BCCI Inclusive Finance – Impact Investing series Part 1: CAN FINANCE SAVE THE WORLD?

Good evening everyone well or good afternoon or 
good morning depending on where are you right now   uh we are delighted because we have friends 
joining from milan and rome of course but   we got other friends from washington dc from 
kigali from madrid from paris from canada   so i guess these are the advantages of technology 
we miss the good old days when we used to meet   in person but well everything has advantages 
and disadvantages and that you know we just by   switching language into english we can have many 
more friends so welcome everyone uh um in this   difficult times when the covet 19 crisis threatens 
to give all of keep all of us in a reactive mode   we at vcci inclusive finance and forum 
finance sustainability are seeking dialogue   we are trying to assemble ideas that can turn 
into visions for a more resilient inclusive   and sustainable next normal a future built in part 
by the innovations impact investors will pioneer   and for this reason we have invited bertrand madre 
to join us today bertrand thank you very much   i can't express with words how thankful we are how 
honored and how delighted we are to host you today   uh if you don't mind prior to introducing you and 
who you are to our friends i would like to thank   our sponsors credit mutuel investment managers and 
exxon asset management for not only for allowing   us to have this three-part impact investing 
series but most importantly for your support   over the years i mean without you both it 
would have been impossible so thank you   simonetta thank you vansan thank you really um 
i wanted to say thank you to federica viviana   vanessa and maria luisa as well for all the work 
done behind the scenes and as most of you know   these three-part series are the result of a 
partnership between bcci inclusive finance which   belongs to the british chamber of commerce 
for italy and that's why the acronym bcci   and forum finance sustainability which is 
the italian sustainable investment forum   and for that reason i would love simonetta and 
francesco to say a few words to say hello to you   simonetta is my acquired sister the co-chair of 
bcci inclusive finance and the head in italy of   credit mutual investment managers prego simonetta 
and good evening good morning good afternoon   it's a pleasure also for me to welcome 
everyone for being here with us with us today   i'm very pleased to welcome those of you that have 
been with us for a long time now as well as those   are new to this group because there are new people 
in this in this group so it's important to welcome   everybody and before to leave the the the floor to 
francesco and paulie and bertrand i would like to   to have just a few seconds just to say which 
is um our our mission when we we we started   and uh and in our mission we would 
like to redesign the role of capital in   in society by building a new future in which 
finance is instrumental to social progress   sustainability challenges as poverty climate 
change gender gap need a profound system   transformation and a deep personal renewal our 
personal contribution is necessary more than ever   so we hope today this event inspires 
ideas and discussions around the ways that we can make our world a better place where 
to live so uh i thank you again uh and all of you   today to to be part of this gen journey with 
us and now i live the floor to francesco   thank you thank you thank you paulie thank you 
bertram i'm really really keen to welcome bertram   today and being a part of bcci in the organization 
of this event and special thanks of course to   paulie to promote this uh this initiative 
so few words of 30 seconds 35 seconds maybe   so first of all one issue that i'm very 
very happy that this year is 20 years   of from the foundation of sustainable forum 
and sustainable finance forum in italy and   which is quite important we are not more pioneer 
now sustainable finances mainstream as you know just a couple of things is the first 
one is the responsibility the keywords   for us is a responsibility i think that 
all the stakeholders today have to be more   responsible so we are talking about 
asset manager bank insurance companies   banking foundation pension funds everybody have to 
be a crucial rule i mean that sustainable finance   or finance is not a neutral tool it is at the 
center of the debate on sustainable development so   this is the issue that may that mark a difference 
between what was the model of finance before   so the other issue the the other issue is that 
social and economic emergency from one side and   climate emergency from the other side they 
are the two sides of the same coin this is   the issue i mean that we have to pay attention 
to say okay we cannot deal with the matter of   climate change because we have the other urgency 
now we have to we have to to push for the recovery   et cetera no as european commission underlying 
that we are talking about the same problem and   if you deal with this with the with the climate 
change issue you absolutely have to to to face   the social and economic opportunities that 
can can come from a change of paradigm   so for for me is quite important so just just to 
conclude saying that okay we have to work together   paulie knows very well that i insist 
in this kind of public and private   approach i mean that we have to work together 
and we have to to look for an alignment   towards the same goals sustainable development 
goals this okay i give you the floor   thank you francesco thank you francesco 
finance it's not a neutral tool indeed   and i'm sure that bertrand fully agrees with what 
you just said um also because i've read his book   and the many many articles he publishes in project 
syndicate and i know for certain that that's the   case thank you francesco thank you simonetta 
so to our friends um ladies and gentlemen i am   very very happy to introduce that from madrid to 
you bertrand is ceo and founder of blue like an   orange sustainable capital an impact investing 
fund created to provide financial returns while   mobilizing capital for projects useful to humanity 
prior to that bertrand has had an illustrious   career in both public and private finance he was 
former economic advisor to president shirak cfo   of credit agriculture associated general and 
managing director and cfo of the world bank   i have to say that in this last role he 
co-authored a report called from billions   to trillions which is considered a key 
publication in the world of sustainable finance   he is also the author of two books on how finance 
should be leveraged to build a better world   so this leads me to the first question bertrand 
unfortunately i am still waiting for the english   translation of your second book bulong new series 
changes i'm sorry for my french so please if you   don't mind let's concentrate on can finance 
save the world bertrand in this wonderful book   you look at the destructive role finance played 
during the 2007-2008 economic crisis but most   importantly you provide a compelling vision of how 
finance can be a force for good would you please   make a summary of your main message for our 
friends thank you sure thank you thank you uh   very much paulie it's great to to meet 
you simonetta and francesco and uh   why we get used to this virtual gathering it's 
still very frustrating to be like speaking   to your screen uh but thank you thank you 
so much so now the main message is pretty   straightforward actually we we had 
a massive uh crisis uh 10 years ago   which has been felt all over the 
