“Sustainability Has a Business Opportunity Perspective”: How One Bank Is Pushing for a Better Future

By Richard Lord

The well-being of the planet is in the hands of the next generation. Here’s how Credit Suisse is embracing both

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Photo: Affa Chan
Cover  Benjamin Cavalli, head of wealth management Asia Pacific and APAC sustainability leader at Credit Suisse (Photo: Affa Chan)

Gen.T+

Credit Suisse takes sustainability seriously—and not just because it’s the right thing to do. Going green is a business imperative as much as it’s an ethical responsibility, according to Benjamin Cavalli, the bank’s head of wealth management Asia Pacific and APAC sustainability leader.

“As a global financial institution, Credit Suisse recognises the important role that we play in sustainability,” he says. “It is our desire to harness the power of finance to help address pressing social and environmental issues and create a future that is fair, inclusive and sustainable for all.

“We see it very rationally. In our view, sustainability has a responsibility perspective and a risk perspective but also a business opportunity perspective: it is key that we seek ways to transition to more sustainable business models that address the risks but also leverage the potential of this economic and market transformation.”

The bank has committed to achieving net zero across its operations, supply chain and financing activities by 2050, with interim science-based goals for 2030. It will also provide at least CHF300 billion (US$312 billion) in sustainable finance by 2030, underpinned by its Sustainable Investment Framework and Sustainable Activities Framework, which ensure that only appropriate transactions qualify towards that goal.

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The work has already started. Credit Suisse was a joint lead manager for the issuance of South Korea’s first green bonds, which were used to refinance rail projects; while in March 2022, it was the sole bond structurer for the World Bank’s Wildlife Conservation Bond, aka the Rhino Bond, which aims to help grow the black rhinoceros population in South Africa. “This innovative outcome-driven conservation funding model not only benefits the wider ecosystem but produces a blueprint to use capital markets for impactful conservation projects,” says Cavalli.

There are also huge opportunities in impact investing, he adds. “Our global research found that over 80 percent of ESG financial assets are located in developed countries. In contrast, 70 percent of the spending needs related to the UN Sustainable Development Goals and more than 80 percent of the global population are in developing countries, primarily in Asia. This points to a huge opportunity for ESG leaders in the region. Credit Suisse was the first to launch an institutional-grade impact investing private equity fund dedicated to Asia, in 2015.”

The growth in ESG-related investing, he says, is being driven primarily by the younger generation, who view it not as an add-on to their core business activities, but as an integral part of them.

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[The] generational shift taking place is changing the order of managing wealth and putting purpose first
Benjamin Cavalli

“In Asia, we have seen exponential growth in professionally run advisory firms over the last five years to manage the private assets of wealthy families, and the trend is expected to continue. First- and second-generation family members are recognising the need for independent professional advice to ensure that the wealth they have accumulated is transitioned successfully and smoothly to the younger family members, who may well have different priorities and risk appetites—especially when it comes to environmental, social and governance issues.

“A Credit Suisse survey in 2021 showed that nearly half of single family offices expected to boost their sustainable investments over the next two to three years. This generational shift taking place is also changing the order of managing wealth and putting purpose first.

“The new wealth owners in the region are no longer viewing their capital in discrete pools for investments and philanthropy and are instead keen to apply a social impact lens across their assets, including their businesses.”

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That has led to a diversification in the way those families engage with good causes, he adds. While grant-making is often still at the heart of a family’s philanthropic efforts, younger generations are exploring other social impact tools such as venture philanthropy, social impact bonds and impact investing.

“As global citizens who have lived and spent large amounts of time in different parts of the world, this new generation of wealth owners in APAC thinks in wide terms—systemic rather than specific.

“When it comes to philanthropy, besides being flexible in the way they do good, they often look to spark change across a whole ecosystem. For example, besides making donations to improve facilities at an eldercare centre, they may seek ways to improve the healthy lifespan of seniors in general.”

To channel this greater engagement, Credit Suisse has long worked closely with the next generation, and in 2018 created a global department dedicated to them. Its CS Next Generation Academy offers educational programmes, in collaboration with professors from Insead, Stanford University and the University of St Gallen, to support them in their roles as investors and social change makers.

The bank also sponsors the Young Investors Organization, a network bringing together more than 1,600 next-generation members of some of the world’s most influential families to create investment, business and social opportunities.

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