UK to foster net zero emissions by 2050 -increasing R&D

The UK has decided to aim for net zero emissions by 2050. This world leader target means that the UK Goverment will update its Clean Growth Strategy and integrate this also in its Industrial Strategy. 

The Goverment has decided to increase the R&D spending to 2,4 % of the GDP by 2027 and increase the rate of R&D tax credit to 12 %. Britain is also aiming to host the COP26 in 2020 in London.

According to the net zero report,the UK will increase the use of electric cars and increase the capture of carbon from the air with new innovations.

Business Tech

UK to target net zero emissions by 2050? FT

The UK is targeting to set a new goal for carbon emissions. According to the report from Committee on Climate Change, UK should be net zero emissions country by 2050. This would equate to 1-2 % of the 2050 GDP, says Financial Times.

FT says that the report, which will be published on Thursday, will guide Scotland to be net zero already in 2045 and Wales 95 %zero in 2050 due to its sheep-farming industry.

The UK Parliament is expected to discuss about the Climate Change updates on Wednesday,when the House of Commons will have this topic on its agenda.The target would be reached by using more renewable energy sources, increasing the electric vehicles in transportation and for example capturing carbon from the air.

In 2018 the UK carbon emissions fell by 2,5 % sixth straight years in row.About 80 % of the UK homes are warmed by using natural gas.

If this new target would pass the Parliament,it would mean that the UK would be among the leading G7 countries to set this kind of target.  It is good to remember that the UK will leave also the EU Emissions Trading System as part of the Brexit deal.

In London there have been several climate activists protests during the last two weeks in order to speed the decision making on Climate Change.

Business Finance

Davos: Companies should have Climate Change strategy

According to the Global Risk Report by the World Economic Forum, Climate Change, Natural Resources and Biodiversity are among the the top global risk areas for this year. 

– Rising geopolitical and geo-economic tensions are the most urgent risk areas in 2019, with 90% of experts saying they expect further economic confrontation between major powers in 2019, the World Economic Forum Report states.

– Environmental degradation is the long-term risk. Rapidly evolving cyber and technological threats are the most significant potential blind spots; we still do not fully appreciate the vulnerability of networked societies, the report says.

– 2018 was sadly a year of historic wildfires, continued heavy flooding and increasing greenhouse gas emissions. It is no surprise that in 2019, environmental risks once again dominate the list of major concerns. So, too, does the growing likelihood of environmental policy failure or a lack of timely policy implementation. To effectively respond to climate change requires a significant increase in infrastructure to adapt to this new environment and transition to a low-carbon economy. By 2040, the investment gap in global infrastructure is forecast to reach $18 trillion against a projected requirement of $97 trillion. Against this backdrop, we strongly recommend that businesses develop a climate resilience adaptation strategy and act on it now, says Alison Martin, Group Chief Risk Officer in the  Zurich Insurance Group.

The Wef Davos meeting will be held next week in Davos, in Switzerland. Around 3000 quests are expected to come to Davos, including Japan PM Shinzo Abe, German Angela Merkel and Prince William, the Duke of Cambridge.

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Business Lifestyle

Highlights of the year 2018 – Brexit, trade talks and green finance

The year 2018 was a year of Brexit, electric cars and trade talks. It included special moments in the financial markets and in the company side. Green Bonds and Green Finance were getting more attention in the markets and trade talks and Brexit were the topics during the year 2018 along. Climate Change and low carbon landed also in the agenda of central banks.

Investors were also asking what is the role of the City as a global financial hub. Should it have its own rules in spite of the Brexit? In the financial hub competition, Frankfurt and Paris were the European cities to get more new financial offices as financial companies were moving some operations to the EU side.

The UK Parliament is expected to vote of the Brexit during Janury 2019 after very intensive debate about the deal during the year.

Climate Change has become part of the everyday life in the financial markets and for example one of the biggest insurance companies in the US, Berskhire Hathaway informed in February 2018, that it has got 3 billion dollars losses of the natural catastrophies, the hurricances in the US. Several central banks, including the European Central Bank and some Asian ones, have also agreed about the co-operation in the climate issues and how to monitor the impact on the markets.

In the tech-side augmented reality and ioT were the themes for the year. Apple, Amazon, Google, Tesla, Intel  and Samsung  were one of the tech-companies to deliver new services related to the new technology. On the other side of the topic, Facebook was dealing with the privacy issues globally. New tech- companies listed in the markets were for example Spotify and Xiaomi.

Year 2018 was a year of electric cars in many countries. The e-cars breakthrough with charging issues was one of the tech topics as well. Telsa founder Elon Musk was the leading industry sector figure as he estimated that Tesla would make one million cars by 2020 in February 2018.

Also the German automakers announced new investments and concept cars. For example the BMW Group launched an autonomous driving campus in Munich in March 2018.

Year 2018 was also a year for luxury goods and services. The Basel World 2018 -fair announced its good selling and for example the CEO of Hublot, Ricardo Guadalupe,  told ComteamPUB+ that the company expects double digit growth for the year and that the Chinese customers will be the leading segment.

In the debt markets the US Uber and Netflix issued their junk bonds to investors. Uber, the ride-sharing company, is said to plan an IPO for the year 2019 according to the secret filings to the SEC.

One of the biggest infrastructure projects ever, the China Silk Road, is getting more attention from the green investors side, while the organization made its first announcement of the green principles for the project co-operation and operators. The ancient Silk Road is expected to rise the GDP growth by 4 % or 240 billion dollars in the countries invlolved according to Credit Suisse analysis.