world particularly in europe actually   and uh to address that deep crisis we've done a 
lot of things actually we should not just forget   about that but we focused on the technical 
aspects of the repair so we we asked the   banks to increase their solvency ratio we 
asked the banks to work on their liquidity   we provided a little bit more security in the 
insurance and pension fund regulation system in   a nutshell we patched up the system but we did not 
really work on the design of that system and not   on the fault lines that have been revealed by that 
crisis and there were a number of fault lines in   particular because the uh the system as we knew 
it was uh basically is a baby of decisions made   in the early 70s and let me take two very 
important dates uh which i i don't want to say   they are bad or wrong i don't want to say 
that we move from like being in the dark to   being the light and then again in the dark but 
they are important symbols the first one is uh   august 71 15th of august 71 when president nixon 
made the decision to temporarily suspend as a   convertibility of dollar into gold i mean it's 50 
years and we are still under this temporary regime   this was the time when an ounce of gold was worth 
35 i mean as you know it's worth a little bit more   today and it shows what happened in the last 50 
years so it's interesting per se because we have   moved with that from a world which was organized 
around the dollar with the watchdog being the imf   and at that time everything was kind of fixed 
and sometimes you kind of changed the fixed link   which was called devaluation and uh now 
we moved into a floating mechanism which   more than the floating mechanism is is a mechanics 
where market is really the default value setter   if i ask you how much is a dollar you will 
tell me a dollar is worth x euro i say okay   good point so how much is a euro and you will tell 
me it's first y dollars and it's moving every day   so again it's not bad or wrong it's just the fact 
that market has has really entered our daily life   and for those of you which i think is the majority 
online which are working with finance you know   what i mean with accounting principles called mart 
market this is really where it's coming from and   and few few months before another very important 
moment was an article by the great professor of   economics milton friedman who published in the 
13th of september 1917 the new york times a   very famous paper in which uh it provided an 
answer to a big discussion that happened in   the u.s at that time it was about general motors 
general motors was the largest company in the u.s   it was a time when people say what is good for 
general motors is good for america and what is   good for america is good for general motors and 
general motors was considering to open its board   its governance to three board members which would 
represent what was then called the public interest   something different and of course milton friedman 
stepped up published his paper which was called   the purpose of business is to increase its profits 
so of course the the paper itself was a little bit   more sophisticated uh in particular it reminded 
people that public interest was supposed to be   taken care of by governments public authorities 
each of us etc and that ceos and companies were   supposed to to be part of that ecosystem but we've 
kind of forgotten all the rest and we focused   on increasing profits and so when you combine 
market uh predominance with a profit uh access   then you enter in what has become the conservative 
revolution the washington consensus the neoliberal   model etc which has worked actually pretty well 
for a while but which has hit its limits in 2007   and we've not really addressed that the questions 
is this model still okay for what we want to   achieve now so that's that comes to my point so we 
we've uh we've kind of patched up the system so we   we are not dead today which is good we are not 
in 1913 or 1940.

We avoided that but it was true   before covered in even more true today after covid 
we have not addressed the fault line so we we did   a try in 2015 when when we worked you thank you 
for mentioning the billions to trillions report   when we work on the sustainable development goals 
when we work on financing for development in addis   and when we work on paris cop21 agreement on 
climate so we design the roadmap but you did not   really work on the underlying financing models 
it is necessary to get there and we were off   track before kovid we are still off track after a 
career and that's why it's extremely timely that   we have this conversation today if we seriously 
want to change the world there is more to do we totally agree beltran but thank you for this 
high level explanation we are fascinated by   you know your your life basically 
everything um the second question uh   in the second question i would like um 
to discuss the role of private finance   in helping companies truly pursue the triple 
bottom line so in building what everybody calls   stakeholder capitalism because it seems easier 
said than done and why do i say that because   in our market economy the corporation is a very 
important social and economic agent especially if   we think of the limited resources of govern the 
fiscal burdens of governments and the limited   resources of the nonprofit sector if we could make 
our corporations accountable for a deeper purpose   we would have a better capitalism a 
more prosperous capitalism for everyone   and for the planet making our companies 
accountable for a deeper purpose may sound utopian   but this was often the case between world war ii 
and the 1970s and it's exactly what you say from   the 17th on things changed a little bit and 
i recently read the report a 1953 report from   general electric's ceo and he was publishing 
results but he was bragging about a lot of money   paid in federal taxes and payments to suppliers 
payroll spending for employees long-term research   and he quoted something like the the income of the 
firm is shared among those who make it possible   obviously blacktran these are the businesses 
we want uh but to have them we need what you   would you always say in in the book finance to 
be a good servant and not a master the thing   is that while today while business leaders may 
aspire to virtue they are bound by a fiduciary   duty to maximize profits and sometimes they feel 
they they they find conflicting demands while   stakeholders ask them to do good but shareholders 
request constant profit maximization even   quarterly so the question is with the average 
stock currently held for just a few months   versus in the 1960s for a few years with our 
beloved discounted cash flow model not valuing   income into the future much and with quarterly 
results still triggering investment decisions   how can we reverse the tide on short-term medium 
how can we allow business leaders to truly truly   pursue the triple bottom line well i think you 
you you raise uh the question uh and there are two   things that we can we can envisage first what can 
we do within uh the system that is existing today   and again there are a lot of things that can be 
done so we should not just be shy and say it's not   me it's a system uh also let me share with you uh 
the most uh how can i say that the most heartful   anecdote of this period into in early 2008 we 
organized in paris a seminar on the subprime   crisis it was before the bankruptcy of lehman 
brothers so at the very beginning of the crisis   and we had invited paul volcker paul verker which 
