Christophe Lalandre, an executive vice president of one of the oldest Swiss private banks, Lombard Odier, is finding a growing interest among Arabian Gulf investors in sustainable finance. Mr Lalandre, 53, oversees the bank's operations in the UAE and Oman from Geneva.
What do you mean by sustainable finance?
It is a way to invest taking into consideration environmental and social issues in favour of the final investors, that is, the individuals or institutions who are investing. This particular sector overall is worth US$9.5 billion (Dh34.8bn) a year globally. The figure is roughly $1bn from the Arabian Gulf, according to our estimates. This form of investment has the best visibility in Europe, especially the UK, where companies are reporting more details about their employment and environmental impacts.
How active is Lombard Odier, which was founded in 1796, in sustainable finance?
We have been doing it since the 1980s. We started with investing indirectly in the form of bonds and shares in companies doing sustainable business and since 1998, we started investing through investment funds in such companies.
What are your sustainable finance criteria?
Around 95 per cent of the companies where we invest are listed. These have to meet our checklist, which is reviewed every six months, based on the reports filed by the companies such as on their social impacts and environmental actions, such as the Gulf of Mexico event in case of BP, or strikes at companies. This restricts our choice but we balance it by the quality of investments. We take the risk of not taking the profit [in companies that do not meet the criteria] because we feel these are short-term profits. And we do not hesitate to pull back our investments.
Would that mean you do not consider investing in mining and oil and gas companies?
Mining and oil sectors are not excluded, we only make sure we select the most appropriate companies in a sustainable form of doing business within these sectors. Excluded sectors are tobacco, arms and defence.
How many of your clients in the UAE and Oman actually ask to invest in companies that do sustainable business?
Around 10 per cent ask for sustainable investment, but it is not bad. The figure was around 1 per cent almost 10 years ago.
Which sectors do you invest in when it comes to sustainable finance?
The main sectors are food, retail and consumer goods. One of the themes we find very attractive is "emerging consumer". It is driven by the growth of population in emerging countries as well as the changes of consuming habits in these countries. We select local companies and international companies with exposure in emerging markets.
Does religion play a role in sustainable business and investment in the region?
Religion is playing a role in the consumption habits. A halal food chain in Saudi Arabia is listed on the Saudi stock market, and we invest in this company.
