technology (ETH) Zurich, and has completed executive education programs at Harvard Business School and at the University of Oxford. He is a member of PRMIA’s subject matter expert advisory group on reputational risk and, since 2012, has contributed to the annual sustainability report produced by the MIT Sloan Management Review in collaboration with the Boston Consulting Group. He is also a regular contributor to the sustainability blog of the MIT Sloan Management Review.
The debate about sustainable finance focuses mostly on responsible investment. Considerably less attention tends to be paid to the direct relationships between banks and their corporate clients. Some of these clients are associated with controversial business practices, sectors, projects, and/or countries that, in turn, are associated with detrimental environmental and social impacts. In the context of this article, environmental and social (E&S) risks are those risks that occur when investment banks engage with such clients. This article discusses five factors that put pressure on banks to address E&S risks more systematically. It makes the case that E&S issues harbor considerable potential for damage in the here and now, and that investment banks take a risk if they underestimate them.
Keywords: sustainable finance, sustainable banking, client relationships, corporate clients, controversies, controversial business practices, controversial sectors, controversial projects, controversial countries, environmental impacts, social impacts, human rights impacts, environmental risks, social risks, human rights risks, banks, investment banks
Co-authors: Nina Kruschwitz and Raul Manjarin