was the head of the federal reserve under jimmy   carter the guy that defeated inflation so the 
central banker with a capital c and his capital b   and then he was he was called back from his 
retirement by president obama to help him design   the so-called vocal rule to prevent banks from 
speculating on markets basically and investing   their own balance sheet into speculative assets 
and i remember paul vodka was asked by somebody   in the audience say but mr walker why are you 
criticizing us why are you criticizing wall street   at the end of the day we are just doing our job 
and so the rules are the worst and we just abide   by the rules and volcker told them guys i mean 
this is just not reasonable you're very well paid   he was very smart you're graduating from the best 
universities you cannot pretend you don't know   and he said which was i mean like a punch in my 
stomach he said i will not accept in 2008 no no   no more than i would accept in 1945 it's a excuse 
of new hamburg you just cannot say you don't know   so you you are part of a system you just can't 
accept it as it is and that leads me to my   second point so while we can do things within the 
system we should also work on changing the system   and the system as we know it as i said it has 
a genealogy it has a burst i mean the early 70s   that's the way we started to really work on the 
accounting standards the remuneration policy   i mean the stock options for instance uh lnt 
for instance the fiduciary duties the way rating   agencies are working i mean everything which makes 
your daily life my daily life what it is today   and this this is a cycle and friedman actually 
said when the previous system died mine was ready   so now we have to work to make ready 
the next system and that's really uh   what we all have to do on the one hand uh 
to do the maximum within the existing rules   and the other end try to adjust these rules 
for the future and that's where the tension   is and it's it's it's a difficult exercise 
it's a difficult exercise but we can't hide   ourselves behind the rules and say we can't do 
nothing the the weakness of this is that today uh   the system relies a lot on the goodwill of 
individuals goodwill of ceos goodwill of president   of organization goodwill of individual consumers 
investors staff members etc they can push and   we all push and there are things happening so we 
should not be totally depressed there are things   happening but if we want this to move to the next 
stage we have to basically open the open the hood   take our toolbox and work on the engine i mean 
it's really working on the operating system   and let me quote a guy that i admire a lot a guy 
named colleen meyer uh he was a former dean of   the state business school in oxford he published 
a book two or three years ago called prosperity   and in his book he says the social purpose of 
business should not be to increase its profits   so profit should not be an end to an end a 
nan in itself a profit actually as i would   say is that it's not an ending to an end it's an 
imperative you need to be profitable to survive   but the profit is an outcome and the profit is 
calculated based on norms what are our norms on   revenues what are norms and costs what do we 
incorporate in our p l so again we understand   the concept of profit but there are many ways 
to calculate the concept of profits and then   performance so what colleen meyer is suggesting 
based on this type of idea is that the social   purpose of business should not as i say be to 
increase its profits full stop the social purpose   of business should be to find profitable solution 
to the problem of this planet and its people   every word is important we have to find profitable 
solution profit is an is a means to an end   not an earning itself and because we are 
profitable that why you you can be rewarded   and this profitability make sure that there is 
a something useful which will last over time and   that's how you put profit in something bigger than 
it is and that's a real change and you say for   this planet and these people because i mean there 
is no point of making profit if it doesn't benefit   us at the end of the earth collectively as people 
and us collectively as people on a given planet   maybe elon musk will send us to mars soon so in 
that case we might say to the people of these   planets but for the time being we're stuck on 
this planet and so we better do the best out of it thank you thank you that was a good 
one and and volker was not the only   central banker who was called 
on retirement to solve but mario i try not to interfere in other countries policy   it reminded me to drag it but yes work on the 
engine and this leads me to to the next question   of how to how can we come up with appropriate 
instead of excessive regulation i.e the role   of governments in in building back differently uh 
because while it's true that the kuwait 19 crisis   is highlighting many countries systemic weaknesses 
and inequalities but perhaps is also providing   policy makers a once in a generation opportunity 
to tackle them differently the thing is that some   argue bertrand that fiscal spending is the only 
game in town because um central banks have many   few bullets left um that governments should play 
a bigger role ensuring obviously universal access   to healthcare education digital technologies but 
a bigger role that governments that we realize   today that governments can even borrow more than 
we thought without upsetting financial markets   but others have a completely different vision and 
they think governments should simply set up the   frameworks and the incentives so that the private 
sector can come and help and take a leadership   role the other day i um i read mark carney on 
the financial times and and he was on policy   he was quoting three f's quite easy to remember 
fiscal spending framing regulatory initiatives   and finance so what do you think bertrand how can 
we strike the right balance well i i i think he's   right first of all it's time for the pendulum 
to swing back to something more central uh   we we've moved from from a moment where 
ronald reagan in his inaugural address says   the government is not the solution the government 
is a problem and so we moved away from government   now with the covid i mean everything is government 
related so i think we should realize what i said   before i'm repeating today that none of the 
problem connected to the sustainable development   goals can be addressed by the government or the 
private sector or civil society alone so we need   to move to a place where everybody is paying his 
role but you have a governance of these issues   which which coordinates the relationship 
between public private and civil society   and it's a hard it's a hard day because there is 
a lot of suspicion one of the consequence of the   many crises we've been swoon and this one is also 
i mean as you see in many countries a distrust is   is the name of the game this trust wizard 
refinance visa with politicians with every   science of israeli technology vis-a-vis elites 
in general we have this issue and without trust   it's very difficult to cooperate on top of 
that we don't have that many people that   can speak different languages you know 
we are in a world which maybe it's   a it's a legacy of taylor where everybody is 
swimming in his lane or running in his corridor   and not understand the problems of others but you 
will not address poverty water climate cyber just   you alone even not the biggest country on 
