 So, good evening. Thank you very much for coming to this meeting of the Young Professionals Network. You're all very welcome to the Institute. My name is Max, I'm the Energy Policy Research here at the Institute of Melbourne. I have the privilege of chairing tonight's event where we're joined by Laura Houston. Just a few matters of housekeeping before we get started. Could I just ask you to just turn off your workbelts, put your mobile phones on silent? Do feel free to tweet, of course. And if you want to be informed about future events, if you're not on the mailing list, or if you know somebody that would be interested in joining the Young Professionals Network, we are always looking for new members. And as you see, it's a very informal, nice way of networking and getting together. And of course, having some interesting speakers talk about a variety of subjects. And if you know somebody that might like to join, you can email our chair, keen.macathie, keen.macathie, at ia.com. Right, I suppose that's all the housekeeping for now. As you, I'm sure you're aware that in the global governance structure of decarbonisation, of climate change, mitigation and adaptation, we're increasingly moving towards the sort of bottom up approach, replacing the top-down approach. And then in that context, the importance of sustainable finance, I suppose, has been recognized more and more, so that is explicitly mentioned in the important Paris Agreement, which was concluded in 2015 in December. And of course, the EU has also established a special task force quite recently as the proposed legislation towards 2030 is also moving towards a more bottom up approach. So in that context, we're very glad to have with us Laura Houston, who's the Director of Sustainable Finance with Sustainable Nation Ireland, which is a not-for-profit organisation hoping to promote Ireland as a financial centre for green finance. And well, all that's left for me to do is I suppose to ask you to give Laura a very warm welcome and we look forward to your presentation. Okay, thanks for the lovely words, Max. I might start on me. So, just to give you a bit of background on me. So, my background is I did law in college and then strangely enough, I went on to do accounting and tax. So, I trained in Arthur Anderson, which was subsequently taken over by KPMG and I basically have been there for 20 years up until last summer. I wasn't there the whole time. I did escape for five years. I went travelling for a year to Australia and I went into Airtricity, the Airtricity Group before it was acquired by SSE and I was working there for four years up until the sale in 2008 and I was the head of tax there. And so, Airtricity was an Irish headquartered. It had started out in the late 90s, early 2000s, literally in someone's office. It started out in someone's spare room. It started out there and they were literally walking the fields seeing where it was windy. And it went on to become Irish headquartered internationally and globally successful wind farm group that spanned the entire value chain from development of wind farms, bringing them through construction into operation, holding them long term and supplying the electricity to end customers through supply companies that they would set up. So, hugely successful Irish headquartered success story and the company the group was sold for 1.8 billion in 2008. And after that, I kind of thought about what I wanted to do and I went back to KPMG where I went back to the partner that had interviewed me when I came in previously and I continued to work in the renewable energy team in KPMG. Mostly focused on transaction structuring and mostly in the renewable energy sector. So, fairly specific and the transaction structuring I'd be doing would be like acquisitions and dispositions and joint ventures. There's a lot of that in the wind farm sector. And also as Irish headquartered or companies or funds were expanding into new countries, there's a lot of structuring that needs to be done around that. So, I'd kind of been working on all that stuff. And while I was working there, I did move beyond wind farms, thankfully. And I would have seen, I suppose, people started to work on solar projects. They started to see energy efficiency financing coming across the way I was looking enough to work on an open hydro group who were developing a new tidal turbine technology. So, you know, I kind of had quite a broad range of finance, but no doubt they had gone into green finance, which I'm currently in. So, how did I get into green finance? It was around this time last year. So, Sustainable Nation came to KPMG and KPMG is great supporter of Sustainable Nation and they asked KPMG to do a report on the global green finance like landscape post the Paris Agreement and Ireland's place within it. So, what was Ireland's green finance credentials if any? We knew we had some, but, you know, it was like literally quantifying them and figuring out what we had. And so, I suppose I did that report and I kind of just looked later on about where I got to with that report. But I guess the one thing it made me realise was that I'd actually been working in green finance for 15 years. I just had never called it that. So, I did the report. We presented it to the government, the Department of Finance at the end of June last year and I left KPMG the following day and I joined Sustainable Nation and I've been working to progress the initiative that kind of fell out of that report ever since Finance Green Ireland. So, that's me. That's my background and I might just go on and before we start