In an interview with Seafood Source, Matthew McLuckie, Director of Research at financial think tank Planet Tracker, delved into the financial risks that investors in the US$45 billion farmed shrimp industry are facing.
Shrimp farming is the cause of 30% of mangrove deforestation and coastal land use change in Southeast Asia – which is in turn threatening the ecological sustainability of the industry, and consequently, its financial profitability.
“Investors around the world could be at risk as rules come into force preventing the importation of products linked to past and future deforestation,” says McLuckie.
According to McLuckie, neither shrimp companies nor the top 20 institutional investors report mangrove deforestation or emissions from farmed shrimp. As a result of this lack of disclosure, profit margins cannot be accurately assessed, meaning that investors cannot be confident of their risk exposure.
“These top 20 institutional investors exposed to farmed shrimp equities must insist upon greater transparency and reporting on farmed shrimp revenue from these companies because they are going to face ongoing environmental shock risks,” McLuckie continues. “These are large-scale Japanese conglomerates that are involved. This really is a global issue.”
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A lack of economic diversification, coupled with a sometimes-lower availability of external funding sources, means that a decreased oil and gas prices and shifting investor appetite could contribute to deteriorated creditworthiness for some GCC banks. That’s according to S&P Global Ratings, in its recent report mini-series exploring the credit risks that the transition towards cleaner energy sources could have on the GCC’s banks and overall economy.
While GCC economies have somewhat diversified away from oil since 2012, S&P Global Ratings’ hypothetical long-run stress test suggests that the average rating of a Gulf sovereign could fall by two notches from ‘BBB+’ to ‘BBB-’ if oil prices fall below US$40 by 2040, highlighting that the current pace of economic and fiscal diversification is insufficient to counter the decline in oil prices.
Following outreach by Moorgate-Finn, the research was covered by Trade Arabia, ZAWYA, AMEInfo, and The Peninsula Qatar.
A report published by non-profit financial think tank Planet Tracker in collaboration with The London School of Economic (LSE)’s Grantham Research Institute on Climate Change and the Environment examines the dependence of sovereign bonds on reliable flows of natural capital – that is, the world’s stock of natural resources.
The report identifies Argentina and Brazil as the two G20 countries facing the greatest number of risk factors associated with their economic dependence on their natural capital stocks such as soybean and cattle. An estimated 28% of Argentina’s sovereign bonds and 34% of Brazil’s sovereign bonds will be exposed to anticipated changes in climate and anti-deforestation policy over the next decade. For Argentina, this rises to 44% after 2030.
In the report, Planet Tracker and the LSE propose a first framework for factoring natural capital risks into sovereign debt analysis based on traditional credit rating factors: institutional, economic, trade, natural hazards, and fiscal.
Following Moorgate-Finn’s outreach, the report was covered by Bloomberg, Yahoo Finance, Environmental Finance, Natural Capital Coalition, Green Finance Platform, Bonds & Loans, Public Debt Management Network, Investing.com and Financial Post.
Driven by an expansion of the pool of financing options for investors, the sustainable debt market will likely surpass US$400 billion in 2020, said S&P Global Ratings in the latest edition of its annual sustainable debt outlook.
According to the outlook, the strengthening of key market trends such as rising absolute global fixed-income issuance and private financing, as well as the regulatory and political push in Europe, will likely push green-labelled bond issuance to US$300 billion in 2020. Meanwhile, as investors continue to explore ways to contribute to sustainability objectives, the market will continue to diversify and innovate, with more nascent sustainable financing instruments complementing the continued expansion of the green bond market.
Following outreach by Moorgate-Finn, the report was covered by Financier Worldwide, Markets Media, Environmental Finance, ImpactAlpha and International Financing Review.
RiskFirst has announced the appointment of Tarik Ben-Saud, who has been hired in an advisory capacity to support and accelerate the development of RiskFirst’s front office investment management capabilities, including the roll-out of its fixed income and LDI attribution application, PFaroeAttribution. Ben-Saud has 30 years’ investment management experience, including senior roles at Blackrock and Insight Investment.
The news was covered by Private Equity Wire, Global Banking & Finance Review, Financial IT, Fintech Finance, Fintech Zoom and Yahoo Finance.
UK-based consultancy PwC and financial technology provider RiskFirst are reinforcing their relationship with a new agreement, which will benefit clients by bringing online pensions platform Skyval, and RiskFirst’s PFaroe platform closer together.
Skyval was launched jointly by PwC and RiskFirst in 2013 in response to a growing need for more accurate, reliable and up-to-date pension plan information. Under the new agreement, Skyval and PFaroe are being brought onto the same underlying platform, making it easier to exchange information, thereby facilitating closer working relations across all plan stakeholders.
Following Moorgate’s outreach, Wealth Advisor, Financial IT, Fintech Finance, The Business Journal, Digital Journal, and Yahoo Finance covered the news.
Michael Boguslavsky, head of AI at Tradeteq, and author of a newly-released whitepaper, “Machine Learning Credit Analytics for Trade Finance”, has written a commentary for Trade & Receivables Finance News where he discusses how machine learning techniques, combined with broader and deeper company data, can dramatically improve credit scoring for SMEs. Current scoring methods – such as forms of the Altman Z-score – are a primary reason SMEs so often fail to secure the trade finance they need, argues Boguslavsky. Using new models, receivables finance becomes more accurate and less risky, making it a more readily available and less costly source of working capital for SMEs than ever before.
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Author of a newly-released whitepaper, ‘Machine Learning Credit Analytics for Trade Finance’ and head of AI at Tradeteq, Michael Boguslavsky has written an expert piece for The Global Treasurer where he discusses how machine learning techniques, combined with broader and deeper company data, can improve credit scoring for SMEs. Current scoring methods – often forms of the Altman Z-score – are a primary reason SMEs so often fail to secure the trade finance they need, argues Boguslavsky.
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Tradeteq, the trade asset distribution platform, recently released a white paper demonstrating how machine learning, combined with broader data collection, can improve access to trade finance for SMEs. Authored by Michael Boguslavsky, Tradeteq’s head of AI, and titled Machine Learning Credit Analytics for Trade Finance, the paper proposes a radical new approach to credit scoring that could particularly benefit SMEs in trade finance.
To read coverage of this news in the specialist press, please go here: Finance Digest, Global Banking & Finance Review, TXF, TRF News, Fintech press releases.
To download the whitepaper, please go here.
RiskFirst and STOXX Ltd, the operator of Deutsche Börse Group’s index business and a global provider of innovative and tradable index concepts, have announced the launch of the new iSTOXX RiskFirst LDI index family. The innovation – released on 23rd April 2018 – provides independent benchmarks for liability-driven investments (LDI), providing a new solution to the governance and accuracy issues that have typically challenged the £1 trillion market.
Matthew Seymour, CEO of RiskFirst commented that RiskFirst’s flagship product, PFaroe, “is rapidly becoming an industry standard for the modelling of pension plans and therefore offers us unique insight into the behaviour of pension plan cash flow profiles at a very granular level. When combined with STOXX’s extensive experience in designing innovative and objective investment benchmarks, the result is a set of indices that deliver great value to UK pension plans.”
Moorgate disseminated the announcement, and news of the partnership and launch of the iSTOXX RiskFirst LDI index family was covered by the following specialist publications: Professional Pensions, Wealth Adviser, Institutional Asset Manager, International Finance, Financial IT, AlphaQ, etfexpress, ETF Strategy, Global Capital, Global Investor, Mondovisione, LeapRate, Digital Journal, Fintech Roundup and ITbriefing.net.