earth cannot address these questions alone   so we have to we learn cooperation we have to 
speak different languages we have to be bilingual   because if not i mean suspicion will be the 
name of the game and it's it will be a complete   disaster so for me it's essential that we in 
particular in europe where we have this tradition   of public private cooperation i think this is 
where we should reinvent this type of tools   when i wanted to be provocative after the brexit 
uh you know everybody maybe a little less milan   but in particular there was a big fight between 
amsterdam frankfurt dublin and paris to get the uh   whatever could be taken out of london out of the 
city of london and so the people try to attract   you know bankers and mla bankers and traders etc 
i say okay that's fine it's the name of the game   but the real question is not to try to copy 
or emulate london i mean none of us is capable   of doing that i mean they are different in 
nature and none of us have the british empire   none of us has english language none of us has a 
connection with the middle east and the far east   and so on it's very difficult to reinvent that i 
mean we are not the brits at the end of the day   sorry for the bci but that's uh another i mean 
it and i have profound respect for that so it   was a good question would not have been to say 
how can we take a piece of the beast but what is a   financial center for the 21st century and i think 
the europeans should have worked together instead   of competing you know one against the other and 
say okay what do we need to bring to the world   to make a difference and i think the main the main 
issues is we could be the place where we discuss   climate transition where we discuss demographic 
transition we are aging what does it mean in   terms of uh credit and savings for instance and i 
mean public private cooperation can we develop new   types of finance can we can we be the place where 
we really invent the tools for blended finance   for joint uh cooperation etc that would make a 
difference can we engage in a more forceful way   with the emerging markets in africa i mean we keep 
saying hey we have a crime with africa okay what   do we do with that we know that today you have 
1.5 billion africans and 500 million europeans   at the end of this century you will have 4 billion 
africans and less than 500 million europeans   so if we don't take care of them 
now if we don't work with them now   we have a problem so now is the time to to to 
discuss a different finance not just a copycat   a model that we will i don't think we'll 
ever be able to copy at the end of the day   thank you bertrand and this is a great idea 
because we're not number one in technology   we're not number one in many many topics 
but i we can say and we can tell that we are   number one in sustainability with a green 
deal and so absolutely i absolutely agree   um i'm skipping one question because i want 
us to have time to discuss impact investing   so i'm going to go into what was my question 
five which is finance and the journey to itaca   and putin victor rubel bertrand nothing is 
more powerful than an idea whose time has come   and for the asset management industry the time 
for integrating sustainability criteria into   investment decision making has definitely come the 
idea might be as old as investing itself because   we can think of the quakers and the methodists 
um refusing to invest in slaves we can't think of   investors opposing nuclear arms or during 
the vietnam war and fighting racism   against south africa's apartheid last last century 
but i see a kind of evolution from doing less harm   to doing more good from exclusions all the way 
into impact investing into providing solutions   with the capital employed now you've written 
uh articles with sir ronald cohen which is   another person i deeply deeply admire and ronald 
cohen as you know has a vision of the fact that   the 19th century was the century of returns the 
20th century we added a new dimension and we   learned how to manage risk so we turn it into two 
dimensions risk and return and you know he always   says that this is this will be the century of 
of risk return and impact of the famous three   dimensions um i mean we hope it's true but we also 
know that impact investing is facing a bit of some   challenges in terms of trust accountability how 
to measure manage and report on impacts which i'm   sure you are experiencing because it's not that 
straightforward we haven't done it for the last   300 years so what is your vision about it how 
are you seeing finance in 20 50 100 years time   well i think it's thank you for for raising 
this companionship with us cerrone curran   actually and you might have noted that this 
evolution from 19th century 21st century from   risk to risk return to risk return on impact 
is really something i discussed with him many   years ago actually we came to that vision and it's 
very interesting because emmanuel macron i don't   know whether he's still popular or unpopular in 
italy but whatever he's a friend and he he was   kind enough to to write the forward of my book 
and that's precisely the point he's highlighting   he says this is it uh maybe because he was a 
banker as hotshot before you know it says a lot   but but i think it's important he he really 
points at the finger at the important   issue which is our models because at the end 
of the day this is the way we calculate things   and if we don't change our models we don't change 
the way we look at things as we very well know the   way we measure the way we calculate means a lot 
on the way we do or don't do things and and i   think this is precisely this moment in time and 
ronald cohen has been a force in that direction   to say we need to work i mean at the end of the 
day irr is a very sophisticated analysis i mean   we made it very simple so you say oh it's an irr 
of 8.5 but there is a lot of assumptions behind   this there is a lot of things so we can make it 
a little bit more sophisticated by taking on more   climate nature the cost of living peaceful in 
society and these type of things there's nothing   that prevent us from doing that and that's i 
think the fight of the coming of the coming years   i think it's it's extremely uh promising that 
things are moving uh but uh i i i don't think   we're there yet uh again i don't want to be too 
complacent too early and we all of us today we   we have the thing that things are changing fast 
because we are all in the same fish tank so we   all talk to people with things the same and so you 
have it's a cognitive bias that is very well known   i mean talking to people you know we are today 
maybe we are the kind of impact fox news network   we are together watching impact but i have no 
idea whether we are a tiny aquarium in a big ocean   or whether we are big aquarium and then we 
are about to kind of cover the whole ocean   so we we should really pay attention to 
that and that's why i think working hard   on the underlying system not that i'm a marxist 
but i believe infrastructure means a lot   that you need to work on things that makes 
your life a routine the objective is not only   to make the impact approach a mainstream but 
a routine something which is just so embedded   in our way of doing that nobody questioned it 
anymore today we are at this moment where as   you say there is a growing momentum there is a 
tidal wave uh but it's still ambiguous you have   things happening so everybody says great you have 
40 or 50 trillion dollar or euro invested in esg   well that's probably true but let's 
