Sustainability Offers Opportunities For Financial Innovation

Ursula Finsterwald, everyone is talking about sustainability. How is LGT’s approach to this topic different from that of other financial services providers?

Ursula Finsterwald: History, ownership structure and credibility. Unlike many other companies in the financial sector, sustainability isn’t a new topic for LGT. We integrated sustainability into the way we think and act around 20 years ago – back when it wasn’t even on most companies’ radars yet.

The reason we realized the importance of sustainability so early on is our owner, the Princely Family of Liechtenstein, has been highly committed to sustainability for a long time. The Princely Family has been thinking about the impact of its actions on people and the environment for generations.

And that mindset and those values have transferred over to LGT in a very natural way.

We’ve been hearing so much about sustainability over the last several years … some people might think the narrative has become too omnipresent.

That’s understandable. We’re being bombarded with the topic from all directions, and it can be a bit much sometimes. But the fact of the matter is that climate change has far-reaching and very serious effects that we cannot ignore. We want to leave an intact world behind for future generations.

«The environment is something that concerns us all»

We’re aware that there are no perfect solutions (yet) to the far-reaching challenges we’re facing, but there are many approaches and opportunities for combating climate change. And everyone must understand they are part of the solution because every contribution counts and time is running out.

So I don’t think it’s possible to talk about this topic too much.

LGT is a financial services provider and not an environmental organization.

The environment is something that concerns us all. And as a financial services provider, LGT wants to have a positive impact. Our role as a wealth and asset manager gives us the ability to advise investors how capital can be allocated in a targeted manner.

Climate change is one of the megatrends of our time and has a profound effect on almost everything imaginable. And as a financial services provider, it’s our job to identify and understand megatrends and respond to them as appropriate. Also to the benefit of our clients. Because if the world is changing fundamentally, companies can harness that change positively and capitalize on it.

Does LGT work with other financial services providers on sustainability-related matters?

In the fight against climate change, we need to join forces, discuss solutions, and invest jointly. We are therefore an active member of global initiatives such as the UN Global Compact, the UN Principles for Responsible Investment, and the UN Principles for Responsible Banking.

When it comes to sustainability, LGT seems to be focusing mainly the on environmental aspect. Why is that?

Climate change and other environmental issues have a major influence on the societal issues addressed in the UN’s Sustainable Development Goals. We therefore decided to focus on a core set of challenges. For example, at least 40 percent of the global economy depends on biological resources.

«We want to be net zero for our investments by 2030»

That means that by preserving the diversity of life on earth in all its forms, one also has a positive effect on social cohesion and the economy.

What is LGT’s focus in terms of investments?

We want to be net zero for our investments by 2030 and also want to help our clients decarbonize their portfolios. We have a few options for achieving this. One is to reduce emissions from portfolio companies to the greatest extent possible.

For example, by exercising shareholder voting rights and influencing policies and practices, we can encourage companies to further reduce emissions. Or we can increase our exposure to low-emission companies and reduce our exposure to high-emission companies.

«All of these measures play an important role in our climate strategy»

Another option is to invest in net-positive investment solutions, such as investments in renewable infrastructure or commodities, such as forestry, which we are evaluating. All of these options help reduce the carbon footprint of portfolios.

However, in the lead-up to 2030, some residual emissions will remain. For these emissions, we offer the opportunity to acquire emission reduction certificates or carbon removal certificates directly on the carbon market. All of these measures play an important role in our climate strategy.

And what does LGT expect from its employees in terms of making a positive contribution to the environment or society?

LGT encourages its employees to get involved in issues that are close to their hearts, both in their local communities and beyond. It’s great to see how many employees get involved every year. We also have an employee volunteering platform and work with initiatives such as B360 Education Partnerships, which supports university students in Africa.

Ursula Finsterwald has been Group Head of Sustainability Management at LGT Private Banking since 2011. She is Vice Chair of the Board of Trustees of the Swiss Climate Foundation, a member of the Board of the Global Compact Network Switzerland & Liechtenstein and Chair of the Sustainability Committee of the Liechtenstein Bankers Association. Together with other sustainability experts, she founded ESG4Boards in 2023. Prior to joining LGT in 2011, Ursula Finsterwald worked as a project manager and consultant at BHP Brugger, a consulting firm for corporate social responsibility that works with both private and public sector organizations. She began her career as a research assistant at Switzerland’s Federal Office for the Environment (FOEN) after completing a master’s degree in political science at the University of St. Gallen.