get into anything else go through a few definitions. So, green and sustainable finance it's a high growth emerging international financial services sector. So, if you want to compare it to something it's like aircraft leasing except in fact the opportunity in the market is even bigger. So, it's a niche sector within the international financial services sector. Green finance at its absolute simplest it's about the finance and the financial services to support that that will contribute to tackling climate change. So, we need to invest in infrastructure and innovation if we're going to tackle climate change and transition to a low carbon resource efficient economy and that's what green finance is about. Sustainable finance is a slightly broader definition so it includes the finance around climate change but it's broader because it's really linked to the UN Sustainable Development Goals. So, do you think there are definitions? I suppose when you come to the financial sector and it's no more than when you speak to anyone everyone always wants to know okay what does this mean for me what are the opportunities here for me. So, I do think that we when speaking to the financial sector talking about polar bears or going vegan or tree-hugging etc that's not going to move to the financial sector. You need to actually show them the risks and opportunities for them the risks and opportunities for our economies and the risks and opportunities for the financial sector in particular because that's how people will engage and I think that's what we're really seeing now the financial services sector see green finance as a business opportunity and there are other ancillary aspects like those that are driving it but I do think that the profit motive I think motivates everyone so I think that's really the way to engage the financial sector. So, the context for green finance and why it is suddenly such a high growth sector it really comes back to the Paris Agreement and the UN Sustainable Development Goals back in 2015. So, everyone is probably in the room it's probably familiar enough with those huge you know really ambitious targets to really change the way that we we live in the world and ensure that we have more of a sustainable existence and sustainable development going forward and but none of that is going to be achieved without money. So, money is key and they recognize that at the time of signing those agreements and what you see since then so those agreements that are the real economy targets I suppose as you say but since then what you see is a multilateral and international organization one after the other setting up green finance groups setting up sustainable finance initiatives setting out policy recommendations and you can literally list them all the UN, the OECD, the G20, the G7 and most recently the EU. So, you kind of see at that multilateral level all these policy documents and policy recommendations going on but how are we going to shift money towards green infrastructure and green innovation because the money is there you just need to shift it from I suppose the brown stuff to the green stuff and so you do have all those recommendations coming out and then you see it moving down to the national level so China coming out with policies and implementing things fairly quickly and all the countries then taking taking action and encouraging green finance and then you come down to the national level and what you're really seeing is national financial centres really taking up the gauntlet on green finance and setting up their own initiatives so there's about a hundred financial centres in the world 20 of them now have green and sustainable financial centre initiatives and that's in the past two years so it's just an indication of how you know everyone is seeing this as an opportunity why are they seeing it as an opportunity it's because the numbers are so big you're talking about that we need 90 trillion to 2030 90 trillion needs to be invested if we're going to achieve keep within our climate change targets and achieve the U.N. sustainable development goals in Ireland they're saying it's 40 billion so and that's probably a really low estimate I think there's new estimates currently being worked on so that is just a huge amount of money the opportunity is huge if you think about all the bonds equities funds all the financial services players that are going to be moving that money from one place to the other and ensuring there's safe cards around where it's going invested etc etc and making sure that the returns are coming back there is a huge financial services opportunity and that is part of the reason that the national financial centres are also setting up green finance initiatives I do think the other part of it is that the financial centres see this as an opportunity after after the crash after the crisis to you know make a contribution and to show how finance is connected to the real economy because I think there is a bit of a missing link there at the moment and has been over time it's been increasing over time that there are these people in the financial centres in London or wherever and they're doing crazy things with derivatives and securitizations and things that nobody on the street understands and actually finance for a sustainable infrastructure is quite a nice thing to explain and quite easy to explain it's literally wind farms most renewable energy like to take renewable energy for a start it's capital intensive you need the money upfront it's like buying a house so and that the the cash profile is quite nice thing because