Keep your feet on the ground while using finance strategically to save the planet

The 2021 edition of the EMF - Executive Master in Finance C-Suite Forum, led by Program Director Alessia Bezzecchi and Academic Director Andrea Beltratti, featured a rich debate with the participants and faculty of the Master and the C-Suites of companies and financial institutions participating in the Forum. The latter have underlined the difficulties due to the global transition of the development model. This couldn’t perhaps be any different, given the complexity of the challenge of changing an economic model dating back to the steam engine, until now used to increase the quantity of goods and services and the scale of activity but at the cost of unprecedented impoverishment of environmental resources in the history of the planet, with implications we cannot thoroughly handle even when it comes to social interactions. It is not by chance that Andrea Cabrini, Class CNBC’s Director and moderator of the Forum together with the directors of the program, repeatedly said: “Thank you for bringing us back down to earth.”

EMF C-Suite Forum: The innovative C-Suite formula enabled a “guided discussion” divided into panels related to the Master’s specialization tracks: Asset/Wealth Management, Banking, Corporate Finance & Control, and Real Estate. The participants in the Master interacted with fifteen companies that are open to adopting organizational solutions and strategic finance overcome the global challenges. Rossella Cappetta, EMF Faculty of Organization & Personnel and Associate Dean of SDA Bocconi’s Open Programs Division and Claudio Scardovi, EMF Faculty of Strategic Finance Lab and CEO of Hope, guided the participants in this exchange. The project works were presented in the first hour of discussion, immediately after the intervention of the Rector of Bocconi University Gianmario Verona, Professor at the Department of Management, where he clarified the centuries-old evolution of the development model and the challenges on the table, highlighting the essential role of innovation in achieving sustainability. Concepts taken up and reaffirmed in the final remarks by Enzo Baglieri, Associate Dean of the Master Division.

The challenges: Which are the main challenges that emerged during the discussion between the Chief Executives (Almawave, Banca Generali, Banco BPM, BNL Gruppo BNP Paribas, Citylife, Covivio, Dallara Group, Gruppo BPER, Gruppo Credem Weath Management, De Longhi, Hines, Fincantieri, Eurizon Capital, Kiko, Intesa Sanpaolo Private banking, Pelios, Sensible Capital, SNAM, TIM, Unicredit Private Banking), the faculty and the participants in the Master? Based on a conceptual distinction introduced in the Strategic Finance Lab and drawing on the fundamentals of research on financial intermediaries, we can distinguish between businesses that channel household savings (asset managers, banks and wealth managers) and companies that use these savings (corporate and financial institutions, the latter being both providers and borrowers of capital). Financial institutions discussed topics such as the amount of resources required, the criteria used to allocate savings, and the needs of customers. Corporations underlined the role of flows and stocks, the not always easy relationship with those who provide capital to businesses, and the need to close accounts in the name of financial sustainability. All in a context of great motivation and enthusiasm for the new challenge, which can only be overcome if we, as a corporate and financial community, are able to turn it into an opportunity.

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The three major challenges: education, cost of capital, rating. The analyses and discussion by EMF participants highlighted three main challenges. Educating and persuading investors to assess opportunities and companies in a different way, not only when they perform ESG-compliant activities but also when they measure the impact of such activities, by using indicators that not only check profitability but also social and environmental dimensions. In short, we need to influence the cost of capital by integrating sustainability dimensions into the risk-to-profitability ratio in order to use the strategic lever of finance better. In the markets, it is easy to see the implications of social passports on corporate capitalization, but it is hard to measure their impact on the cost of equity, and it is the banks that need to lead the way by broadening their risk-assessment metrics in granting loans and establishing their cost. The best course of action is to measure and then establish the directions you want to follow. The participants in the Executive Master in Finance got the message loud and clear: 1) integrate sustainability elements into business activities and projects (Governance, value chain, investment process); 2) assess sustainability in the light of ESG criteria; 3) educate stakeholders through metrics still to be developed and harmonized – these are the true challenges corporate and financial institutions need to tackle to save the world.

We thank the protagonists of the 2021 EMF C-Suite Forum: Gianmario Verona, Dean Bocconi University, Mario Abbadessa, CEO HINES Italy, Enzo Baglieri, Associate Dean Master Division SDA Bocconi, Gian Marco Beltrami, Marketing & Communication VP Dallara Group, Andrea Beltratti, EMF Academic Director SDA Bocconi, Alessia Bezzecchi, EMF Program Director SDA Bocconi, Armando Borghi, EMF Faculty & CEO CityLife - Generali Group, Andrea Cabrini, Director of Class CNBC, Rossella Cappetta, EMF Faculty Organization & Personnel and Associate Dean Open Programs SDA Bocconi, Cristina Catania, Senior Partner McKinsey & Company, Tommaso Corcos, CEO Banca Fideuram & President Assogestioni, Fabio Gallia, MD Fincantieri, Massimo Garavaglia, CEO De Longhi, Anna Gervasoni, Director General AIFI (Associazione Italiana Private Equity, Venture Capital and Private Debt), Loredana La Pace, MD & Country Manager Italy Goldman Sachs Asset Management, Paolo Magnani, Central Director and Coordinator Wealth Management Area Gruppo CREDEM, Luca Manzoni, Head of Corporate Banco BPM Group, Andrea Mignanelli, CEO CERVED, Renato Miraglia, Head of Private Banking Gruppo UniCredit, Andrea Munari, BNL President BNP Paribas Group, Saverio Perissinotto, CEO Eurizon Capital, Barbara Pivetta, CFO COVIVIO Italy, Giovanni Ronca, CFO TIM, Stefano Rossetti, Stand-in Deputy MD BPER Group, Silvia Maria Rovere, President Assoimmobiliare & CEO Sensible Capital, Valeria Sandei, CEO Almawave, Claudio Scardovi, EMF faculty Strategic Finance Lab & CEO Hope, Riccardo Serrini, CEO Prelios.

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