face it i mean what is exactly esg   in a number of cases people are very 
genuine and sincere and go fast and deep   fair enough and that's not my job to test 
with with the same room whether they are   telling the truth or not i'm not in that 
business so i'm taking things at face value   but we have to be cautious i mean again esg 
is as big as lawyers would say it's the best   effort things i'm trying to commit to do good 
things it's a good starting point and i think   it's a good point to socialize these ideas 
but we have to go further down the road and   for me again i don't want to be a grand priest 
of impact or an impact mayor or whatever you   call it but i think it goes beyond it's not just 
about best efforts it's about outcome it's about   measurement it's about third party verification as 
we say there is a trust issue in the system it's   not just because you say i'm going to do great 
things that people will buy this hundred percent   uh and that's where the title of my last book 
comes from do we seriously want to change the   world of course the important word is serious 
seriously everybody say yes i want to do big   things i mean i had this conversation with one 
of my friends after davos discussion after davos   week and we were both back and my friend told 
me oh it's great when you come back from davos   all the world's problems are solved if you add 
up all the commitments we are done it's okay   and then you come back the year after and oh 
my god the principal not sold what happened   yeah because if we are not serious if it's just 
about verbal commitment some are genuine some are   less genuine some are pure washing some are pure 
marketing so that's this moment that we have to   create and basically push people to stop thinking 
about this make it happen and that's where we have   to find the relevant forces to go in the right 
direction we have the we have the roadmap i mean   the sustainable development goes our roadmap it's 
not ideal for sure it's complex it's it's mostly   addressing public sectors perspectives and issues 
etc but let's be realistic there will be no   discussion at the global level to agree today 
on something else so let's stick to that let's   stick to the paris climate agreement let's stick 
to what's going to be discussed on nature and   biodiversity and try to make the best out of it 
and that's really where our efforts should be   focused in the coming years thank you returned 
um i i there's there's a sentence you mentioned   that uh it struck me which is it's not just 
about efforts it's about results and third-party   verification to build trust and and you're totally 
right because if investors see that the biggest 10   esg fans in the world are all investing invested 
like their biggest holdings are amazon facebook   uh and and all these big you know fun stocks then 
the trust in sustainable finance diminishes so   it is very important and work on 
infrastructure as as you rightly said would you please now tell our friends about 
blue like an orange sustainable capital   which type of financial returns are you targeting 
with social and environmental outcomes as well   and and if you're targeting um some sdgs as 
opposed to others tell us about this wonderful   product yeah so there are things i can share and 
things i cannot share for regulatory purposes and   i'm not supposed to talk about performance online 
this is prohibited as most of you know i suppose   but in principle there are few ingredients 
to to the blue like an orange sauce uh which   basically uh came out of the book that you you 
just showed i spent a year after the world bank   in a think tank thinking what how can we really 
mobilize this billions to get to the trillions   again just to put things in perspective uh most 
people talk about gdp and they say yeah gdp x gdp   y and then you say okay what is the gdp of italy 
what is the gdp of the world what is the gdp of   the eu and then you realize that 95 of the people 
have no clue they talk about it but they forget   and i like to remind people that gdp of the world 
depending on how you measure it and though there   are different ways to measure it is around 80 
to 100 trillion dollars so it's a lot of zeros   and then when you put in perspective the money 
transferred to support emerging neural economies   it's in billions so how do you move from these 
billions to the trillions how do you breed the gap   and the gap will be reached partly by public 
money as you discuss fiscal policy public aid etc   but the gap will be bridged by private money and 
that's what we need to organize to make sure that   uh let me share an anecdote with you when we're 
still at the world bank we are meeting in 2015   with with the u.n delegate delegation but mostly 
from the general assembly so ambassadors etc   and uh so we are they came to the world bank 
to discuss the financing of the sdg and they   say yeah metro you come from the private sector 
you're a finance guy so how do we finance this   and one of the guys i was i was stunned 
because i couldn't believe my ears he said   oh it's great we will ask qatar in norway 
because they are very rich to give us the   money to finances and i say it doesn't 
make any sense i would not ask them money   and what the money is given is lost and on top of 
that it's not at the scale even if it's rich in a   hundred trillion dollar economy even the trillion 
of norwegian euro would not make a difference   so this is not the right way to get there the 
right way is to organize a system through which   investments public and private will flow 
to where it's needed instead of buying   negative rates french german swiss japanese 
belgian bonds not yet italian coming closer   you should invest a little bit of your money uh 
where there is growth and needs okay it's riskier   that's true but let's work on that and how can 
we make a difference so it was a real it's still   actually an allocation of capital issues that 
we are facing too much money going in places   where it's not needed and too little going where 
it's needed and so the rooney can orange can out   of this diagnosis so first we need to find a 
way to channel money where it's most needed   including economically i'm not talking 
about charitable money i'm talking about   investment opportunities second we need to work 
with the system as it is today and the system   as it is today means that for a pension fund an 
insurance company a sovereign wealth fund etc   they have fiduciary duties they have to 
be paid for the risks they are taking   full stop and you cannot play with that i remember 
a conversation with a pension from a guy who said   you know better i cannot tell my guys that they 
will make less money on earth in order to be   rewarded in heaven it might be working i mean 
when you're very wealthy and you have your own   family office you can do whatever you want with 
your money but if you manage other people's money   you can't do that so to come back on your point on 
performance we target commercial returns because   this is it full stop and we don't even question it 
and second of course we add an impact perspective   to that and that's critical and to get there we 
have developed our own impact rating mechanics   which we have called sdg blue it's an impact 
rating the way you have credit trading the idea is   the way you can compare the credit trading of a 
country of a sovereign issuer to the credit rating   of international organizations the credit rating 
of a bank to the credit rating of a corporate etc   we wanted to be able to compare the impact rating 
