Brexit: Fast-visa track for scientists

The UK Prime Minister Boris Johnson said today that he wants the country to become a science superpower.

I want the UK to continue to be a global science superpower, and when we leave the EU we will support science and research and ensure that, far from losing out, the scientific community has a huge opportunity to develop and export our innovation around the world.

He said that this fast-track will help top scientists from science, engineering and technology to enter the country. They are also allowed to bring their families with.

Johnson also mentioned that they will expand the pool of UK research institutions and universities to able to endorse candidates and remove the need to hold an offer of employment before arriving.

 

 

 

 

 

 

 

 

 

 

Business Research and Insights

New York Times – Microplastics also in the air

Microplastics can be found also in the air. According to the New York Times, French researchers have found thousands and thousands of microplastic particles raining down in the Pyreneers. Microplastics, which are source of the water and ocean pollution, may also travel by air.

According to the article 11.400 pieces of microplastic per square meter per month, on average was the research outcome. Researchers, lead by Deonie Allen, called them invisible atmospheric pollutants. According to the study a lot of microplastic pollution comes from cities, landfills and farms that have sprayed with wastewater treatment sludge.

Some countries, including Britain, have banned the use of microplastic or microbeads  for example in cosmetics in order to avoid the pollution inflow to rivers and seas.

The European Chemical Agency, Echa, has proposed EU-wide restrictions by 2020 on using deliberately added microplastics in products like cosmetics, paints, coatings, fertiliser granules and medical devices in order to reduce plastic waste.

According to the estimate  about 70.000 -200.000 tonnes of added microplastics end up in the environment each year.

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Brexit insight: Marine planning vital for low-carbon energy

The UK decision to leave the European Union has caused questions related to the issues on the UK coastal line and the economic development in the area.  According to the UK Goverment, the Brexit deal means that the UK will have its own, independent fishery policy in the future.  This indicates also that UK will no longer be part of the European Marine Spatial Planning process – but will stay in the Unclos, which is an UN convetion on the Law of Seas.

The Unclos is important part of the governance in the seas, while aquaculture origins and other natural resources in the global Seas are governed by this. The goverments have agreed for example of the so called Exclusive Economic Zone (EEZ) -areas, which indicate the ownership of the country in the seas. And under these nautical miles the country has the full owership to the natural resources.

What does this mean in practice? It means that the countries, in which the UK has the EEZ-border (Iceland, Denmark, Germany, Netherlands, Belgium, France and Faroe Islands) must work together more closely in the economic issues if the EU Marine Spatial Planning is not any more in use and if the UK will not be part in the EU Marine Strategy Framework Directive.

UK MSP

This is also important while the UK Marine is importat part of the country´s energy policy and energy mix. But also the UK´s energy supply and distribution. This includes the country´s oil and gas sector ,companies like BP (BP) and  Royal Dutch Shell (RDSA) , but also the growing new energy sector, the renewables. According to the national oil and gas industry, capital investments in the UK offshore oil and gas industry were 5.6 billion pounds in 2017.

This low carbon energy related to mitigating the Climate Change and energy security in general include for example offshore wind, wave and tide energy. According to the UK Marine Policy Statement, it is anticipated that the amount of wave and tidal energy will increase markedly up to and beyond 2020.

The low carbon energy sector is also a major employer in the offshore and in the coastal line.  According to Oxford Economics, it is assumed that each 1MW
of installed capacity adds 0.29 direct and 0.16 indirect jobs.  The employment growth in the coastal towns has been better than average, says the UK Statistical office.

Currently there are 12 offshore wind farms in the UK, with the largest offshore wind farm in the world located off Kent.

In addition to the renewables, the coastal line is imporant economic factor for example to construction, port operations, aquaculture, tourism, water and waste management and telecommunications.

-Aquaculture is the process of farming or culturing aquatic
organisms. The majority of marine aquaculture is currently related to
Atlantic salmon and shellfish.  The majority (99%) of existing UK marine based finfish aquaculture activity is located in Scotland, which is the largest producer of
farmed salmon in the EU, and the second largest in the world,
although aquaculture activity is increasing in other areas of the
UK, the UK Marine planning organization says.

The Brexit vote on next week Tuesday in the UK Parliament will give the independece of the UK fishery policy according to the PM Theresa May. It also means that in the future, UK will have to negotiate with its EEZ-border partners more in direct dialog in order to sustain and manage the economic, environmental, social and governance issues related to the area.  The oceans and seas are getting their true meaning for the socioeconomic development for a nation.

