Deia Markova oversees commodities trade finance at Société Générale in Switzerland – and is also a specialist for sustainability. She tells finews.com how finance can reconcile the two.
Deia Markova, you made a career in metals trade commodities financing. You're also responsible for Société Générale in Switzerland's sustainability efforts. Isn't that a contradiction?
Sustainability is trendy now but Société Générale has been a pioneer in the field. We started 20 years ago, and we have built over the years a strong expertise ever since, throughout the relevant value chains. I can confidently say that today within our group each colleague, each business is challenged on a daily basis to find ways to play a role in the energy transition and to actively contribute helping our clients achieve their ESG goals.
«Big data to map greenhouse gas emissions»
Energy transition is a complex topic that touches every aspect, every industry, every sector and every country. And accordingly – solutions are complex and require a lot of creativity and pragmatism. Working for two years on impact-based finance and new business model allows me today to co-construct, with our clients and partners, efficient solutions to accompany their energy transition.
How does that work in practice?
For example, we work together with Carbon Chain and several clients, using big data and machine learning technologies to measure the greenhouse gas emissions of selected trade flows thanks to a mapping of the full supply chain. This mapping gives, both our clients and ourselves, a better understanding and transparency of where their business stands today in terms of carbon footprint at each step of a transaction – in the warehouse, at the port, on the ship.
«Wind and solar require large base and niche metals»
It also creates the necessary auditability level and the ability to compare to benchmarks. We started this project as we lacked the data we needed to analyze our trade loan portfolio’s emissions, and understand the actual carbon footprint of complex individual supply chains we finance around the world.
Your previous clients included metals and mining groups. Can this industry suddenly turn green?
Metals and minerals are key for a clean energy transition and low carbon technologies. Wind, solar, and energy storage batteries are commonly recognized as key elements in delivering future energy needs at low- to zero-greenhouse gas emission levels. Each of these technologies are mineral intensive, requiring large amount of base and niche metals.
What's the result of this?
We are witnessing a historical shift from a fuel-intensive to a material-intensive energy system. A typical electric car requires six times the mineral inputs of a conventional car and an onshore wind plant requires nine times more mineral resources than a gas-fired plant.
Problematic from all perspectives?
Société Générale accompanies producers ensuring sustainable and reliable extraction of minerals required for low carbon technologies. We also support producers in implementing measures aimed at a reduction of their carbon footprint and contribution to the circular economy. Our role is to help accelerate the decarbonization efforts of our clients.
How does that tie in with your Russian trading partners?
Recent examples in the Russia and CIS region include the structuring of the first green loan in the gold mining sector globally, one of the first green loans in mining and the first one in the region. We have also arranged the first sustainability-linked credit facility for one of the largest low-carbon aluminum producers in the world.
«Steel producers can adapt in view of climate change»
We are very involved in setting industry standards for decarbonization. By co-leading the Steel Climate-Aligned Finance Working Group, our ambition is to help define a pathway consistent with the development of low-carbon industrial solutions in the steel sector. Société Générale is supporting steel producers implementing breakthrough hydrogen technologies to produce low-carbon steel demonstrating the climate adaptation potential of this industry.
What specifically can Société Générale Swiss branch do to tackle climate change? How do you make an impact?
Indeed Societe Generale aims at driving sustainable change in finance and the Swiss entity is no exception to that ambition. We have developed a full range of innovative sustainable finance solutions, dedicated to our clients, both corporate and financial institutions. This comprises funding tools, investment solutions and advisory capabilities.
«Switzerland brings diverse finance, NGO, academic actors to the debate»
Just to give an example, ESG-linked funding tools are already in place with all our corporate clients in Switzerland or will be implemented as soon as older existing instruments mature in the coming years. We have also built a unique advisory capability with regards to the structuring of ESG-linked bonds and vis-à-vis external ESG rating agencies.
You were at the recent Building Bridges in Geneva. Is Swiss finance doing enough for sustainability?
Yes, I had the honour of sharing my views on «Financial sector’s leveraging power towards a just transition» in a panel hosted by ILO in partnership with UNEP FI. Building Bridges is a unique conference, with a very wide participation and exceptionally rich content. What makes it unique is that it brings diverse actors from the finance industry, the United Nations, international organizations, NGOs, academia, and local, cantonal and national authorities and makes us discuss and collaborate towards addressing the Sustainable Development Goals.
The impact is a key question – in that talking alone doesn't solve climate change.
Let me focus on impact investing for a second where Switzerland plays a prominent role. According to the Swiss Sustainable Investment Market Study 2021, sustainable investments have again considerably grown by 31 percent in Switzerland compared to the previous year.
«One in three Swiss francs factors in sustainability»
The total volume of investments taking ESG factors into account with at least one of the covered approaches consequently reached 1.52 billion Swiss francs by end of 2020, which roughly means one of every three francs in assets managed in Switzerland takes some sort of sustainability factor into account. In my view, this is quite an impressive result and improving every year.
Where do you see a need to catch up?
Societe Generale is an active member of the Swiss Sustainable Finance, or SSF. The roadmap launched by SSF during «Building Bridges» sets out concrete measures to be taken by Swiss financial market players to accelerate the achievement of global climate goals and the UN Sustainable Development Goals.
«Nationalities and background count as much as gender in diversity»
It is an ambitious roadmap with concrete actions for all the players of the Swiss financial services industry. As Switzerland has already achieved a lot in the sustainable finance area, the aim of this Roadmap is to manage the next steps and introduce effective measures on a wider scale.
Société Générale's management in Switzerland is already composed of half women. How does it manifest in decision-making?
Indeed, our executive board is quite unique. Besides the fact that we have half women, we have also a good diversity of nationalities and backgrounds. It allows us to discuss subjects from different perspectives. Our decisions are the image of that diversity – they are balanced and adapted to the multicultural reality of our Branch.
Who sets the tone – women or men?
We always seek to build on the diversity of points of view and find the best compromise allowing the business to develop, while keeping our staff passionate about their work.
What advice would you give to young female bankers on their career path?
Be bold and believe in yourself. What really makes a difference in business is courage - a calculated risk taking. People who become good leaders have a greater than average willingness to make bold moves, but they strengthen their chances of success through careful deliberation and preparation.
«Bring disruptive thinking to the table»
And often that goes with bringing disruptive thinking and innovation to the table. Let me give you an example. Taking on the execution of a landmark large deal for your client often requires a bold negotiation, the implementation of an innovative solution and a lot of convincing power. But those are the transactions that make you be visible and recognized in an organization. And it is essential to move up the ladder.
Deia Markova is head of trade commodity finance department at Société Générale – an area of traditional strength for the French lender. She began her career in corporate banking for the Paris-based bank before later specializing in structured trade soluttions for metal and mining producers in Russia and CIS states. From 2014 to 2017, Markova led the corporate loan business at Sberbank in Switzerland, with an emphasis on commodities producers and traders.
