Etiqueta: T7

Link: Investors grapple with complexities of biodiversity | Financial Times (ft.com)

Date: October 26, 2022

Media: FINANCIAL TIMES.

What happened?

“Irreversible consequences for the environment, humankind, and economic activity, and a permanent destruction of natural capital.” That is how the World Economic Forum characterises biodiversity loss in its 2022 Global Risks Report. The main reason is because humans are growing more crops, using more water and cutting down forests.

Who and where it affects?

It affects the biodiversity of planet earth. This mean that it affects humanity, natural capital, animals, the enviroment, etc. About 1 million animal and plant species are at risk of extinction, according to the UN.

What sort of public or private institution are involved?

In addition to TNFD’s (Taskforce for Nature-related Financial Disclosure) framework, other initiatives are under way to set targets and provide guidance for business and investors. Among them is a global biodiversity framework (GBF) that the UN is developing. Meanwhile, almost 100 investors with collective assets totalling €14tn have signed the Finance for Biodiversity pledge, which was launched in 2020. Signatories commit to five steps: to share knowledge; to engage with companies; to assess impact; to set targets; and to report publicly on the biodiversity impact of their investments.

Why is it important for banking and finances?

It is important for finances because not taking into account the effect of the loss of biodiversity can mean a significant risk in the portfolios, that is, they may not be setting the appropriate prices, which could mean a great loss. In short, it is a possible financial impact that is difficult to quantify. 

What do you think will be the consequences in the foreseeable future?

The consequences are undefined, but as we said in question 4, it could mean a significant risk to portfolios, as they may not be priced appropriately, which could mean a big loss. In addition, if investors and companies engage as set out in the targets, it would help climate change. 

SDG: 14. Underwater life, 15. Terrestrial ecosystem life.

FRI, OCT 22 2021

Link: https://edition.cnn.com/2021/10/22/economy/uk-inflation-5-bank-of-england/index.html

What happened?

The UK is concerned that the inflation could reach 5% next year, while the Central Bank’s target is 2%. It happens because of a product and labor shortages. That is the consequence of the coronavirus pandemic and now energy price hikes.

Whom and where It affects?

It affects the UK economy and soon could have consequences on international relationships. For example, British consumer goods giant Unilever (UL), that operates all over the world, hiked prices in September. On the other side, the main population of the UK can be damaged too, because of the rising prices and high unemployment rate.

What sort of public of private institutions are involved?

Starting with public entities, we find the Bank of England, of which one of its main economists informs us about the seriousness of the economic situation in the United Kingdom due to the shortage of products and labor. On the other hand, in the private sphere we highlight the Office for National Statistics, which tells us about the economic stagnation of the United Kingdom and its GDP.

Why is it important for banking and finance?

Economists worry that the United Kingdom may be entering a period of «stagflation» characterized by weak economic growth and rising prices.

The worsening product and labor shortages will put the brakes on the economic recovery at the same time as higher energy prices drive up CPI inflation.

What do you think will be the consequences in the foreseeable future?

Currently, it is already having importance in the economy due to the bottleneck in the manufacture of all kinds of products, where society demands more than factories can manufacture. This situation is applicable to any product such as energy, where we are seeing its price increase day after day. Therefore, we can foresee that prices and inflation will continue to rise with no possible solution in sight.

Keywords: Stagflation, CPI, ONS, Inflation, High Unemployment Rate.