Päivi Härkönen, co-founder, EarthRate

Sources: EU Marine Spatial Platform, UK Marine Management Organization, EU Marine Strategy Framework Directive, Unclos, UK Oil and Gas, UK Goverment, UK Parliament
Business Research and Insights

The awareness of carbon emissions risks is rising among investors – how to hedge climate change?

The awareness of carbon emissions risks is rising among institutional investors. The fact that UN Paris meeting in December will have impact on the thinking of trading and pricing on emissions will lead to different outcomes to different companies and industry sectors. Institutional investors are now thinking how to avoid climate change related risks in portfolios, but on the other hand also how to benefit from the right options. Investor point of view is how to avoid the risks related for example to the time horizon.

Investors see different cap and trade -models in different countries and different renewables programms. Taxation, trading methods and pricing are some of the core elements, but they vary widely. One of the largest cap and trade -areas is EU, and the impact of the new pricing will be seen in the future. The economic slowdown has curbed the emission pricing and at the moment the system is not awarding companies to swift to renewables.

There are two kind of risks for investors related to CO2 emissions: income statement risk and balance sheet risk. Currently there is no or let´s say low CO2 price for companies. In the near future the repricing of emissions and taxation will impact the company profit and loss statements. The second risk area is the so called “stranded assets”. This means that fossil fuels companies are valued on their reserves, but on the other hand the companies cannot monetize all the reserves in their balance sheet because of the global warming and temperature increase.

Low carbon indexes
to hedge climate change

Investos have different strategies to reduce their climate change related risks in portfolios. Exclusion, engagement, hedging or all of them together.
One of the new low carbon indexes is MSCI Europe Low Carbon Leaders, which has been developed by Amundi Asset Management, the Swedish Pension Fund AP4 and the French Pension Fund FRR together with MSCI.

This index was launched September last year and by summer it exceeded its benchmark MSCI Europe index by nearly 200 basis points. The idea is that the most polluting companies are divested and the rest of the companies are weight again so that the exposure of stranded assets will be minimized. At the same time with this index it is possible to reduce the carbon footrpint of the portfolio, which is one of the issues for investors at the moment. For example in France the institutional investors are obliged to publish their portfolio carbon footprint.

Part of this development, Amundi and AP4 are also founders of the Portfolio Decarbonization Coalition (together with United Nations Environment Programme and its Finance Initiative and CDP, Carbon Disclosure Project) which aims to convene investors to reduce their portfolio exposure to GHG emissions. The target of this initiative is 100 billion dollars by the end of this year.

“China International Capital Corporation is committed to promote the decarbonization of investment portfolios and the use of low carbon indexes, particularly in Asia and in China, “said Chairman Jin Liquin in press release related to the support to Decarbonization Coalition.

” Portfolio decarbonization, I know that a Portfolio Decarboniation Coalition has been put in place and announced at the Climate Summit in NYC and that after only a few months of existence it has already received a 45 billion dollars committments. French actors are part of this mobilization, said the French President Francois Hollande.

After the launch, the members in the Coalition have increased and include also for example the Church of Sweden, Local Goverment Super,Mirova and Robeco SAM.

Päivi Härkönen

Finance Research and Insights

Is your company ready for the digital transformation?

Digital transformation is the key for growing business in the future. Lately we have seen many business cases with new, distruptive strategies, which will transform the whole business sector. Tesla was one the innovative companies last week to announce a new battery for homes and companies to store for example solar energy to be used in peak hours. This was a big step for electric cars manufacturer. This kind of trend will change the profitability of traditional utility companies and the whole energy ecosystem we are used to. Why have we not seen the traditional utility companies or car manufacturers  to innovate new business areas like this before? Maybe we hear more this kind of questions in the future. Traditional business sectors are facing new competition from areas they do not expect.

Digital transformation is about making the products and services with new information, more engaged, faster, reducing cost and delivering more value to customers than before. It is about using the new technology to deliver more outcome and fun to stakeholders.  Different sectors and business areas are more advanced than others, but new services like cloud will change the business totally and internet of things will fasten the development even more. And the next big question is if the company has embedded the corporate responsbility into its strategy and innovation. Climate change, scare natural resources and urbanization are affecting every business globally.

