Discover a World of Opportunities

This week the Institute of Directors (IoD) and the Scottish Business Network (SBN) will be hosting Scottish International Week. An amazing forum to learn and interact with some of Scotland’s leading businessmen and women with a track-record of success in new markets such as the Europe, North America, Middle East, and China.

The forum will be held throughout the week, starting today Monday 9th to Friday 13th at the IoD headquarters in Charlotte Square, Edinburgh. All sessions are free to attend but registration is recommended as seating may be limited.

I have the honour of speaking on Thursday afternoon at 3:30 pm, discussing not only my experiences in Canada but also the enormous opportunities for Scottish companies to reach the emerging Islamic markets in the Middle East and Asia.

Coincidentally, Edinburgh hosted the Global Ethical Finance Forum last month which I had an opportunity to attend and explore opportunities for collaboration with businesses and investors from the region.

I’ve shared my article below for your reference and encourage you not to miss a great opportunity at the Scottish International Week to learn from, connect to, and network with Scotland’s global leaders.

Islamic finance takes centre stage in Scotland

This article was first published in Islamic Finance news Volume 14 Issue 39 dated the 27th September 2017.

Over 300 business and finance leaders gathered in Edinburgh to attend the 2nd Global Ethical Finance Forum (GEFF) on the 13th and 14th September at the RBS Conference Center. The theme of the event was ‘Merging profit with purpose’.

Kirsty Britz, the director of sustainability at the Royal Bank of Scotland, opened the forum with a welcoming address that would set the stage for the two-day conference. “We must encourage ethical choices as a norm rather than the exception.” Key speakers at the GEFF this year included Keith Brown, the cabinet secretary for economy, jobs and fair work in the Scottish government; Nurlan Kussainov, CEO of Astana International Financial Center (AIFC) Authority; Jameel Ahmad, the deputy governor of the State Bank of Pakistan, and many more.

During the various panel sessions and keynote speeches, the forum covered the interplay between ethics, faith and finance. There were discussions on impact investing, sustainable development and green bonds, as well as an innovation showcase near the end of the forum which highlighted the latest innovative tools in ethical finance. Discussions on socially responsible and impact investing brought out the challenges facing asset managers with Anthony Hobley, CEO at Carbon Tracker, stressing: “We need to see a paradigm shift whereby ESG [environmental, social and governance] reporting becomes the norm and is just an integral part of any financial decision. For that to happen, it needs to be seen as critical to the management of financial risk and [to] achieve better returns.

This goes to the Holy Grail at Carbon Tracker, how does one translate the environment, climate energy and transition risk into quantitative financial risk and opportunity? To achieve this, ESG needs to be much more forward-looking than backwards-looking. It must be capable of stress-testing business models against foreseeable risks and transitions and capable of flagging the collapse in valuation we have already seen in US coal European energy utilities.”

As an example, green bonds came into prominence in 2007 when they were launched by a few development banks including the World Bank. Ten years later, the tax-exempt bonds continue to be suited to long-term projects. Preliminary estimates for green bond issuance in 2017 by HSBC, Moody’s Investors Service and Climate Bonds Initiative are all in excess of US$100 billion and demonstrate the massive opportunity for the ‘ethical’ bond sector. A green Sukuk facility, a Shariah-compliant version of the green bond, can provide much-needed investment in renewable energy and other environmental projects to finance regional development projects in the Middle East.

Discussing the inherent issues facing the financial services sector, Kussainov addressed the underlying challenges facing the industry. “Within the current business model in the financial services sector, speculation and arbitration are always based on asymmetric information. People from low-income groups who have less access to the information end up suffering more.

With the financial services sector rapidly embracing technology, there is a strong belief that in the near future there will be a reduction in the current communication gap that the sector presently faces. This will bring a very positive impact on to the development of Islamic and ethical finance across the world, helping it to realize its global value proposition.” David Parker, the executive director of Financial Services at the Bahrain Economic Development Board (ECDB) who also attended the forum, was confident the relationship between Islamic and ethical finance will become stronger. “We (ECDB) have been trying to develop [the] Islamic fi nance initiative around innovation and fintech, trying to ensure the industry is fi t for purpose in the 21st century. Islamic finance (will become) an important part of the wider ethical finance agenda.”

The forum closed on an inspiring note with an optimistic outlook by Nigel Kershaw, the chair of the Big Issue, highlighting that the democratization of finance will lead to the wider adoption of ethical finance as an integral part of investing, saying: “There is a lot of talk about ethical finance and in particular ESG and social impact because it’s talked about primarily by people involved in the financial sector. I believe the democratization of capital is extremely central to what we do. Quite often, the discussion is top-down supply and product-led and for me, it often misses one of the most important social outcomes that is quite often forgotten, that is the opportunity for ordinary people to invest and save in creating a better place to live for themselves, their families and the community around them. It’s not about mainstreaming ethical finance; it’s all about bringing the mainstream to us.”

The GEFF plays an instrumental role in connecting thought leaders and stakeholders from the responsible and Islamic finance world to learn, collaborate, and work toward a mutually inclusive desire to develop finance as a force for good.