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European Edition
19th October 2021
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THE HOT STORY
Firms will have to disclose climate impact
New rules to be introduced by the Treasury will obligate some large businesses to start disclosing their environmental impact. The requirements are also set to apply to investment products and pension schemes. The Treasury said the new sustainability disclosure requirements mean an investment product will now have to set out the environmental impact of the activities it finances. As officials look to tackle greenwashing, companies will be told that sustainability claims will have to be justified "clearly" and net zero transition plans must be properly set out. Chancellor Rishi Sunak said: "We want sustainability to be a key component of investment decisions, and our plans will arm investors with the right information to make more environmentally-led decisions." The new rules, he added, will "set new global standards for sustainability that will boost the economy, protect the planet and support our net zero goals." Rain Newton-Smith, chief economist at the Confederation of British Industry, said greater clarity on environmental impact "will help investors channel finance into projects that are aligned with net zero targets and will reduce carbon emissions across our economy." BBC News notes that it is not yet clear when the rules will come into force - or what will happen to firms that do not comply – adding that details of the specific reporting requirements will be developed following a public consultation.
ESG COMPLIANCE
How to Track and Exceed ESG Goals

Regulatory compliance is the baseline that all companies are expected to meet but priorities are shifting. Effective leaders know that developing ESG-focused policies can help their organisations achieve big picture goals that will not only protect the environment but please savvy investors. So, what should an organisation do to manage the expectations of regulators, customers, investors and the public? Download this report and discover the 3 main environmental and sustainability areas on which organisations are focusing and how you can capture data and report on ESG data.
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INVESTMENT
Private equity firms going green as investors avoid climate risky investments
Analysis by BDO shows that more than half of private equity firms in the UK now adhere to the United Nations Principles for Responsible Investment, the world’s most-recognised set of ESG principles, with the rate hitting 55% compared to 49% a year ago. The report also shows that more than half of private equity firms have angled their investment strategies towards ESG measures, with companies increasingly having to prove to investors that they take the issue seriously. However, 34% of private equity businesses have yet to outline their own ESG commitments.
ECONOMY
Ex-BoE adviser: Rate rise to control inflation would be a 'disaster'
Former Bank of England adviser David Blanchflower has warned that lifting interest rates to tackle inflation could be a “disaster,” saying that price rises are almost certainly temporary. He told BBC Radio 4's Today programme that it was “very early days” to be looking at interest rate rises, saying that while Bank officials may opt to push ahead with an increase, he thinks it would be “a very foolish thing to do.” His comments came after BoE governor Andrew Bailey expressed concern about inflation and said the Monetary Policy Committee “will have to act and must do so if we see a risk, particularly to medium-term inflation.”
City generates nearly £100bn in taxes
Research by lobby group TheCityUK reveals that the City generated nearly £100bn in taxes last year. For every £100 in taxes, the financial, legal and accountancy sectors contribute nearly £13. The report shows that the accountancy and legal sectors alone yielded £20.5bn in taxes for the public coffers, a 5.4% increase on two years ago. The growth of these sectors has consistently outpaced the rest of the economy’s growth, with legal and accounting’s gross value added, a measure of output, rising 27.8% between 2011 and 2020 compared to 5.3% for the wider UK economy. Anjalika Bardalai, chief economist and head of research at TheCityUK, said: “The relative resilience of the legal and accounting sub-sector make it well-placed to make a strong contribution to the UK’s post-pandemic economic recovery.” The analysis shows that 755,800 people (2.3% of the UK workforce) are employed in the legal and accounting sectors, with partners estimated to be paying £5bn in taxes.
Business confidence at three-year high
The latest Santander Trade Barometer has found that UK businesses are at their most confident since 2018 despite widespread disruption to supply chains. The report found that since the economy emerged from lockdown, 73% of businesses are confident about their growth prospects over the coming three years. Santander said that companies had “largely moved past the initial pandemic-driven slump,” with 43% reporting an improved performance over the past year. While 48% of respondents said they planned to hire more staff, 35% said staffing challenges were the most negative aspect of the pandemic and 67% said attracting workers would be the most important factor determining growth in the coming year.
OPERATIONAL
EU hints at extension to euro-clearing equivalence deal
Mairead McGuinness, the EU’s head of financial services, has hinted at a possible extension to the post-Brexit deal which allows banks from the bloc to access clearing houses in the City. Saying that Brussels would prefer to avoid a “cliff edge” situation, she said: “We have to make sure that there is no instability in the short-term, but we also have to look at our long-term interests.” A temporary equivalence deal between the UK and EU means City exchanges and clearing houses run by the London Stock Exchange and ICE can work on euro-denominated deals. A carry-over deal where pre-Brexit rules still apply to the euro clearing market is due to run out by June 31st next year. City A.M. says industry officials expect the EU to grant the City a temporary extension, but with high volume interest rate and credit default swaps in euros likely to be excluded – meaning clearing would have to move to the bloc.