of a dollar the impact value of a dollar invested   in a project in education to a dollar invested 
in project b in health etc even if educationals   are different and so we put our system together 
so first of all financial returns second impact   rating measurements we have partnered with the 
inter-american development bank and it's very   important that we have this public private 
cooperation i mentioned earlier so it's it's   a important part fourth we have been backed by by 
a number of individuals which believe that now is   the time to to see finance a little differently 
people like a strong voice like paul paulman for   instance or emmanuel faber in france we had 
some trouble in the past few weeks and others   and so this is this combination of impact trading 
system individuals supporting the idea and opening   doors on the ground uh the partnership is a 
public institution and very strict on finance   and impact this is what it means so we started 
with a private credit fund in latin america   we've closed it last year we're investing it 
and we continue now we've passed i think there's   a viability threshold so now we will continue 
and the idea is to roll this model in different   continents etc but that's that's really where 
we're coming from where do we invest i mean   projects which are mostly mid-sized companies a 
little bit of infrastructure mid-sized companies   the investments we have made 
which are public are in health   in access to uh to finance in 
infrastructure so it's very diverse   but it's it's connected to the 
sustainable development goals framework it's really an and the vast majority of our 
lp investors are institutional investors   okay okay how interesting and you mentioned that 
you started in south america and i perfectly knew   that with in partnership with the inter-american 
development bank but you said you intend to move   into other geographic areas in future yeah if i if 
i project myself five years or ten years down the   road uh i'm convinced that blue like and orange 
will i my dream is for brewer is to to be one of   the go-to place if you want to to have uh to make 
impact in emerging and developing economies so i'd   like to be present in latin america in africa and 
in asia but you know you have to do once at a time   uh i move from being a big organization to being 
a small entrepreneur with my partners and uh so it   takes time you have to learn patience of course 
of course of course but i'm very glad you're   it's working that's a the good news is that we 
we've passed all these moments right now i mean i   i see the future and i'm not supposed to say that 
but very happy to need to take any calls offline   sorry sorry when i when i asked financial returns 
i meant you know above market returns below market   returns no no i wasn't i wasn't willing i mean 
i'm very happy to comment offline on this and i   i have precise answer to all of this but i'm not 
allowed by my regulation to to do this type of   marketing statement now of course of course of 
course absolutely absolutely um so we've got   a question from the audience but um since we we 
are perfect in time um i would like to i'm gonna   ask you that question later i would like to play 
a game with you bertrand this is a sword q a   where if you don't mind you provide short 
spontaneous answers that's very scary   so if if i say a or b you can still say c you 
don't have to choose either one or the other   but i have a wild card like in geopody as you know exactly exactly totally totally i'm not going 
to say paris saint-germain or ac milan no no no i know the answer the first question to 
you is would more women in leadership roles   lead to better social environmental and 
economic outcomes actually that's a good   question because i'm working with a good friend 
on a book on this on a female leadership what   i strongly believe in is that from a leadership 
perspective there are not that many differences   and uh or they are cultural 
and they are you know uh   what for me is extremely important is uh the 
mixing it's a big city you have men and women yeah   i i don't like places where you are 90 of women i 
don't like places where you have 90 percent of men   and so i think to have a reasonable equilibrium 70 
30 60 40 is about right and i remember i said that   uh i know creditor recall is is a tough topic 
in italy these days with the offer on credible   but when i was cfo we had this monthly discussion 
with the cardiac recon team and which are the 39   presidents and 39 ceos of regional banks and at 
that time out of the 78 people for some others   you had like three or four women and i remember 
i said once i think the atmosphere would be a   little different instead of three we had 30.

And 
see it made a lot of progress so it's moving the   right direction so for me the key is equilibrium 
thank you very much should central banks continue   using corporate bonds and bank loans of high 
carbon emitting companies as collateral albertan   i don't think so or at least they should start 
having a real policy on that i i know christine   nagar as part of his strategic review is moving 
in that direction there are a lot of debate   here uh i i remember when ten years ago or 
yes or six or seven years ago i spoke to a   former head of the ecb you can try to imagine 
which one and uh i see well you i mean there   is an international agreement on on climate 
so it's not just that you make up your mind   i mean your shareholders have signed a paper in 
which they say they support this so why don't   you go big on on green finance and buy assets 
which are related to that and remember the guys   say yeah green and why not blue red or yellow or 
purple i see well it's a big difference there is   no purple agreement there is a green argument and 
and now they've moved in that direction so i think   of course all these shifts are difficult i mean 
there are a lot of constraints but i definitely   support the idea of being consistent 
john maynard keynes or milton friedman   the truth that i just finished a biography of john 
maynard keynes so i didn't know the guy i had read   his books when i was in school and i'm fascinated 
by the guy much more because i'm fascinated by   freeman freeman actually uh i mean he influenced 
when i was in school et cetera but really the uh   cancer is an amazing personality because he 
was much he wasn't an economist by background   he became an economist but but he targeted the 
prosperity of a democratic system et cetera so   i i really would say fell in love but i i i really 
felt that this i if i had somebody to meet today   and go on vacation with it would be case yes not 
necessarily what people have done with skates   after he died but with a personality for sure yeah 
yeah i i didn't read the book but i listened to an   entire podcast on keynes and there's so much we 
don't know about this oh we had an amazing life   amazing your favorite and you don't just 
you understand that i love anecdotes   and i have a daughter whom you met actually 
she's studying in balcony in milan so i have   a vested interest in italy and uh before 
she she left for italy i took her on a trip   uh just the two of us that dad and daughter 
uh in the north east maine and new hampshire   in in june 2018 and we went to bretonwoods this 
is a famous place where basically we created the   bretton woods order the imf the world bank xr 
where keynes and his u.s counterpart discuss   the future of the world and i remember because 
it was more or less at the moment where   the g7 in canada collapsed with trump refusing 
