Submitted by E.M. Williams on Fri, 14/11/2014 - 17:55
November 2012 – The first results of the BEI's innovative bank–corporate partnerships for sustainability were shared at the inaugural BEI Forum in London. More than 120 people attended, including the senior leadership of BEI banks and representatives of other banks from as far afield as China and the US.
They were joined by the leaders of Consumer Goods Forum (CGF) companies and energy firms that are working with the BEI, such as Tom Albanese of Rio Tinto and Paul Polman of Unilever, as well as thought leaders such as WWF’s Jason Clay. Browse the tabs on this BEI page to find video excerpts from the Forum.
BEI Forum official report
(downloadable pdf).
Unlocking investment in clean energy
One output launched at the Forum was a paper published by the BEI with six global energy companies. An Options Approach to Unlocking Investment in Clean Energy argues that using traditional investment valuation models is not always the best approach for valuing clean energy investments. The paper concludes that when uncertain future market or policy conditions would have unequal impacts on investment performance, valuation models that explicitly value the fact that clean energy investments give energy companies the option to adapt to changing market or policy conditions may be more appropriate.
"This report makes a valuable and timely contribution to understanding the complex investment decisions faced by energy companies, and should be considered by company boards, investors, credit rating agencies and policymakers alike. We believe the real options approach warrants a more prominent role in valuation analysis, and is particularly useful when extended from single assets to diversified portfolios."
Alan Brown, Managing Director, Co-Head Global Natural Resources Group at Deutsche Bank
The BEI will now be working with energy companies and other key influencers in the capital markets to ensure that this approach is widely understood and embedded into investment decision-making.
Aligning with consumer goods companies on soft commodities
At the Forum, delegates heard from Unilever and Procter & Gamble as to why the membership of the Consumer Goods Forum is so focused on using its combined procurement power of over $3 trillion to transform soft commodity value chains that currently contribute the most to deforestation.
Experts representing a range of perspectives from across BEI banks, including Global Head of Structured Trade and Commodity Finance, Head of Trade Finance for Asia and Managing Director and Group Sustainability Officer, then explained why they have been collaborating with CGF companies through the BEI to establish how the banking industry can align itself with this powerful market trend.
BEI Forum participants gave strong endorsement for the BEI progressing both of these areas of focus, while adding a further area of enquiry into how the provision of trade finance specifically can be aligned with the BEI–Consumer Goods Forum collaboration, deepening the participation of banks in emerging markets and ensuring policymakers are well informed about the BEI’s activities.
