Managing Director, HSBC Securities
Why did you sign up for the FSA Credential?
I have a strong interest in the sustainability and stakeholder subject, after having lived in Europe/UK for many years, where SASB’s ethos are more commonly known. The use of SASB disclosure information is of special interest as I am a practicing investment banker whose clients are regulated financial institutions, banks, insurers and asset managers. The FSA Credential is of interest as a means to learn more about the sustainability discipline and how it is linked to financial analysis.
SASB is the leader and second to none for setting the standard for disclosure of material sustainable information. Having the SASB FSA Credential conveys the level of credibility and reputability to have meaningful conversations with my sophisticated financial institution client base. The FSA Credential provides me with the professional credibility to have conversations with others that are not aware of all the useful SASB industry level content.
What have you liked best about what you’ve learned? Something you didn’t expect?
The fact that SASB sustainability is about risks and opportunities and not about labeling companies as sustainable or not. The subject matter of SASB disclosure standards is fluid and dynamic as the topics are subject to change overtime. The fact that topics are often relevant to many industries enables portfolio managers to manage the sustainability risks and opportunities within an otherwise diverse portfolio.
How have you benefited from the FSA exam?
I am now able to identify and discuss sustainable topics in my day to day client coverage and link the topics to quantifiable enterprise value. This sense of awareness I have gained has made me a more complete or well rounded banker. Bankers always talk about there being financial risks/opportunities and to diversify the various asset classes of financial risks. However, SASB topic risks and opportunities cross all asset classes. These too must be acknowledged and addressed to drive the sought after active management returns.
Was there anything different about the FSA Credential compared to other exams?
I hold a number of professional licences including a CPA, Series 7,24,79. All of these multiple choice exams are very much geared to sample questions. These exams are to enable broad based employment in accounting and finance industries and as such attract a very wide range of exam test takers with varying backgrounds. On the other hand SASB’s Credential is voluntary. It is for professionals interested in the subject across all industries. Test takers such as myself are presumably attracted to this new structured way to think about sustainability.
The first objective is to learn the subject not to learn how to pass the exam. I was grateful that there were not too many multiple choice practice questions but enough to have an idea of the nature and format of the test. This approach necessarily required test takers to have a focus on content and substance over form. The SASB study guide is very well thought out and informative and provides me with a useful reference document.
Can you give an example where material from the FSA Credential was relevant to a situation you faced in your work?
Was pleased to learn about the commercial bank industry standard. This is because my client base includes regulated banks. More specifically I have a detailed focus on bank regulatory capital. The Basel Committee on Bank Supervision recently proposed and will soon finalize a new standard for operational risk. The determination of the amount of risk capital needed to cover operational risk is to be a function of past fines and violations.
The fact that SASB commercial banking industry standard addresses this material risk will enable stakeholders to assess the risk on a complete and comparable basis. This would not otherwise be possible even with required Pillar 3 disclosures. As a result, the equity valuation of regulated banks can be more precisely determined, as it is based on the amount of sustainable dividends and share buybacks which are heavily influenced by fluctuating capital requirements.
Interested in learning how sustainability factors impact corporate value? The Fundamentals of Sustainability Accounting (FSA) Credential is the only credential that teaches you how sustainability information can be financially material, and what you can do with that information.