to sign the argument and uh i sent a note to my   friend i was participating to the g7 and i 
told him i was my daughter where everything   started i hope you're not where everything uh 
not at the place where everything is ending   and i had an episode for kane someday well 
i'm glad we know we have a new president okay okay interesting interesting your favorite   head of government ever today or 
you know a past head of government that's a tough one uh i i think one of the 
the life i found the most fascinating although   i'm not sure i would go on 
vacation with miss churchill   uh i i think these guys has made amazing 
things has made amazing mistakes he's   typical larger than life person a little 
bit like the two reservoirs in the us   or the goal in france so so i i don't know i mean 
i'm fascinated by these people which have emerged   in particular circumstances which might have been 
nobody if nothing had happened and that become   as you said with victory i mean when you 
see the moment you know if there had not   been any uh second world war neither the 
gold nor churchill would be known today   totally totally your favorite spiritual 
leader well i like pope francis a lot   i had the privilege actually to   see him from close and in particular when he 
explained to a small group of people what he   meant with the globalization of indifference 
and the necessity to fight against it i must   also say that i had an enormous privilege to have 
a private visit at the vatican under john paul ii   and i remember we were asked to be that 5 a.m 
in the morning or something some of you probably   have had this experience and then you you are 
accompanied by a swiss guard to the private chapel   of the holy father and then we entered we were 
with a few friends and you entered the room and   i remember it was in late 1990s so he was already 
pretty tired and i saw this person from behind   and i i really had the thing is he was carrying 
the the pain of the world i don't know how to   characterize this but i say wow this guy every 
morning is praying for all of us and you felt   something in the room and so these two moments 
have been quite extraordinary uh for me so i   am i am biased because i'm catholic and i have 
the privilege to to me two of the most powerful   voices uh but that's uh that's it amazing amazing 
look i've got other questions but i'm wrong sorry   i cannot no no okay let's try to to make them very 
short because we've got three questions from the   public it's fascinating but i would listen to 
you for hours but i don't want to take more time   the alternative to neoliberalism one word 
impact have we reached the tipping point on   global awareness on sustainability issues and i am 
referring to gladwell's tipping point yes or no no   meaningful change equals innovation plus social 
commitment plus at whatever you want to the   formula plus impactful finance what else would 
you add to the well-known essentials of happiness   nurture personal relationships do work 
that's meaningful want less fare less   so i didn't understand happiness normally would 
they say spiritual leaders such as francis but the   dalai lama well normally the definition is like 
you you shall nurture personal relationships you   shall do work that's meaningful but also want less 
want less especially material things and fear less   would you add something to the formula or perhaps 
that's perfect for you i don't know uh well i i i   think and it's also a quote i've made quite often 
this past few days which i brought from toy story   in war and peace everybody wants to change the 
world very few want to change themselves and so   ask a lot about what you can do and not nobody 
will make the decision for you and it's very   difficult i mean i'm paying a heavy price every 
day my kids criticize me they say daddy you're   asking for us to be sustainable and you keep 
drinking water in plastic bottles and they're   right it's being a change to be the change you 
want to see in the world and everything comes from   inside otherwise um is it true that's difficult 
to find good italian pizza in washington dc okay okay okay okay thanks for the trip for the for the 
tip um okay first question from the public batman   and we've got three um it's from roxanna 
cama firstly thank you for your amazing book   my question is let me move the q a yeah my 
question is what do you think is the role of   the younger generation in leading purpose finance 
what measures could be taken to influence slash   educate students young graduates to take part 
of this change and build sustainable economies   so there are a lot of questions in in one question 
so i think first of all the young people can do   a lot on their own the way each each of us can 
do a lot at the end of the day as i said if we   don't change ourselves there is no way the world 
is going to change so we have to be of course we   have different capacity but i think people gather 
today have more influence than the average people   on earth so should it's not being flattering it's 
just the truth so we should be very conscious uh   of that but i remember a conversation i had 
with paul pollman at that time he was the ceo   of unilever and i told him why did you change the 
course of unilever and he told me it's not just   because it was my strong conviction it's also 
because the uh i couldn't attract any talent   and today if the young population say i don't 
want to work in companies which produce crap   which we which are doing bad things or et cetera 
that will put pressure on the company so it's not   just about investors if consumers say i don't want 
to buy this type of thing so this type of service   so we have we have the capital to to have this uh 
pressure on people and they're young like anybody   else so i think it's extremely important the 
second point because i have kind of considered   myself in retrospect what i've learned that school 
has influenced me for many decades and so i think   it's really time to to to work on the business 
schools programs and university programs etc   but what are you being taught at school will 
have a lasting influence on what you do and   it's very interesting because a month ago i was 
asked by hccs or the french paris business school   to give a keynote speech to all the first-year 
students so they had just done uh they had a   first quarter now compulsory introduction to 
impact because they did a little research with   companies so very nicely so and then you realize 
that it's like a separate box and then the finance   major hasn't changed at all and so you have a 
problem to reconcile things so on the one end you   have a track called purposeful leadership on the 
other hand you have the track the finance major   and and so for me it's very important to start 
influencing all these things and that that will   take time and for those of you who are in the 
academic world which are teaching etc i think   it's important to push these ideas uh that's what 
i'm telling my students when i was in your shoes   that's what i heard now you hear me try to to 
see what you do uh but today uh uh to come back   to your questions the jury is out so they have 
conflicting things and uh so we have to help them   make their i'm always reluctant because i don't 
want to force people to do things i mean at the   end of the day who am i to tell you this is 
the right way for impact i mean there might be   different ways but at least to to open their mind 
and say there might be other ways to do things   and it is true that we still emphasize 
the old bifurcated system of returns and   philanthropy thank you bertrand another question 
