SFS Equity: What are we doing in Sustainability? Interview with Stephanie Tack

Siemens Financial Services invests in sustainable businesses and seeks to advance sustainability via all our investments. To ensure we continuously develop, strengthen and deliver on the key elements of Siemens’ sustainability approach, SFS recently named a new Head of Sustainability for its Equity business, Stephanie Tack. Along with her new global team, she will help to shape the way towards a net-zero future.

I spoke with Stephanie about her new role and the opportunities it presents for SFS.

What are you most looking forward to in your new role?

Stephanie Tack: SFS Equity (EQ) is a super interesting business. I enjoy learning every day about the new investment opportunities we are exploring as a team and look forward to working on the transactions. I find the team curious and passionate about their work. I enjoy working with people who are proud of their work and opiniated. I look forward to discussing sustainability topics (knowing that there is room for different views). As I have lived abroad for some time of my life, I am also looking forward to work with a global and diverse team.

What opportunities are there from an investment perspective in terms of sustainability?

ST: We are in the beginning of the “sustainability revolution”. There will be more reporting standards and regulations coming in the next years. There is hard and soft law coming. For example, the EU issued a new battery regulation which is yet to be formally approved. This regulation is looking embed stronger sustainability, performance and labeling requirements. EQ is financing the market players, such as Morrow Batteries who are benefiting from these regulations. So that we will have opportunities arising out of these new standards and regulations.

The concept of “materiality” will be an important one: Financial materiality assesses the information on economic value creation at the level of the reporting company for the benefit of investors (shareholders) and impact materiality assesses the information on the reporting company’s impact on the economy, environment and people for the benefit of multiple stakeholders, such as investors, employees, customers, suppliers and local communities.

From an investment standpoint, sustainability has become a business case. We can make a difference by financing companies which shape the future. The world has pressing problems to solve: The IPPC (The Intergovernmental Panel on Climate Change) sixth Assessment Report released on March 20, 2023, showed that there is a financing need of $131 trillion investment required to tackle climate change. The world needs 3-6 times the current climate investment. SFS EQ is already financing companies providing solutions for decarbonization, such as electrified urban and suburban passenger land transport (e.g. Sydney Metro) and people centricity (hospital activities). We are working on solutions reg. resource efficiency (e.g. recycling).

How does the new function help sharpen the way to a sustainable future?

ST: We support SFS and Siemens bottom-up and top-down. Bottom-up via our investments and detailed discussions with our investee companies. We work with them on advancing their sustainability agenda, such as on related KPI and data. And we look to accommodate the realities of the market. Top-down we support SFS in advancing its sustainability strategy. And of course, we support Siemens’ DEGREE framework.

Looking into the future: What are the next steps?

ST: First, I would like to fully understand our investment portfolio. Then, we are looking to further operationalizing sustainability. We want to integrate the topic into the entire lifecycle of our investments. We want to advance sustainability in our investments.

Why should investment professionals join your team?

ST: Join us so we can shape the sustainability journey together!