Responsible Investor (June 9)
“Only in finance can a product lose 24% of its value and be celebrated as success. Since traditional benchmarks have lost more than ESG funds since the beginning of the year, ESG is feted by some as a success, a ‘refuge’.” Kudos, however, are not in order. “The rude fact is that, on the whole, ESG risk management frameworks did not prepare us for the inevitability of the pandemic. They did not help investors and banks anticipate the crisis, nor how to navigate it. The pandemic is a failure of mainstream risk management frameworks. Sadly, it is also a failure of ESG risk management frameworks.”
Tags: Banks, Benchmarks, Crisis, ESG funds, Finance, Frameworks, Investors, Pandemic, Refuge, Risk management, Success, Value
BBC (February 21)
“Chinese President Xi Jinping last year officially opened a bridge connecting Hong Kong to Macau and the mainland Chinese city of Zhuhai—the world’s longest sea crossing bridge—as part of China’s plan to connect Greater Bay Area.” This ambitious plan seeks to spur economic development and “lays out strategic visions for the major cities in the region to become hubs in different sectors.” For example, “Hong Kong would strengthen its status as a finance and trade hub” while Shenzhen would be a tech hub and “Macau would focus on tourism.” An impressive plan, but “analysts question whether its lofty goals can be achieved.”
Tags: Ambitious, China, Finance, Greater Bay Area, Hong Kong, Macau, Shenzhen, Tech hub, Trade, Xi, Zhuhai
Financial Times (January 24)
Undercover reporting by the Financial Times revealed “groping and sexual harassment” at a secretive black-tie event that “has been a mainstay of London’s social calendar for 33 years.” Thursday’s event, attended by 360 men “from British business, politics and finance” with entertainment provided by 130 female hostesses, however, will be the last. The expose unleashed a deluge of criticism and The Presidents Club is disbanding.
Tags: Black-tie, Business, Entertainment, Finance, Groping, London, Politics, Presidents Club, Reporting, Secretive, Sexual harassment, Social calendar, Undercover
Wall Street Journal (June 15)
The yield on 10-year German bunds turned negative, a new low. “This is good for governments that want to finance spending on the cheap, but it’s not so good for the private risk-taking that drives economic growth. Negative interest rates reflect a lack of confidence in options for private investment. They also discourage savings that can be invested in profitable ventures. A negative 10-year bond is less a sign of monetary wizardry than of economic policy failure.”
Tags: Bunds, Confidence, Finance, Germany, Governments, Growth, Investment, Negative interest, Options, Risk-taking, Savings, Spending, Yield
Institutional Investor (January 21)
“For more than half a decade, a seemingly irresistible momentum has been building around the idea that finance and technology are converging at a historical inflection point, a combination of business transformation and competitive disruption that has come to be labeled fintech.” Fintech “has legs,” making a “2000-style crash” unlikely. Still, fintech is not immune to cyclical decline, may be approaching frothy levels, and carries other risks as well.
Tags: Cyclical decline, Disruption, Finance, Fintech, Froth, Inflection point, Momentum, Risks, Technology, Transformation
CFO.com (March 13)
“While any good finance executive will focus first on the costs and revenue opportunities in proposed energy-saving plants, the risks and benefits to company employees and external society will be squarely on his or her radar, because they potentially affect the company’s brand reputation.” Chief Financial Officers (CFOs) will also have their eyes open for sweet spots, “where what’s good for the planet melds seamlessly with what’s good for the bottom line. For example, Costco found that changing its energy consumption helped cut its costs.” The problem is that most environmentally based metrics aren’t linked to financial metrics. For example, when a company reduces its carbon footprint, CFOs want to see the link with “an income statement, balance sheet, or cash-flow statement.” Does the smaller footprint reduce costs, increase sales or reduce liabilities such as lawsuits? “The challenge of sustainability at the corporate level is to find a way to answer that question in hard, numeric, provable ways that take into account the self-interest so basic to our free-enterprise system.”
Tags: Benefits, CFOs, Costs, Environment, Finance, Metrics, Risks, Sustainability
The Economist (January 7)
Bank bashing has become routine, but Britain should also “prize” the important contribution of finance. “London is by many measures the world’s biggest financial centre, and weakening it is in nobody’s interest—least of all Britain’s. Better regulation of banks is certainly needed…. But running down one of the world’s most successful (and mobile) commercial clusters is folly—and it is surely not the legacy Mr Cameron would wish to leave his successors.”