LEGAL
Government ordered to reveal firms awarded ‘VIP’ Covid contracts
The Information Commissioner’s Office (ICO) has ruled that the Government must reveal which companies were given “VIP” access to contracts for the supply of personal protective equipment in the early months of the pandemic. The Department of Health and Social Care has previously refused to disclose the names of 47 companies that had contracts awarded through a fast-track process allocated to firms with political connections. The ICO said failing to identify the firms is in breach of the Freedom of Information Act. A National Audit Office report last year found that companies referred as possible PPE suppliers by ministers, MPs or senior NHS officials saw a 10 times greater success rate for securing contracts than companies whose bids were processed via normal channels.
STRATEGY
Facebook to hire 10,000 in EU to work on metaverse
Facebook plans to hire 10,000 people in the European Union to develop a so-called metaverse - an online world where people can game, work and communicate in a virtual environment, often using VR headsets. "The metaverse has the potential to help unlock access to new creative, social, and economic opportunities. And Europeans will be shaping it right from the start," the company stated in a blog post. Facebook said investing in the EU offered many advantages, including access to a large consumer market, first-class universities and high-quality talent, and the new jobs being created over the next five years will include "highly specialised engineers." Facebook nevertheless claims the metaverse "won't be built overnight by a single company" and has promised to collaborate, and recently invested $50m in funding non-profit groups to help "build the metaverse responsibly."
Siemens prepares separation of large-drive business
German engineering and technology company Siemens has confirmed that it is preparing a possible separation of its large-drive applications (LDA) business. Handelsblatt reported that the separation of the unit, which produces heavy-duty electrical drive systems for ships, mines and rolling mills, is the first step to a divestiture. More than 7,000 Siemens employees around the world, including around 2,200 in Germany, will be affected by the move, Handelsblatt reported, citing company sources.
UniCredit sounding out market over leasing unit
Italy's UniCredit has invited expressions of interest from investors for its leasing business to gauge market appetite as it weighs a potential sale. Sources say UniCredit is looking to gather investors' valuations with no decision on the sale as of yet.
CORPORATE
BrewDog flotation could be delayed until 2023
Craft brewer BrewDog has suggested that its planned £2.1bn floatation may not happen until 2023, amid uncertainty in the sector. The company's CEO and co-founder, James Watt, denied that the delay was related to accusations from a group of former employees that there had been a "culture of fear" within the company. Advisers and banks are said to have recommended that a delay would be prudent given pandemic-related issues facing the hospitality industry.
LVHM and Kering hit by China slowdown
French luxury goods companies LVMH and Kering saw shares fall by 1.3% and 1.7% respectively yesterday, after China's economy grew at the slowest pace in a year in the third quarter. China is a leading market for fashion firms.
CORPORATE GOVERNANCE
Activist investors in stereo calls for GSK shake-up
Alex Ralph in the Times looks at activist hedge fund Bluebell Capital Partners and its call for a shake-up at GlaxoSmithKline. Bluebell recently wrote to GSK chairman Sir Jonathan Symonds calling for new leadership at the pharmaceutical firm. Mr Ralph says that although Bluebell denies it is acting in union with larger activist investor Elliott Management in its investment in GSK, “the two investors are close and are calling for similar changes.” With GSK preparing to separate its consumer healthcare division into a separately listed company, both Elliott and Bluebell have publicly urged GSK to consider a sale of the division instead. They have also called for CEO Dame Emma Walmsley to reapply for her job under a refreshed board.
THG founder gives up ‘golden share’
THG founder and chief executive Matthew Moulding has confirmed plans to give up his ‘golden share’ - a perk that allows him to block any takeover of the business. The company said the changes are part of a move to gain a premium listing on the London Stock Exchange. The special share blocks a premium listing under current rules. As it looks toward applying to the premium segment of the LSE in 2022, the firm will also launch a review of its corporate governance structure, with sources suggesting the company could potentially seek to appoint a non-executive chairman. Andrew Ross, an analyst at Barclays, said the removal of Mr Moulding’s special share and the plan to move to the main market were both “positive steps to addressing a complex governance structure.”
REGULATION
FCA refers 950 pension advice clients to FSCS
The Financial Conduct Authority (FCA) has written to 950 defined benefit pension transfer advice customers to tell them they may be entitled to compensation, with letters issued to customers of firms in liquidation where reviews have identified that some customers were given unsuitable advice. Recipients have been told how they can make a claim to the Financial Services Compensation Scheme. Earlier this year, the regulator identified nearly 60 advice firms who it said should carry out past business reviews on their pension transfer advice, with the City watchdog expected to continue reviewing firms’ DB advice until at least spring 2022. The latest batch of letters mean the FCA has now written to 3,591 DB transfer advice customers this year.
Regulator launches probe into Teletext Holidays
The Competition and Markets Authority (CMA) has launched court action against Teletext Holidays over failings in refunding customers for package holidays cancelled due to the pandemic. CMA chief executive Andrea Coscelli said the watchdog is requesting a court order to make sure Teletext Holidays immediately pays back the money it still owes to customers and refunds people within 14 days, going forward. He added: “Companies must abide by consumer protection law and treat their customers fairly.”

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