GEFF2015 – Two worlds converge in Edinburgh

Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia delivers her keynote speech

Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia delivers her keynote speech

Last week Edinburgh was host to panels of distinguished guests who discussed the challenges and progress of the pursuit of more ethical finance. Hosted by the Scottish Government at the prestigious Balmoral Hotel, the Global Ethical Finance Forum 2015 brought together academics and practitioners from around the world to exchange experiences and expertise regarding the implementation of ethical finance.

Organised by Middle East Global Advisors, a consultancy based in Dubai, the event explored a host of themes regarding the possibility of a marriage between ethics and finance, as well as convergence between conventional and Islamic finance. Prominent discussions centred on whether the view that ethics in finance impacts negatively on investor return was true or simply a myth; whether the inevitable decrease in optionality-including the divestment from the tobacco and alcohol industry-made ethical finance less attractive; what the word ‘ethical’ actually means in different areas of the globe; and whether there could be a uniform standard that investors could abide by.

The event began with a statement of intent by the keynote speaker, Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia whose reign has seen Malaysia become the hub of Islamic Finance. Dr Aziz emphasised that “finance must be re-anchored to the real economy” and that “finance should be value adding and value based”. The subsequent panels then went on to discuss a number of themes and included the likes of the CEO of Abu Dhabi Islamic Bank Tirad al-Mahmoudi who revealed that research conducted into ethical finance showed that it is indeed profitable.

The conference consisted of a number of panels composed of practitioners, consultants and academics

The conference consisted of a number of panels composed of practitioners, consultants and academics

With a dynamic format that encouraged debate, discussions were at times reflective of tensions within the finance sector, epitomised in a testy exchange between the former Vice President and Chief Financial Officer of the European Bank for Reconstruction and Development, Manfred Schepers, and Deputy Head of Global Strategy at Aberdeen Asset Management, Richard Dunbar. The  former bluntly stated that investors are averse to responsible and sustainable investment as they are not willing to hear anything that might suggest a cut in returns; a statement the latter vehemently denied. Later, Professor Ibrahim Warde, professor of International Business at The Fletcher School of Law and DiplomacyTufts University, would criticise the finance sector by arguing that there is an “inverse correlation between talking about ethics and practicing ethics”.

Discussions carried on during the networking breaks and luncheons were dominated by debates between optimists and cynics clashing over the viability of ethical finance and whether the drive behind it was merely a smokescreen or a genuine attempt to learn the lessons of the financial crash. It was no wonder therefore that the attendees often needed prompting to continue eating their food or risk missing the next panel.

Dr Sayd Farook interviews Emir Mohammad Sanusi II of Kano,former governor of the Central Bank of Nigeria

Dr Syed Farook interviews Emir Mohammad Sanusi II of Kano,former governor of the Central Bank of Nigeria

Naturally, the best was saved until last as Dr Syed Farook of Global Middle East Advisors announced he would be interviewing his special guest, Former Governor of the Central Bank of Nigeria HRH Emir Muhammad Sanusi II of Kano. The interview saw Dr Farook probe the Emir’s term as Central Bank, governor who was tasked with steering the country through the financial crisis. The Emir, clad in traditional robes, described having to navigate political interests and discovering misappropriation of funds (which eventually led to his dismissal). He also underlined the wider aspects of ethical finance in the preservation and utilisation of resources, pointing to some countries, including Nigeria, importing what they already produce.

The two-day event proved to be a vibrant and energetic forum for tackling the challenges concerning increased ethical, sustainable and responsible investment. The star-studded panellists combined with the curious audience ensured that the Global Ethical Finance Forum provided the perfect platform for the convergence of stakeholders from both conventional and Islamic banking to discuss the growing opportunities for ethical, responsible and sustainable investing.