you buy your house you buy your wind farm you invest you build your wind farm and then your fuel to power it is free so all you have is your own O&M costs and various other costs that go through but it's quite a nice profile and you can it's quite an interesting way to explain to people listen this is how the financial services sector benefits us benefits the real economy that wind farm wouldn't get built unless we have the finance to to build it and you need the financial services sector in between to connect the two so the people with the money and the wind farm on the ground so I do think there's parts of that that is why the financial centres are stepping up and just that it's their contribution everyone is making contribution towards climate change and this is a real opportunity for the the financial sector to make a real significant contribution towards climate change so in terms of green financial issues themselves as I said there's about 20 of them globally and it usually comes from two parts it kind of has to be public and private so it has to be the national government want to ensure that their financial centres are rising to the challenge and are ensuring that I suppose all these policy recommendations that are coming down from the EU or whatever that their national financial services sector are embracing them and pushing them forward and also the key market players in your in your country needs to come together and themselves to kind of develop sustainability and see it as a business opportunity and both of those are present for our Finance Green Ireland initiative which I'll come on to now in a minute and is what has led to us setting it up and just as those two talk about sustainable finance more specifically and give you a few specific examples so if you look this these are dimensions of a sustainable financial centre and in fact they're probably the dimensions of any financial centre full stop but sustainability and sustainable finance means a slightly different thing to every single one and you need to be talking slightly different whenever you're talking to every different group because they don't necessarily all come together very much so if you're talking to banks you're talking about green bands you're talking about the business opportunity that is lending to renewable energy projects or lending to sustainable commercial real estate retrofits or that lend mid you know energy efficient mortgages lending and but you're also talking to them about risks so if they're making loans to small SMEs that are based down in in a a town that's like prone to flooding are they taking that into account when they're making their loan because if they're making it a loan to a business that it's going to be flooded out of it repeatedly every year for the next whatever year it may have to close down so are they factoring in these risks so it's it's opportunity and risk all the time and but that's what it means from a banking perspective from a debt capital markets perspective the the main game in town is green bonds i don't know if you're familiar with bonds generally but so it's just basically that you're a company going to the capital markets and raising debt on a base game and all green bonds are are bonds that raise money that are put to a green youth so they're exactly the same as bonds anne vanilla bonds and any other way it's just that there is this framework which is both a use of proceeds and a reporting framework to verify that money is actually used for green and to for green uses so and just to be really clear green means right across the the sustainability sector so the sector so it could be renewable energy but it could be waste it could be water transport agriculture you know it's kind of thinking that bigger the bigger picture it could also be and debt that's being raised for energy efficiency products by product manufacturer so green bonds are really the main game in town and the opportunities there from an irish perspective are really you know around our irish stock is changed so urinex dublin that considering whether we can become the number one location in the world for green bonds we're not at the moment we're number one location in the world for listing bonds for stock which is unbelievable but we're not number one in the world for listing green bonds Luxembourg is so you know that's that'll be the kind of things that we're talking to debt capital markets equity capital markets and is there you'd be thinking about green equities and those are companies that are producing products or services or developing projects infrastructure projects that are and sustainable and generally there's a certain percentage of their revenues or and that are derived from the sale of green in quotation mark uses then they would be regarded as green equity there's issues for the insurance sector you'd be thinking of catastrophe bonds you'd be thinking of the insurance sector both as a carrier of risk so as ensuring risks but also as an investor because the insurance sector is such a huge investor they can you know really make a difference if the insurance the insurance sector just decides to invest all its insurance policy proceeds set of minds and until it has to pay them out if it decides to invest all that money in climate change actions that would make a real difference globally you know so the insurance sector is an important role to play investment is really important there and if you're thinking about how people factor environmental social and governance factors into their investment making decisions and ideas example there