for everybody with from a very good friend who is   actually professor at catholic university tommaso 
question about system we talk about sustainable   investments but finance system is sustainable 
banks and bank systems in many countries are   very fragile but somehow leading the games 
over the governments we need more cooperation   but concretely who has the power to make some 
concrete steps the german french partnership   question tag it's a those are very good 
questions one of the big difference between   now and what happened in 1945 in bretton roads 
basically the us imposed their way to the world   even kent could not do anything he was 
the smartest by fine buttonwoods but   you know as apparently studying once asked about 
the bat you can the vatican how many divisions   and in 1945 all the gold was in fort knox and so 
even if you were smart you had no choice so the us   was a master of the world in the 1970s let me put 
this was the anglo-saxon was a master of the world   in particular the u.s and it's it's no wonder why 
the consensus was called the washington consensus   today it's more complex because you have no 
master of the world so we'll see with biden he's   apparently willing to wish off the u.s leadership 
and re-engage but also as i said once it's america   first with a smile we shouldn't be fooled by 
this i mean it's it's very very much driven by   a domestic agenda we have the chinese obviously 
we can't ignore them and they were not existing   in 1971 i mean even if it's the same years and 
kissinger went to beijing with nixon and uh and so   i believe that the europeans have a particular say 
in this uh as you rightly reminded us probably uh   the the europeans are ahead of the curve with 
uh with the green recovery package and they   stick to that i mean they're not being perfect 
on every front as you very well know but on this   i think they're still there they put together 
this taxonomy package they put together this   non-financial disclosure directive and so so 
there is a lot that is happening in europe and   i believe there is a way for europe to engage 
the rest of the world and propose something   so you can see it from two perspectives uh ideally 
and interestingly i gave a lecture to a chinese   university last week and it was pretty interesting 
because that was the first time i had i think they   told me i don't know whether it's truth i had 
20 000 people listening to me which was very   exciting that's a positive news the negative news 
that it was at 11 p.m dc time so it was not so uh and i told them because i raised exactly the 
same question and i say my my dream is that we   are capable of coming together china europe 
the us and the rest of the world to define   what is sustainability what is resilience what 
is inclusion uh so that's what i'm dreaming of   but let's face it it's gonna be a long 
way so there is a second best which is   are we capable to have a western vision of that 
i know western smells cold war but so for lack   of a better world or let's call it g7 way that's 
the second best and the third best which might   be actually what we work at the end is a european 
view because what i wouldn't like is the europeans   to be once more naive so we've been ahead of the 
curve we spent more time and more money around   this but at the end of the day in particular the 
americans smells good business and they are good   at doing that i mean no wonder why the railing 
agencies why the largest asset managers except   for americans so will the system be defined by 
the european the european commission taxonomy etc   or will it be defined by blackrock bloomberg 
and and the rating agencies i i don't know   uh but you should all keep in mind that it's 
not just uh the technical conversation it's it's   discussion about our values actually what we are 
discussing the norms that will emerge from this   big uh planetary discussion will be defining what 
is good and what is bad in 10 or 20 years from now   and it's it's it's important questions 
and if you are let's say a middle east   somewhere in west phone and you say in 2045 
i want to invest in in a good impact system   which one do i choose do i choose a bloomberg 
one or do i choose a taxonomy or do i choose the   beijing one and that will have a lot of 
impact and that's that's where i think   don't be naive as european let's keep pushing 
make sure our norms are taken in full account   and uh and then try to engage with others 
and try to come to do something together   as you very well know it's not the case for for 
for accounting standards we still are struggling   with two the u.s gap and they're more than that 
but ifrs and the two that ifrs are largely a u.s   inspired and the eu has kind of abdicated this 
so i don't want this to happen again we should   not abdicate a second time we have to be strong 
on this totally there are two more questions but   am we the time has gone and i think you might have 
other i don't know please tell me would you take   another question or not or we stop here it's 
been the first one we just won just one minute   my office in washington today for 
the first time uh since last june   and uh and the team has organized a lunch 
with with a person living for europe   and so this is the first lunch 
with the whole team in a year   so i told them i'm going to be a little late but 
i don't want to be too late i'm sorry for that very quickly from julia galluccio how do you 
see the eu effort on taxonomy perhaps you answer   already of sustainable activities that um that it 
will help there's a small mistake that will help   in finding the right path to transition is the 
is it the right way to achieve the good results   do you see a need for sustainable finance to 
address the climate change adaptation needs in   europe no i think i don't know whether it's a good 
or the bad way the european way that's the only   way we can do to have this big commission with 
a multi-stakeholder 27 countries etc and at the   end you have a sick book i i think it's kind of 
okay but we have to make it marketable as soon as   possible i mean we have to sell it to the rest 
of the world and to explain what we mean with   it as i said it's really time to engage because 
what i'm hearing in washington is that biden is   he gets that he has appointed somebody in his team 
to follow climate finance somebody a treasury etc   the all-american ecosystem the whole academic 
system is behind it there is business and the   people that will define what is impact will make 
a lot of money so again we should not be naive and   we have to push hard for what we've done because 
at the end of the day we started a little earlier   uh we are more genuine more sincere but sometimes 
we are not as market friendly so that's uh yeah   yeah yeah totally agree again well bertrand thank 
you very very very much for this thought provoking   talk thank you for um just just showing us the 
bottle half full because the the more the world   sinks into or the deeper the world seems into 
chaos the the greater our responsibility to   to radiate kindness empathy and generosity 
and this is what you've done today with us   by accepting our invitations so really thank you 
very much and whenever you come to milan you will   be welcomed by us another excuse with my daughter 
in balcony so and us will be there welcoming you   thank you very much thank you everyone rest of 
the day and good luck for the end of the party   the same for you in the us on the 
other side of the atlantic bye-bye

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