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UK banks may face significant losses due to nature-related risks such as water scarcity and pollution, according to a study by the Green Finance Institute. The study warns that failure to address these risks could result in a 5% decline in the value of UK bank portfolios and a broader 12% economic decline by 2030. Nicola Ranger, director for greening finance at the University of Oxford, stated that these risks are material to both the economy and the financial system. The UK, which is struggling with ecosystem degradation, is one of the most nature-depleted countries in the world, analysis suggests. The financial consequences of ignoring these risks could surpass those of the 2008 financial crisis and rival the economic setback caused by the Covid-19 pandemic, according to the study, which identifies agriculture, utilities and manufacturing as the sectors most exposed to nature-related risks in the UK.

 

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The CEO of Stellantis, Carlos Tavares, has criticised the mandatory quota for selling electric vehicles in the UK, calling it a "terrible thing" that could destroy the manufacturing industry. The zero emission vehicle mandate requires at least 22% of all new cars sold in the UK to be in the zero emissions class, with the percentage increasing to 80% in 2030 and 100% in 2035. Mr Tavares has warned that the mandate could lead carmakers to turn away from the UK due to the unprofitability of selling electric cars and potential fines for falling short of the target. He suggests that the mandate should be more flexible and take into account companies that support green policies and contribute to the UK's trade balance.

 

The Times

Confederation of British Industry (CBI) analysis shows that retail sales fell in April, with a gauge measuring sales volumes compared a year ago falling to -44 from +2 in March. Alpesh Paleja, the CBI’s lead economist, said: “April’s sharp fall in retail sales was likely related to the earlier timing of Easter this year, so we should take it with a pinch of salt." However, he warned that “conditions do remain challenging on the ground,” noting that April’s fall in sales “was faster than expected and retailers aren’t overly hopeful about the month ahead."

 

Reuters

Under government plans to tackle Chinese espionage, academics and researchers involved in cutting-edge science at British universities are to be vetted by the security services. Vice-chancellors have been warned by the director-general of MI5 that hostile states are targeting universities to steal technology that can "deliver their authoritarian, military and commercial priorities." The move follows a secret review of vulnerabilities in higher education by the security services. The government is looking at new funding to increase security at sensitive sites. The plans would also require universities to consult with the security services when entering into funding partnerships and collaborations with foreign institutions.

 

The Daily Telegraph

The Times

Almost half of Britain's tax collectors are failing to meet the government department's requirement for staff to work from the office three days a week, according to Jim Harra, permanent secretary at HM Revenue & Customs.  Harra told members of Parliament on the Treasury Committee that remote working had no impact on service levels. “There is no difference between the number of calls taken whether a helpline adviser is at home or in the office. We see the same productivity,” Harra said. Remote working at HMRC has been under scrutiny amid complaints about customer service. HMRC handles tens of millions of calls and letters a year, with average peak call waiting times for self-assessment tax returns reaching 38 minutes.

 

Bloomberg

MPs on the Environment, Food and Rural Affairs Select Committee have written to the government demanding clarity over post-Brexit border control checks which are due to come in next week. The move comes after reports suggested inspections on plant and food products may be significantly scaled back due to fears of delays at the border. In a letter to Environment Secretary Steve Barclay, committee chair Robert Goodwill warned that ports and businesses were facing uncertainty and were “confused and frustrated” over the delivery of border controls.

 

Financial Times

The Guardian

A barrister who is conducting an independent review of the challenges of investigating and prosecuting fraud cases and the operation of the disclosure regime in a digital age says it is evident “that a perfect solution does not exist.” Preliminary findings published by Jonathan Fisher KC note that the Serious Fraud Office (SFO) average case has around 5 million documents and the proliferation of digital material and progressively complex offences means disclosure is an increasingly time and resource-intensive process for all parties. City AM notes that disclosure issues “have always been the SFO's Achilles' heel, resulting in long-winded investigations and problem-riddled trials.” SFO director Nick Ephgrave welcomed the findings, and said he supports a “disclosure regime that works for the digital age and ultimately speeds up cases outcomes.”

 

City AM

The European Parliament has passed new legislation to protect workers employed by digital platforms, such as couriers, drivers, and food delivery providers. The law creates a presumption of employment relationship, shifting the burden of proof to the platform to demonstrate that the worker is not an employee. The legislation aims to improve working conditions and prohibits firing workers based on algorithmic decisions. It also mandates human oversight for crucial decisions and imposes restrictions on processing personal data. Member States have two years to incorporate these rules into national law, which could lead to a broader review of employment contracts for workers under B2B agreements.