would be green infrastructure funds so just plain infrastructure funds but it's climate aligned infrastructure that you're talking about and another example would be the more traditional funds so usage funds but that they just have a green strategy and so that could be that they invest all across the water value chain because they see that water is going to be a really limited resource going forward and they think that there's real growth opportunities and stocks in that area and then there's you can literally do that all the way around what really important on this diagram I think is like don't forget policy and public finance so policy can really set public finance can really set the lead and our the ISAF the RSVM wealth fund is really strong on this and really strong in their investments and the things they're doing and really showing that showing the path and leading the way in terms of this is this is responsible investment this is a good way to invest by incorporating ESG and professional services firms they're kind of down the line as well but they'd be advising companies and investors on how to invest how to develop their their their activity and then they'd be auditing and reporting on it or advising from a legal perspective or advising from a tax perspective so it's like keeping all these little sub sectors it's nearly you have to figure out okay what are all these sub sectors interested in and then how do you speak directly to them so it's not the same the same topic if you talk about energy efficient mortgages to the insurance guys they're not going to want to listen to it or you know you could you could kind of take that example everywhere so that in order to kind of get finance green on Ireland in order to get any green finance initiative together you nearly need to bring all those people along with you and speak speak to them the risk and opportunities for them specifically so this is our initiative and this is like I suppose where I came into the same donation so we have two aims with finance green Ireland one is we have amazing green finance credentials we want to promote those abroad to get more of the same so this initiative is about jobs and economic growth for Ireland that's all it's about and so if we can tell people abroad what our green finance credentials are we're hoping to get more of it and we have some really better green finance credentials that's not enough and the second thing though is let's not forget our domestic decarbonisation targets so public sector money is not going to fund it's globally recognized that public sector money in any country is only going to fund 10 to 15 percent of what you need to invest in infrastructure and innovation to achieve your climate change and decarbonisation target so private capital is vitally important how do you get the private private capital is looking for these investments private capital doesn't want to put its money in a bank that's zero percent or minus at the moment private capital is actively looking for these climate aligned investments kind of aligned long term investments and but they need the right policy and regulatory certainty so they can make their investment decisions and know that they're making an event that policy won't change in the future and impact on their return so we kind of advocate for policy regulatory certainty in that area and there's the two things that we do but really importantly when we when I went to look at all the numbers I thought like I started out totally fresh I didn't I didn't realize I've been working in green finance you know I really had to kind of go okay what is green finance and when you went and looked at the numbers and looked at what was in Ireland because we're so amazing at at international financial services generally we have a lot going on so we have four billion of just traditional funds so use of funds with the green strategy that are domiciled or managed here we have six billion of green equity that's mainly on the art of stock exchange that's mainly king span and green hope renewables but six billion it's no kind of out of my thing and we have 11 billion of listed green bonds they're actually kind of aligned bonds but and they're a type of of green bonds and the art of stock exchange as well but what's actually really special about us is and the seven billion that's in green infrastructure funds I'll tell you why now so the green infrastructure fund story is really interesting because it goes back to air trusty the company I made at the start so what air mentioned at the start so what air trusty realized and I suppose over the span of its development was that renewable energy and wind farms and similarly solar any kind of renewable energy it's all about the upfront capital it's all about the financing and because they weren't a utility most of the companies at the time that were developing renewable projects globally were utilities they had huge cash balance sheets they weren't short of money they were going out and they were financed off their balance sheets air trusty didn't it was going out initially it was really going out there wasn't even a feed-in tariff for the first wind farms that built and it actually raised the money through partnerships they were called equipment partnerships at the time and it continued in that vein it was really innovative about how it got money it always got the maximum project financing it could get but on top of that it went further so when they were getting a tariff from the national utility that they didn't like for selling their power or that they thought wasn't