31 Jan 2019
EUR 147 million
Infrastructure, transportation and telecom
“Working towards a sustainable future inspires us to be both visionary and pragmatic. Your eyes need to be on the end-state of the sustainability transformation, yet the reality of everyday life makes it necessary to work on step-by-step improvements. The Chinese saying ‘A journey of a thousand miles begins with a single step’ describes this well”, says Luca De Lorenzo, NIB’s new Head of Sustainability and Mandate.
Prior to coming to NIB, Luca De Lorenzo headed the climate, energy and society unit at the Stockholm Environment Institute (SEI), researching how to transform energy politics, economics and business into sustainable models. During this three-year stint, De Lorenzo co-founded the Stockholm Sustainable Finance Centre, dedicated to accelerating the shift in capital investments to deliver the UN Sustainable Development Goals and climate targets.
Mr De Lorenzo has a background as an engineer in the corporate energy sector and in management consulting.
What made you interested in NIB?
“Financial institutions have a critical role to play in the sustainability shift we face as societies. I share NIB’s vision of a prosperous and sustainable future. Hopefully, I can contribute to NIB’s ambition of making the sustainable transformation succeed”, Mr De Lorenzo says. “That is why I am here.”
“A lot of changes and developments are of course driven by innovation and technology improvements. However, the allocation of capital to such investments is a big part of the sustainability shift. For the green transformation to succeed, financial institutions need to introduce new ways of allocating capital across our economies. Are we seeing all the reallocation of capital that we need to see and at the pace needed? No, we are not.”
Since the start of September 2018, Mr De Lorenzo has been heading NIB’s Sustainability and Mandate unit, which consists of five environmental analysts and three economists. They assess all loan projects for their potential contribution to NIB’s mandate of increasing productivity gains and environmental benefits through its lending. The unit also follows up on the actual impact after a project is completed.
What new initiatives are your team currently working on?
“First, we are going to step up the way we handle non-financial information within the Bank. This means that we will use a methodology to assess the environmental, societal and governance aspects of our investments to understand our clients, on both the lending and treasury sides of our operations. This will also give us a good framework for stakeholder dialogue.
“The second challenge is one which the entire financial industry is struggling with; trying to assess the actual impact of our investments. It is tricky, because you have to engage with clients in a new way and without any established practice. You need to go back to projects once they are materialised and continue the discussion. Another other element of the trickiness is the time mismatch, which can make it very difficult to associate the impact with the investment decision. However, I think none of these complications should stop us from trying to define a pragmatic framework for impact assessments. We cannot stop simply because it is challenging.”
How do you see NIB’s role in bringing about the sustainability shift?
“NIB is clearly part of defining the ecosystem for sustainable finance. I see NIB as having two distinct roles as an international financial institution. One is of course through its own operations, and via its mandate rating system, which drives NIB to invest in sustainably worthy projects. The other role is to lead and have a trusted voice in the dialogue. Here I think along the lines of NIB’s role in the EU High-Level Expert Group on Sustainable Finance and NIB being re-elected as a member of the Executive Committee of the Green Bond Principles. NIB can act as a change agent and have a constructive voice within the sustainable finance dialogue.
What drives you?
“Purpose. It is the ultimate purpose of what drives me. That is why I joined NIB. When I read NIB’s mission and the vision, it is right for me. I share the ambition. Then comes the question of how do we make it happen. That is where I hope to bring my skills, drive, energy and passion.”
What are your first impressions of Helsinki?
“I have to admit that, as a Southerner, moving from Stockholm to Helsinki is not that big a change. My first impression is that Helsinki is quite dynamic, nice and compact. The capitals of the Nordic countries generally appear agile and able to change fast. That is, by the way, a characteristic we all will need to learn in order for us to succeed in the long-term vision we have set ourselves.”