Finance minister, Pierre Gramegna hails 2018 the, "year of all risks" at Alfi/Alrim Risk management Conference on 31 May 2018
Photo: Sébastien Goossen from archives
Climate change was hailed as a risk that needs to be identified, accepted and managed at the Alfi/Alrim Risk Management Conference on 31 May, which was also the occasion where finance minister Pierre Gramegna described 2018 as “the year of all risks.”
Whether you believe in it or not, if you have a client that believes that climate change is a risk, then it is your duty to identify and manage it, said Luc Neuberg, president of Alrim, in his opening remarks at the risk management conference, jointly organised by the association of the Luxembourg investment funds industry (Alfi) and the Luxembourg risk management association (Alrim).
After a quick survey of the room, however, he was happy to note there were no “Trumps” in attendance and that the risk management industry in Luxembourg is taking climate change seriously. “Our job,” he said, “is to be open to every possible type of risk, including climate, even if you don’t personally believe it is a risk.”
In any case, it seems there is no choice as Julie Becker, member of the executive committee of the Luxembourg Stock Exchange, said during a panel discussion on climate, “The sustainable finance game is on and even if there is opposition to discuss climate change in terms of money, risk and regulation, the EU has set down a legislative framework that does just that.”
In a video presentation to the conference from the OECD finance ministers’ meeting in Paris, Pierre Gramegna described 2018 as “the year of all risks,” but tried to remain positive, encouraging participants to see them as an opportunity rather than a threat.
“The EU is a champion of multilateralism and we want to promote this globally, especially when it comes to trade,” he added. For Gramegna, there are several key risk factors at a macro level.
“A trade war between the US, China and the EU, for example,” he said. “If Europe has performed well economically recently, it has been because global trade has been good. However, dialogue is ongoing, so let’s not lose hope”
It came as no surprise when he mentioned Brexit next. “We don’t know what our relationship with the UK will be in the future, especially in financial services as UK companies will lose passporting rights. We support enhanced equivalency rules, but we have to see how negotiations will go.”
Regulation and digitalisation came next on Gramegna’s risk list. “MiFID II, GDPR and other regulation are being seen as heavy burdens, but they are also opportunities. PSD2, of course, has been disruptive for banks, but is also a great opportunity for diversification.” As for digitalisation, he said, “It is changing business models as we know them.”
Last but not least, the finance minister came back to climate change. “For risk managers, climate change is a huge challenge. Luxembourg is taking this very seriously. Not just in reducing our footprint, but also in creating new ventures such as the Climate Finance Accelerator.”
For further informationon:
The Climate Finance Accelerator, please refer to our recent article on the topic.