The aim of the Roman time Silk Road is to connect the western Europe with the eastern coast of China and to renew the infrasturcture in between. This means also that the 10 world largest container ports are located along the route.

Trade talks between different countries have continued lively during the year. US and China have been in the headlines, but also the EU with its agreement with Japan.  The political situation and rising volatility in the financial markets tell the direction for the next year. Geopolitical easing is needed.

Päivi Härkönen, co-founder, ComteamPUB+

 

 

Business Finance Lifestyle

G20: Sustainable Food and global growth

The Group 20 leaders agreed to promote Sustainable Food Future during their Argentina meeting this weekend. According to the declaration, the group is commited to tackle the challenges of food security.

– We will promote sustainable agriculture, conscious
of the importance of sustainable soil, water and riverbanks management.
We encourage the voluntary use and sharing of innovative as well as traditional agricultural practices and technologies. We highlight the importance of collaboration among public and private stakeholders to strengthen risk management, they said in the statement.

The leaders also raised the importance of protecting the biodiversity and providing effective responses to reduce the impacts of extreme weather conditions on agriculture.

For example this year has been a very good wine year in Europe due to the high summer temperatures, but in California, the lack of fresh water and fires have had negative impact on the wine production. The Climate Change is having long-term impact over the farming and the way soil and water is being used. New technologies and AI is then needed to scale the change.

The leaders agreed to mitigate the Climate Change according to the Paris Agreement. The United States reiterated its decision to withdraw from the Paris Agreement .

– We welcome the strong global economic growth while recognizing it has been increasingly less synchronized between countries and some of the key risks, including financial vulnerabilities and geopolitical concerns, have partially materialized, the leaders also mentioned.

They said also to be commited to achieve a strong and sustainable growth and to enhance the confidence in order to proceed with the tradetalks. The group also called for the reform of the World Trade Organization, WTO.

Next year the meeting will take place in Japan. The G20 is a forum of leading economies in the world. The G20 is made up of 19 countries and the European Union. The 19 countries are Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States.

The countries represent 85 % of the global economic output and 80 % of the global investments.

Business

Berkshire Hathaway: 3 billion losses from hurricanes

 

One of the largest holding companies in the US, Berkshire Hathaway (BERK)  has commented the environmental losses in their insurance operations. According to their CEO Warren Buffet, the company estimates that the three hurricanes in the US (Harvey, Irma and Maria) caused the company 3 billion dollars losses.  The company also estimates that the company´s share of the big environmental damages  in the US would be around 3 % in the future.

The company commented these on Saturday, when Mr Buffet also published his letter to shareholders. Hurricanes Harvey, Irma and Maria and the wildfires in California have been in the headlines when climate change and rapid urbanization are increasing the insurance companies environmental losses. In Berkshire, the insurance businesses are in Geico insurance company and in General Re reinsurer.

Last year was very good for the company, showing 23 % increase in net worth  totalling 65,3 billion dollars.  Nearly half of it, about 29 billion dollars, were from the new taxation gains from the president Trump administration.

Berkshire Hathaway is also showing 116 million dollars cash and according to Buffet they are searching for new purchases. – The key qualities we seak are – durable competitive strenghts, he wrote in the letter.

He did not comment the company´s  big positions like Apple (about 3 %) or WellsFargo. The company made smaller acquisitions during last year and for example a company called HomeServices, a real estate brokerage company, is now the second largest in the US – and focusing on this 3 % real estate brokerage  business.

Business

TaskForce: Four key areas related to climate change and financial disclosures

Financial Stability Board and its working group, the Task Force, has published its recommendations for companies related to climate change and financial disclosures. This working group was established in December 2015  to set a voluntary, consistent disclosure for companies.

The 32 industry members of the Task Force, who are drawn from a wide range of industries and countries from around the globe, finalised the recommendations after extensive public engagement and consultation, including public consultation on a draft of the recommendations in December 2016.

The TCFD developed four recommendations on climate-related financial disclosures that are applicable to organisations across sectors and jurisdictions. The recommendations are structured around four thematic areas:

  • Governance: The organisation’s governance around climate-related risks and opportunities
  • Strategy: The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning
  • Risk Management: The processes used by the organisation to identify, assess and manage climate-related risks
  • Metrics and Targets: The metrics and targets used to assess and manage relevant climate-related risks and opportunities

In a joint statement, the TaskForce leaders say: “We encourage other business leaders to join us in this united effort to improve disclosure across sectors and regions. The Task Force’s recommendations will catalyze more consistent, comparable, and reliable disclosure of climate-related information that will facilitate more informed business and investment decision-making. These disclosures are an important step forward in enabling market forces to drive efficient allocation of capital and support a smooth transition to a low-carbon economy.” This private-sector TaskForce was chaired by Michael R. Bloomberg.

The signatories include for example companies like Aviva, Bank of America, Barclays, BNP Paribas, Borsa Italiana, London Stock Exchange, Calpers, Citigroup, Deloitte, EY, KPMG, PWC, ING Group, Moody´s, S&P and UBS Group.

The recommendations are backed by over 100 companies with market capitalisations of over 3,3 trillion US dollars and financial firms responsible for assets of more than 24 trillion US dollars.

The Financial Stability Board promotes international financial stability; it does so by coordinating national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory and other financial sector policies.

Business Finance