In the future we will see for example personlized medizine, predictive maintenance and analytics and more engagement. Consumer user experience will be the new black. Companies will be categorized to leaders and laggards dependent on the level of digital transformation and sustainability embedded. This is an opportunity for every company, but it depends on the management and boards to make it happen.

Digital transformation itself is a good example of sustainable living and process. It solves business problems, shorten product cycles, deliver more value with less energy & natural resources. Insights will follow insights and time will be saved in innovation process.  Big data is helping to make analysis and predictions. Is your company part of this big change what is happening RIGHT NOW?

In circular economy we have seen innovations, but with the new set up of technologies we can speed up the transformation to greener businesses and processes. Technology is the key for the Earth to mitigate climate change and to reduce the emissions in smart cities.

 

Päivi Härkönen (MSc. Econ) is management consultant of ESG (environmental, social, governance) and digital issues, communications, marketing and branding.

 

Business Research and Insights

Insight: BIM is leading the way to sustainable living and cities

Sustainable living and cities are megatrends at the moment. According to the EarthRate “ESG White Paper: Green Buildings” most megacities in the world are using different kind of best practises in their way to mitigate the climate change and reduce emissions. There is for example the Cities 40 -initiative which says that over 100 cities in the world are reporting about their climate change data to CDP (Carbon Disclosure Project).  Cities varies for example from San Jose to Salvador, Basel to Sydney and Moscow to Johannesburg. Two thirds of reporting cities said that they  account city-wide emissions.

According to the CDP data, 11 cities reported sea level rises in Europe and 23 cities of temperature increase in 2013. Floods were reported in 16 cities in North America and in 9 cities in Europe. CDP estimates that carbon reductions will lead to ROI of 33 % which means a value of 15 billion US dollars.

Real estates are one of the biggest elements in the cities to reduce emissions and to increase energy efficiency and new renewable energies. According to the United Nations Environmental Protection´s Financial Initiative (UNEP FI) Sustainable Buildings and Climate Initiative, the energy cost of buildings are one third of the total energy consumption globally. So, it is important to understand the whole life cycle of the real estate to examine the emissions and how to try to minimize them.

Now for example the global institutional investors are moving forward to seek real estate investments with energy efficiency ratings and information how the buildings are mitigating climate change. For example the world largest oil fund, the Norwegian Oil fund has said that they have 5 per cent of all the investments, in real eastate. Their portfolio is totally 6534 billion Norwegian kronors.  The fund can invest max 35 per cent in France, UK, US and Germany and other countries max 10 per cent. Green Buildings mean higher rents and better sales prices.

BIM is the biggest trend in properties

The biggest trend in the properties is the BIM (Business Information Modelling). This offers savings in time spent in designing the building and finding the right & optimal designs & solutions for the overall use of the building. BIM is the tool for architects, building specialists and project managers to work together for a more sustainable buildings, infrastructure and logistic.

BIM projects are widely used by goverments and in the UK Goverment recuirements is that by the year 2016 all Goverment projects should use BIM to save designing and the overall life cycle costs in the project and far most: to save energy as expected in the designing of the project. BIM is seen as to meet the energy and building performance management targets and it is a way to commit to climate change mitigation.

In the UK the climate change mitigation is targeted so that all the new built homes are zero carbon by 2016. This mandate was effective from April 2014 and it includes that a 6 per cent reduction in carbon emissions for new built homes.

BIM is used in big infrastructure projects like city transportation, logistics, highways, hospitals and other society buildings. This sector is expected to grow rapidly and the OECD estimates more than 40 trillion dollars could be spent on infrastructure projects worldwide by 2030.

Green bonds to excelerate the growth of Green Buildings

Green Bonds by real estate companies and investors is one the increasing phenomenoms in the financial markets at the moment. The aim of the green bonds is to target money to sustainable projects to lower climate change impact in buildings and lower energy use. The use of corporate bonds in also growing as an investment tool.

During the year 2013 and 2014 there have been several different green corporate bonds. Issuers have been for example the Swedish Real Estate company Vasakronan, Toyota Financial Services and Unilever.  According to Deallogic, the amount of green bonds has been 7,4 billion dollars.

The most important ESG KPI´s for real estates and building indudstry

EarthRate has made spesific industry ESG (Environment, Social and Governance)  KPI´s for real estates and building industry. The KPIs take into account the whole life cycle of the real estate, from the planning/designing of the house to the ending of its life cycle. If you would like to know more about the industry specifications, please send email to EarthRate: info@earthrate.fi. Thank you.

 

 

 

 

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