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Navigating Opinions and Facts: From the First to Fifth Opinions

In sustainable finance, we're collectively navigating a path that's both new and full of potential. It's a journey during which learning from missteps is as important as celebrating successes. It's a process, and like any process, it involves trial, error, and constant adaptation. Every individual, company, and sovereign brings their perspective to the table, contributing to a vibrant market dialogue on what is sustainable, the best way forward to a sustainable future, and what role finance plays.

In sustainable finance, "opinions" frequently surface, particularly as second opinions on frameworks for green, social, and sustainability-linked financial instruments, and most often about debt instruments. Should we consider these opinions to be facts or merely professional insights? Who else is qualified to judge the sustainability of an operation, project, asset, or financial instrument?

The five opinions: Is any of them superior to the others in determining what is sustainable?

Companies, municipalities, sovereigns, and other organisations seek capital to finance their operations, assets, or projects. In this article, we will follow the example of issuers of sustainable debt. This is usually done by developing a framework explaining what the capital will be used for and why it should be considered sustainable. This is referred to as the first opinion, i.e. the issuer’s view.

To assure potential investors or lenders that the first opinion is robust, the owner usually seeks an external assessment of its framework. This assessment comes from the aforementioned second-party opinion providers, making it the second opinion.

Two individuals sit at a table, engaging in a conversation about sustainable finance with hands resting beside their coffee mugs, symbolising a calm exchange of opinions.
Perspectives and Opinions: A Dialogue over Coffee

Investors and lenders who buy sustainable debt assess the debt issuer’s credibility, track record, and transparency, and scrutinise the risk-return profile and sustainability alignment of debt instruments. They also focus on the effectiveness of funded projects by monitoring how proceeds are utilised and the impact generated. Investors or lenders form their own opinions, usually supported by their internal processes, risk appetite, and the individuals involved. This is the third opinion.

When the funds from sustainable debt issuances are allocated to the intended operations, assets, or projects, issuers or investors may obtain independent verification or assurance to ensure that the initial intentions that were confirmed or reviewed in a second opinion, are realised. Although the purpose of this verification or assurance process is to evaluate the outcomes objectively, it involves professional judgment, interpretation, and subjective assessments. For this discussion, we'll refer to these evaluative insights as the fourth opinion.

Anyone directly or indirectly connected to the financing can form their unique opinion. These can be individuals, employees, NGOs, supervisory authorities, or others. From this vantage point, they may evaluate the sustainability and merit of the transaction, weighing its strengths and weaknesses based on their understanding and criteria. This individual assessment, distinct from the more involved parties, is the fifth opinion and reflects the diverse range of viewpoints that exist outside the transaction's immediate circle.

The ever-evolving nature of sustainability: Facts vs opinions

A fact is a statement verified to be true by evidence or observation. It is objective and concrete and should not be swayed by personal beliefs or interpretations. An opinion is a subjective judgment or belief about a subject. It reflects one's thoughts or feelings and is not always based on facts or knowledge. Thus, opinions will vary between individuals because they are partly subjective and are shaped by personal experiences, values, and perspectives.

Sustainability is a complex concept involving the interrelationship of individuals, society, and the surrounding environment. It is also dynamic because our understanding of negative and positive impacts and what is considered ‘sustainable’ is developing. It is difficult, therefore, perhaps even impossible, to state that any of the above opinions are a final judgement - a ‘fact’. Each comes from a party with its interests and worldview that is reflected in their opinions.

Only time will show which opinions are helpful and will prevail. Good and bad opinions will eventually be revealed, as will the trust in those providing those opinions. The best advice is to take note of the opinions coming from those with the most to lose over time, their reputation, or capital - skin in the game.


Takeaway questions

  1. Is this list of opinion categories complete, or are there more?

  2. How do we distinguish between facts and opinions, and how do these distinctions impact decision-making? 

  3. In a landscape in which trust is critical, whose opinions should readers prioritise when navigating sustainable finance, and why?

  4. How might second opinions be affected by increased oversight, regulations, and standardisation?


At Accrona, we offer actionable insights from a wealth of experience. We are your trusted partner for all your sustainable finance needs, from strategy to issuances and equity raising to intelligence and capacity building. (add a sentence on the current article). We turn insights and challenges into success stories. We've navigated the uncharted territories of sustainable finance and want to partner with you to help form your opinions. The experience and skill sets we bring have been honed by our involvement in more than 150 opinions. We can help you form your opinions in all and any of the five opinion categories. Contact us today to explore how our tailored services can drive tangible and positive change for your organisation and contribute to building a sustainable future.



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