As COVID-19, and the measures implemented to slow its spread, continues to impact economies around the globe, the link between Islamic finance and the social aspect of environmental, social, and governance (ESG)-focused investing are coming to the fore, according to S&P Global Ratings.
While the similarities between Islamic finance and the environmental and governance aspects of ESG have long been recognised, the social aspect of Islamic finance has until now been somewhat secondary. Now, with COVID-19 hampering core Islamic finance markets – and unemployment rates rising – the Islamic finance industry has been exploring the possibility mitigating the damage with social instruments.
S&P Global Ratings believes Islamic finance social instruments can support core Islamic countries, banks, and corporates in navigating today’s uncertain economic landscape.
Following outreach by Moorgate, the report was covered by The Peninsula Qatar, ZAWYA, Khaleej Times, Al Bawaba, Trade Arabia, Gulf News, Gulf Times, MENA FN, Al Khaleej Today, and Pakistan Observer
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 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.
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.
Today, assets and liabilities are changing in more complex ways and being impacted by more factors, making effective risk management far more challenging – and far more crucial. In Benefits and Pensions Monitor, Matthew Seymour, CEO of RiskFirst, explains how, with the right technology tools, advisors and asset managers can be equipped to help plans identify and understand their needs; make optimized decisions on how risk can be best managed; and capture opportunities to maximize their investment strategies.
To read the full article, please click here and turn to page 27
Following an interview during Sibos, Paul Camp, CEO of Treasury Services at BNY Mellon features in a bobsguide article examining technology investment. Paul explains that there is a need to invest both in current systems that are used daily by clients, while also looking to the future.
“What we are very cognisant of – and the technology companies don’t always get it – is that our clients need both,” said Camp on the side lines of the conference. “They need the stuff which works today and has worked for years, because that model is not going to switch instantaneously, and they need a path to the future.”
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China’s Belt and Road Initiative (BRI) presents significant potential for the future of global trade. And the country’s reliance on the Middle East for oil imports means that there is potential for the region to become key beneficiaries of the ambitious project. This could bring significant benefits to the Middle East, including increased investment, improved infrastructure and an increase in bilateral trade.
In an article for Banker Middle East, Bana Akkad Azhari, Head of Relationship Management MEA & CIS, BNY Mellon, discusses the striking opportunities for the Middle East in China’s Belt and Road Initiative, and the role that local and global banks have to play in harnessing these opportunities.
To read the full article, please see page 46 of Banker Middle East‘s June edition here.
Speaking to IFR, Marc Vincent, Natixis’ Head of Corporate and Investment Banking (CIB), elaborated on the French bank’s M&A strategy.
Natixis has taken a unique approach to advisory work – by teaming up with established boutique firms around the world. This month, for example, it added to its M&A network by taking a majority stake in Australian energy and natural resources adviser Azure Capital. What’s more, annual M&A revenues have grown about tenfold in the past six years to nearly €200m, Vincent explained.
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According to a recent report by S&P Global Ratings, executives and asset managers are in agreement that the rise of environmental, social, and governance (ESG)-based investing will likely accelerate as a younger, more values-oriented crop of investors enter the global markets.
Doug Peterson, S&P Global President and CEO, told attendees of launch event for S&P Global Ratings’ ESG Evaluation tool, “Now more than ever, companies understand and have a much better appreciation of their responsibilities as corporate citizens. We see ESG matters as an essential component of sustainable company performance.”
Following outreach from Moorgate, the report was covered by Aqua Now, Wealth Adviser, SDG Knowledge Hub, and Institutional Asset Manager.
Following the extension to the Brexit deadline granted to Theresa May at an EU summit in Brussels from 12th April to 31st October, Rene Defossez, senior economist at Natixis, commented: “This latest delay solves nothing and won’t be an incentive for firms to invest or call off their contingency plans. This delay merely points to lastingly weak growth.”
“Brexit is much like a computer virus: it is causing malfunctions to the UK’s economic and political ‘programs’,” said Defossez. “[The] European Summit has not really acted as an anti-virus: the political situation in the United Kingdom remains deadlocked and the country’s economy will continue to suffer from Brexit-related uncertainties.”
The comments can be found in this article by The National.