The ‘buzz’ around COP28 in the Middle East is providing wealth managers a ‘good opportunity’ to have discussions around ESG and sustainability with UHNW clients, Sebastian Goeres, the CEO of LGT in the Middle East, has told Spear’s.
At the 2023 United Nations Climate Change Conference summit, which began yesterday, there has been ‘positive momentum’ in the city around sustainable finance, which is set to ‘spill over to investors in the region’, according to Goeres.
With delegates at the UAE conference already pledging over $400 million to start a ‘Loss and Damage Fund’ to help developing countries to tackle the effects of climate change, the enthusiasm around decarbonisation and the ESG agenda is likely to rub off on local UHNWs and investors.
‘With COP28 happening, I’m seeing quite a few invites… to discuss finance and impact investing, so there’s quite a bit of a buzz happening,’ he said.
While sustainability goes ‘hand in hand with the proper governance as a company’ for clients in the region, Goeres tells Spear’s that hosting COP28 has provided a ‘unique opportunity’ as a springboard for greater discussion around sustainable investing with his clients.
‘I think overall, clients may be a little bit behind compared with European and North American clients, when it comes to ESG and sustainable investing. Nonetheless, they do consider proper governance, and [including] climate change and some of the global macro trends that are happening into their decision making,’ Goeres said.
He added: ‘I think it’s a unique opportunity for us here in the UAE to be hosting COP28. LGT had a get together with UHNW individuals discussing global macro trends, as well as the opportunities that climate change brings,’ he said. ‘It is not just about what the problems are – there are amazing investment opportunities coming up where companies are working on climate solutions.’
‘Good opportunity’ to energise UAE’s next-gen around ESG issues
Goeres, who has served as CEO of LGT in the region for two years and has been based in Dubai for six, says the excitement around COP28 is palpable.
‘Sheikh Zayed Road, one of the main highways, is closed for three days for around four or five hours. Everyone knows something is happening, you feel it on the streets,’ he said. ‘You see the VIPs, the high-profile politicians coming in. So COP28 is a good opportunity to take the topic of ESG up with clients.’
He adds that he thinks LGT is particularly well-placed to support younger generations, which he describes as ‘highly-educated’ around issues on sustainability and climate change, as some express a preference to align their wealth with a purpose around impact investing and ESG.
‘We’re the largest global private bank that is owned by a family, meaning we’re a true family business,’ he said.
LGT’s 900-year history, spanning 26 generations, has given the bank a long-term perspective on sustainability. ‘You can only think long term and in a generational way if you operate in a sustainable manner,’ he said.
Meanwhile, managing around CHF300 billion of assets globally has allowed LGT to help the ‘companies that we invest in to shift towards a more sustainable way of operating,’ he added.
Lightrock, LGT’s impact investing initiative, which was created last year as a separate company, allows clients to ‘co-invest’ in funds alongside the Princely House of Liechtenstein, which owns the bank.
‘We’ve opened it up to our clients to co-invest alongside our owner family. So we have true skin in the game. It’s also employees, for example myself — I am invested in some of these impact investing funds as well,’ he said.
‘Success’ to be found in COP28 if climate commitments are ‘reaffirmed’
As well as energising his client base, Goeres says he is optimistic given the early signs of success from COP’s first 24 hours, with Germany and the UAE leading the way in pledging $100 million to the newly-announced Loss and Damage Fund. As a deal was reached on the fund yesterday, delegates at the conference reacted with a standing ovation.
‘The UAE, along with other countries, has pledged significant money towards the Loss and Damage Fund. If some of these key messages go out, that is clearly my hope,’ he said.
‘And I think if this positivity and these positive surprises that we didn’t expect go out, it will create further positive momentum here in the region and beyond.’
But he said success was contingent on earlier commitments to limiting temperature rises being reiterated by delegates at the conference.
‘I think it will be a success if, during COP28, some of the key goals that have been set in Paris, such as limiting global warming to a 1.5 degrees rise by 2030 compared to pre-industrial levels, would be reaffirmed.’