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

Green Bonds to foster the economic growth

Green Bonds are financial instruments to foster the economic growth globally, but how the markets are really working? Last year was a record year for the over 100 billion dollars green bonds markets and for this year 2018 the expectations are about 130 billion dollars according to Climate Bond Initiative.

EU made a study of this market a year ago. The study identified key bottlenecks that hampered the further growth of the green bond market in the EU area. The biggest challenge is the lack of green bonds and green project pipelines.

The findings show that Green Bonds would be a great instrument to lead the climate mitigation and to fulfill the Paris Climate Agreement. The growth of these instruments have been mainly in China so far, but also big, listed companies and institutional investors have issued this kind of bonds.

The study also highlighted the measures of policy makers to develop the markets further- to raise the awareness on the benefits of green bonds, and thus increase supply support capacity building and knowledge sharing.

According to EarthRate, an ESG company, green bonds are new financial tools that require more climate-related information and targets from companies but at the same time they give the possibility to enlarge the investor base of a company towards more long-term base.

According to Financial Times (2.1.2018) the annual investment need for Europe, to keep the temperature rise below 2 degree Celcius, is 180 billion euros. The EU Commission is also planning to ease the capital rules for the banks in order to boost their green investments. This should be part of the new sustainable finance action plan, which should be released in March 2018.

Green Bonds are modern way of acting in the financial markets. But they also foster the underlying economic growth for further climate friendly investments.

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Finance

SouthPole: 10 years of climate change projects

 

The Swiss global sustainability solutions provider, South Pole Group, is celebrating its 10 years anniversary this year. According to Dr. Maximilian Horster, a partner of South Pole, the past decade the company has grown to more than 150 employees in 17 different offices globally.

– We are a pioneer in the field of climate impact assessment of investments. Most of our projects are in the financial sector. About 50 / 50 percent we work with public and private companies. Our competitive edge is in the combination of different players and climate change specialists, Mr Horster says.

He predicts that the Paris climate meeting in last December was the first step into more integrated energy thinking globally.

– Our politicans have now realised that countries need more holistic views of climate change actions and mitigation. Carbon pricing and tariffs are examples of actions that need more focus in our political debate in order that the countries can swift to more renewables and zeroemissions targets, he adds.

The company has recently won multiple categories in the 2016 Environmental Finance Voluntary Carbon Market Rankings: the prestigious peervoted industry ranking recognised South Pole Group as Best Trading Company, Best Project Developer – Renewable Energy and Best Wholesaler.

EarthRate, an ESG innovator company, and SouthPole offer indepth carbon footprint analyses for investors and companies.

 

 

 

 

Business Finance

Amundi: Low Carbon is one of our competences

The European largest asset manager, Amundi Asset Management, has been in the Nordics for over 10 years. This Paris-based, listed company (AMUN.FP) with market cap of 6,5 billion euros, is known for the quality to client relationships and commitment to sustainable development.

–  We have been in the Nordics over 10 years, but we are both local and global. Amundi can offer its global presence and knowhow to its customers. Low carbon products with indexes can give our customers the possibility to have impact investing. We are also a founding member of the Portfolio Decarbonisation Coalition, which is an investment community targeted to mitigate emissions in the investment process, says the company Nordic head Ms Tove Bangstad.

Amundi Asset Management has nearly 1000 billion euros assets under management and is therefore one of the biggest financial institutions globally. Its customers are sovereign wealth funds, institutions, pension funds, corporates but also private investors.

Robots for the industry?

As one of the big institutions, Amundi is also considering what kind of possibilities new technology and robots could bring into the asset management industry.

– It is not far away, that robots would give you an investment strategy with possible funds and risk profiles. They can calculate thousands of different funds and make the best possible optimation. No one else could do that, she says.

This new technology has been taken into pre-use for example in the US and so far the experiences have been very positive, altought the personal contact is missing.

In the near future markets will be watching closely the UK Brexit decision and the US Presidential election and investors have been partly sfiting to save-haven investments to wait for the decision.

– One thing is sure, the turbulence in the financial markets is going to continue also during the autumn time, Bångstad says.

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Business

UK Treasuries favours Integrated Reporting

UK Treasuries has encouraged public sector organizations to adopt Integrated Reporting in their processes. According to IIRC (Integrated Reporting) UK Treasuries has urged public organizations to develop their own format to fit their businesses.

– Integrated Reporting encourages organizations to focus on how they are using all of their resources and relationships and how this is driving their strategy for value creation over the short, medium and long term, UK Treasuries says.

Business Finance

Credit Suisse CEO Thiam urges sustainable investing

One of the leading banking groups in the world, Credit Suisse (CSGN) is turning more to Sustainable Investing and Green Banking. The Groups´s CEO Tidjane Thiam  was the keynote speaker in the “Geneva Summit on Sustainable Finance” -event on Tuesday in Switzerland. He said that the banking group is in the process to focus more on longterm, sustainable and strategic economy than short-term capital gains.

Mr Thiam also emphasized the importance of technology in the digital transformation. The bank has for example announced co-operations with different tech companies in order to make the bank´s internal systems more stable, sound and secure to foster more long-term orientation and risk management.

– We are also looking for different kind of PPP-projects, where public and private companies can join for different kind of partnerships in our business areas, he said.

Credit Suisse announced this week also new restructuring actions, which means that the Group will focus more on its core business areas and increase cost savings from the Global Markets – activities.

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Business Finance

The Nasdaq Nordic and Baltic Stock Exchanges to implement ESG reporting

canstockphoto4076117The Nordic and Baltic Nasdaq Stock Exchanges have decided to join the global initiative for Sustainable Stock Exchange Reporting on ESG issues. This means that Stockholm, Helsinki, Copenhagen, Reykjavik, Tallinn, Riga and Vilnius have committed to produce a guidance on environmental, social and governance (ESG) disclosure for listed companies by the end of this year.

Nasdaq Nordic and Baltic exchanges joined the United Nations Sustainable Stock Exchanges (SSE) initiative in November 2015. This effort will also reinforce Nasdaq’s mission to provide fair, transparent, and efficient markets for investors. The forthcoming guidance will be aligned with the recommendations issued in 2015 by both the UN Sustainable Stock Exchanges’ initiative and the World Federation of Exchanges’ Sustainability Working Group.

For example the World Federation of Exchanges´Sustainability Working Group have several key ESG Metrics in their recommendations. Those include for example:

  • Direct/indirect GHG (greenhousegas) emissions
  • Water management
  • Waste management
  • CEO pay ratio
  • Gender pay ratio
  • Human rights policy
  • Board voting
  • Code of Conduct

This decision means that Nasdaq will work for the guidance with their stakeholders during this year and publish the guideline by the end of year. It will have some implications also to the IPO listings although the market reporting requirements differ for example in the First North and the main list.

The aim of this global Stock Exchange Initiative is to encourage responsible investment, enhance corporate transparency and ultimately performance on ESG (environmental, social and corporate governance) issues. The SSE is convened by the UN Conference on Trade and Development (UNCTAD), the UN Global Compact, the UN Environment Program Finance Initiative (UNEP FI), and the Principles for Responsible Investment (PRI).  (www.SSEinitiative.org).

Business Finance Lifestyle