‘Keeping it Clean’ with Orlaith Delargy, Sustainability Consultant at SustainabilityWorks

Orlaith is currently working for both SustainabilityWorks Ireland and the Irish Forum on Natural Capital. Previous to this she worked as a Program Manager with international environmental non-profit CDP, after completing her degree in Environmental Economics and Policy at Imperial College London, and working on policy and public affairs for the Dublin Chamber of Commerce.

A couple of weeks back, I had the pleasure of listening to a talk on all things sustainability, sustainable finance and climate change by Orlaith at an online ‘women in sustainability’ event. She was inspirational, passionate and driven, and I was immediately moved to get in touch with her, have a chat and share some of her insightful thoughts with you. So here goes….

Who or what inspires you?

I have been fortunate to work with some amazing women throughout my career, and they inspire me. (There have been wonderful male colleagues, too, but most of the teams I’ve been a part of have actually been all female!). These women work with such pace and passion — I am consistently amazed at how they organise themselves and their lives. My friends inspire me, too.

Where did your interest in sustainable finance come from?

My interest in sustainable finance arose firstly from my interest in the idea that even if you are purely profit motivated, it still makes sense to factor climate change and nature into your investment decision making, because these are long-term, systemic risks. And secondly, I am interested because I think it’s the area in which we can catalyse the greatest change. The more I learn about the financial sector, the more I am astounded at its scale and speed. There is no question about it — we need the financial sector on board if we are to be successful in halting climate change and achieving balance with nature.

How might this happen?

Well, we need a shift in the investment horizon, taking the focus from short-term profits to long-term value. Shares in companies are often held for as little as 20 seconds, and financial technology has enabled high-frequency trading. Many investors are narrowly focused on the quarterly earnings of companies.

But if the investor took a more long-term focus, and a broader view of the role of business in society, they might find that businesses can create value even in the midst of this crisis. If an investor holds a stock over a period of a few years, the management of the company has time to show its adaptability and take careful, ethical decisions to ensure its future — rather than, say, slashing employee wages or benefits to ensure dividends can still be paid out.

It is lovely to think that the financial sector — investors, banks, insurance companies — would reward such a company, but that’s not the way the system is currently set up.

In your talk you discussed the fall in oil prices and what the outcomes of that could be, can you share your thoughts on this?

The fall in oil prices has shown up the contradiction of investing in the fossil fuel sector. What we have seen over the course of the pandemic is that as oil prices have gone negative, some major banks in the US are taking over as operators of oil and gas fields themselves to avoid losses on loans that they made to energy companies. The Bank of England plans to buy debt from oil companies as part of its coronavirus stimulus programme. The Federal Reserve in the US is planning the same measures.

In other words, the financial sector is keeping the oil industry on life support when they should be managing its decline. Even outside of the losses to the fossil fuel industry caused by the pandemic, in a normal year, we provide the industry with $5 trillion dollars in subsidies. This cannot continue if we are to limit global warming to 1.5 degrees C or below.

This crisis has really amplified just how connected our global economy is, how does this compare in the financial sector?

Yes, it certainly has. This connectivity between different countries, supply chains etc. certainly holds true for the financial sector and it’s why we need the entire sector to change in support of a sustainable economy.

Many people have savings of some kind, have taken out insurance or pay into a pension pot. We need to understand how all these small investments add up to the vast sums of money that flow through our economy. For example, when we pay premiums, insurers invest the income from those premiums into equities, bonds and property assets. When we pay into our pension, pension funds do the same. We have a voice in how these institutional investors spend our money. Do we want our money to be spent on building more rigs and roads?

ShareAction runs a great campaign called Pension Power, which tackles some of these issues. And the European Commission is currently consulting on its Sustainable Finance Strategy — any individual can go and respond.

You mentioned that a lot of this comes back to how we measure wealth. Just how fit for purpose are these measures in today’s economy?

The pandemic has led us to redefine the value of many things — community, natural spaces, local businesses and big businesses, too. These are the building blocks of our society and when we talk about economic success, we should include measures of their strength and health.

Before the pandemic, some commentators viewed Ireland as having a thriving economy –we had the fastest growth rate in Europe. But this was meaningless for so many people. We had chronic housing, health and homelessness crises.

A lot of you will have seen that Amsterdam is first city in the world to adopt Kate Raworth’s doughnut economics tool. The tool shows where basic needs are not being met and where planetary boundaries are being overshot. This is a great step forward and begins to address the crux of the matter: we must find better metrics for measuring economic and societal success.

Thanks Orlaith, some great insights!

If you would like to hear more from Orlaith, and I would certainly recommend that you do, then check out her article ‘Climate Change and the Coronoeconomy for ESG Ireland’ https://esg.ie/climate-change-and-the-coroneconomy/

Consultation details: https://ec.europa.eu/info/consultations/finance-2020-sustainable-finance-strategy_en
One of the questions that individuals can answer: Do you know with sufficient confidence if some of your pension, life insurance premium or any other personal savings are invested in sustainable financial assets?

Connect with us to keep the clean discussion going… and if you would like to feature in the series, do get in touch! 🌏