enough they said fine we'll set up a supply company and we'll find our own customers and we'll supply directly to them because that will mean we'll be able to retain more of the price that we sell to them than otherwise we would have been able to retain which makes our business as a whole viable similarly they did really interesting things around mezzanine debt and they did just loads of really really innovative things from a corporate finance perspective and what you found then was there was this real there was this cluster of talent in electricity renewable energy finance talent and that since then has gone on and has spread out into different companies and what you saw is that those and it wasn't just in electricity it was also in board gosh and it was also in ESBI and what we saw was those those initially who were renewable energy developers becoming renewable energy infrastructure fund managers which is back to that point that it was all they realized it was all about the money and so you need to be at raising money all the time and then you could you could kind of manage everything else so in 2008 when the largest asset manager in the world BlackRock asset management went out looking for a renewable energy platform they decided they need to get into renewable energy this is the way the world was going they wanted to be able to offer these investment opportunities to their customers their clients they looked around the world and they picked a team out of Dublin so the NTO team who had some of whom had come from electricity and NTO was ridgely and shareholder in electricity they took Jim Barry and his team Rory Conner, Teresa of Flynn and they based their renewable energy platform in Dublin around them that is just such an amazing story and that's down to the renewable energy finance talent that we had here and what you see and it's not dissimilar to the aircraft leasing story with GPA what you see is more of those stories and of those people going into different companies and just spreading their knowledge and we have a really interesting renewable energy finance talent coaster here and because of that we've a brilliant professional our professional services firms in Ireland are experienced with managing green asset management so I was sitting in KPMG but I was working on projects in Mexico in South Africa and often I'd be working with my KPMG colleagues but because South Africa there never had been a wind firm built before so you know the way when you're kind of talking through the issues they'd be going through the same issues we went through a couple of years previously so you're kind of bringing them along the journey and if you have the fund managers in Ireland you have the brains and you have the decision makers behind the fund and then there's loads more economic roles loads more jobs out of that when you have those people here it is really key and so I think our three credentials are with this renewable energy finance talent coaster with professional services firms who are just brilliant and that's it's not just KPMG it's across the whole I kept you know the big four and your legal firms their experience with dealing with green asset management and then we are just amazing at international financial services so as I mentioned we're first in the world for bond listing I just think that's astounding we're such a small country and we're number one in the world we're number one in the world for listed funds and we're fourth artistic quarter of financial services in Europe we just have amazing credentials around international financial services and it's even more amazing when you think that it's only in the last 30 years that we have a financial services sector so I do think we have a lot to sell we have a lot to sell abroad in terms of our green finance credentials and we just have to get out there and start chatting about it and so for that reason we put together the national committee for finance green Ireland so Sustainable Nation Ireland has developed the plan and what we're going to do how we're going to promote this how we'll go about it but you need champions from all those dimensions of this of the financial center that we looked at you need champions from a domestic bank from an international bank from a fund service provider from a fund manager you know you need all of those and then you need the public sector on board you need the department of finance there you need the department of climate action you need all these parties in order to really advance the purpose of finance green Ireland and I'm really the committee members are there to kind of say okay that's a good plan that's you know no we should do this we should stop the other but also they're there to be champions for their sector because if we want to make a real difference with green sustainable finance everybody needs to act on it it's not something that someone needs to hold to themselves the opportunity is so huge it's 90 trillion that's figure everyone refers to it's just huge beyond reason even the the financial center initiatives themselves don't say they're in competition they actually say we all need to collaborate so we'd be collaborating with Luxembourg we'd be collaborating with London Green Finance Initiative and and it's because of that you know the opportunity is huge and we all need to be at least facing in the same direction at least from an artist's perspective because we have loads to offer and we just need to get the word out there that's it on finance green Ireland I'm just going to give you a little word on sustainability in Ireland