 

Warsaw Business Journal

City analysts warn that foreign predators are targeting undervalued UK companies, leading to speculation over which company will be the next takeover target. Analysts believe that vulnerable blue-chip stocks include BP, Unilever, Reckitt Benckiser, Standard Chartered, Entain, and Burberry, with Dr Martens and Aston Martin also identified as potential targets. Experts warn that although these companies are undervalued in the UK market, they have strong brand value, making them attractive to foreign buyers. Dan Coatsworth, of AJ Bell, said: "Publicly, these companies might give the impression everything is fine but behind closed doors management could be worried they are sitting ducks for predators seeking bargains." Susannah Streeter, analyst at Hargreaves Lansdown, observed: "Overseas buyers are still likely to steer more clear of growth stocks offering the promise of jam tomorrow and focus on those offering jam today in terms of solid earnings." 

 

Daily Mail

UK employers are reducing the number of flexible job opportunities, which could hinder the reintegration of inactive individuals into the workforce and undermine the recent increase in women's working hours, according to data from Reed Recruitment. The decline in flexible job postings, including those offering part-time and remote work, poses challenges for the government's efforts to ease labour market tightness. Employers are becoming stricter about when and where people work, with a decline in work-from-home jobs and a rise in hybrid positions. Experts argue that part-time and flexible-hour jobs are crucial for attracting people back to work. However, employers are now less likely to offer flexibility compared to during lockdowns.

 

Bloomberg

London Stock Exchange Group chief executive David Schwimmer is set to become one of the highest paid FTSE bosses. His pay will more than double from £6.25m to £13.2m this year after 89% of investors backed a pay rise. The backing came despite criticism from proxy advisor Glass Lewis, which had urged investors to vote against the plans. Mr Schwimmer's pay rise comes amid debate over whether British chief executives are underpaid compared to their American counterparts.

 

City AM

Daily Mail

Complaints related to current accounts and credit cards increased in the second half of 2023, according to the Financial Conduct Authority (FCA). The City watchdog recorded 874,568 complaints about banking and credit cards during the period, up 3.2% on H1 2023. There was also a 1% increase in complaints about current accounts, with 515,336 grievances recorded in H2. Credit card complaints jumped 7.5%, hitting 217,032 in the second half of 2023, while insurance complaints increased by 1% to 281,082. Investment-related complaints saw a rise of 3.4%, with 61,446 grievances recorded in H2. However, complaints relating to pensions and insurance saw a decrease in the second half of the year. Overall, financial services firms received a combined 1.87m complaints in the second half of 2023, which was a 1% decrease compared to the first half of the year. The proportion of upheld complaints saw a drop from 61% in the first half of 2023 to 58% in H2.

 

FT Adviser

The Independent

Child labour is a hidden risk in supply chains and it is being exacerbated by climate change. A new AI-driven tool, the Child Labor Index, scores companies based on disclosure levels, public perception, and supply chain exposure to child labour. The tool aims to raise awareness among investors and help them monitor risk in their portfolios. According to the International Labour Organization, poverty induced by climate change leads to increased reliance on child labour, particularly in agriculture. Environmental disasters push families into poverty, forcing children to work in farms. The AI technology eliminates human bias and assigns scores based on data from news sources and corporate disclosures. The tool is expected to be commercially available later this year.

 

Bloomberg

Hein Schumacher, chief executive of Unilever, has rejected claims that he has “watered down” the consumer goods group’s sustainability targets after he rowed back on a series of environmental and social pledges. Schumacher said he had to “bring realism” to Unilever’s ESG goals, which had been laid out by his predecessor, Alan Jope. His comments came as sales at the group rose by 4.4% in the first three months of the year, ahead of analysts’ expectations of 3.5%. Unilever also increased volumes for the second consecutive quarter as it tried to win back market share.

 

The Times

India's central bank, the Reserve Bank of India (RBI), has instructed Kotak Mahindra Bank to immediately stop onboarding new customers through its online and mobile banking channels, as well as to cease issuing fresh credit cards. The RBI cited serious deficiencies in the bank's IT systems and risk management practices as the reason for the order. Despite being under scrutiny and engaging in discussions with the RBI for the past two years, Kotak Mahindra Bank failed to address these issues adequately. The bank's core banking system and digital channels have experienced frequent outages, causing inconvenience to customers. The RBI warned that prolonged outages could impact the bank's ability to provide efficient customer service and harm the broader digital banking and payment ecosystem. The restrictions will be reviewed after a comprehensive external audit and remediation of identified deficiencies.

 

Techcrunch

US issuers and other firms anticipate that the US Securities and Exchange Commission (SEC) will reject their applications to launch exchange-traded funds (ETFs) tied to the price of ether. Recent meetings between issuers and the SEC have reportedly been one-sided, with agency staff not discussing substantive details about the proposed products, indicating that the filings will likely be denied. This would be a setback for the crypto industry, which had hoped that spot bitcoin ETFs would pave the way for other cryptocurrencies.

 

Reuters