am I at a time yes oh no please go ahead no and this is sustainability in Ireland and we are it's just we're really interesting so it was established mid 2015 so we kind of are a startup not for profit nearly still but we have really interesting things going on with two pillars sustainable business and sustainable finance and but really who we are everything I'm some sometimes people say why how are you doing that so finance green Ireland is promoting Ireland internationally so why do you have an accelerator program for climate-aligned startups because that's totally different companies and totally different you know sectors and what's all that about everything that we do is linked by the fact that we recognize there is a risk with the transition to a low carbon economy we absolutely recognize that loads people are talking about the risks there is also an opportunity and there is a business opportunity and an economic opportunity for Ireland's companies and for Ireland and we want to highlight the opportunities and so everything that we do is linked by that we any of our initiatives around the fact that we see a job an opportunity for jobs and for economic growth for Ireland and we want to do something to raise awareness of that and get everyone on the same page and at least we're all trying to do something in that in that area and so our network is interesting we are supported by the private sector and the public sector and we have a role under government's IFS 2020 strategy in relation to our sustainable finance activities and we also have supported government under the national mitigation plan we have a role under that in relation to the year of sustainable business and kind of raising awareness with that sustainability through that and and then we part of sector members some of them just do support us because of the business opportunities some support us because they think they'll get more deals low through the network that we bring together because we bring together very cross-sectoral networks and but some of us some of them just actually think okay this is great for Ireland let's just support this this you know there could be more jobs in this for example somewhere along the line and so yeah we have a really interesting network what do we do so we had a couple of our schools in the Irish Independent there reasonably enough about green finance and I got a couple of calls afterwards saying I'm looking for finance can you give me some of your green finance so we don't provide money neither do we do consulting we don't do consulting advice what we do is we connect we support and we promote so we're really about the network around around raising awareness raising skills making connections and so that kind of gives me an idea of us who we connect who we support and how we promote them and I won't talk any more about sustainable finance so I have two initiatives finance green Ireland and SIF Ireland and SIF Ireland is about promoting responsible investment generally in Ireland and under sustainable business we have a number of different initiatives and most of them are around climate-aligned innovation so around encouraging Irish entrepreneurs with climate-aligned ideas and solutions and products and encouraging them and supporting them in going global with it if the idea is good obviously but encouraging them through so everyone kind of knows start-up accelerator is for fintech and all that kind of thing this is just a sectoral focus so it's start-up accelerator for and climate-aligned activity and I might just give you a finish I'll give you just an example of what it is it's really interesting so we kind of support some companies at various different stages with various different programs whether they're at the idea stage whether they're scaling or growth or whether they're mature and we're really supporting activities there by climate kick which is the EU's knowledge innovation community for climate and they get a rise in 2020 funding and we run a few programs for them where they're Irish hope and the right to finish I'm giving you some examples of climate-aligned innovation that are very interesting so hexafly they have a big warehouse in Ashburn and they're breeding soldier flies black soldier flies which sounds lovely sounds like a horror story but they the challenge the global challenge they're solving is there's a global shortage of fish food for farmed fish and the soldier fly is is fish food basically but it's more interesting than that because they actually as part of their process they they get fish food but they actually release three other products that they can then sell one of them an oil one of them a protein one of them a titan so they're just really interesting it's a real example of a circular a circular economy solution not one bit is wasted basically and they're solving a global problem and the innovation is coming from Ireland in the headquarter here and memory is another really interesting one so waste tires globally are a huge problem and they have come up with a process that breaks down waste tires into four different components one of which is hugely valuable carbon black which generally goes into anything computer-y and black that you see around place and it's hugely valuable and but again a circular economy example really interesting Irish head quartered regional they're based and or they base their in kill nope they're not first and so you know another really interesting example and that's an example of the type of company that comes through our accelerator program and that we support through that