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Industry roundup: 22 September 2020

Partnership for Carbon Accounting Financials (PCAF) launches UK coalition

The Partnership for Carbon Accounting Financials (PCAF),  an industry-led partnership to standardise carbon accounting for the financial sector, has launched a UK coalition to further promote measurement and disclosure of carbon emissions in the finance sector. Initiated and chaired by the International business of Federated Hermes, and following a collaborative structure first created in the Netherlands, PCAF participants in the UK will enhance their cooperation on carbon accounting by forming this coalition.

Initial members of this UK coalition are the International business of Federated Hermes, Triodos Bank UK, NatWest Group, Lloyds Banking Group, CDC Group, Investec, Ecology Building Society and Nationwide Building Society.

The PCAF UK coalition will focus on applying PCAF’s methodologies for measuring financed emissions in a UK context, sharing best practices, working on data quality improvements and performing research on further method development.

Mark Carney, as the Prime Minister’s Finance Adviser for COP26 (UN Climate Change Conference) and observer to PCAF commented: “To achieve net zero we need a whole economy transition - every company, every bank, every insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them. For financial firms, that means reviewing more than the emissions generated by their own business activity. They must measure and report the emissions generated by the companies they invest in and lend to. PCAF's work to standardise the approach to measuring financed emissions is an important step to ensuring that every financial decision takes climate change into account."


SMEs running on empty as CBILS deadline looms 

Bounce Back loans, the HM Treasury support measure, used by SMEs are running low, according to the latest insights from fintech business lender MarketFinance. While SMEs are aware they can get more HM Treasury support by applying for larger loans through the Coronavirus Business Interruption Loan Scheme (CBILS), many did not know the deadline was end of this month. 

Over 1.2m SMEs took on a Bounce Back loan to pay their suppliers (39% of SMEs) and bolstered their business by setting up ecommerce and online shopping channels (29% reported doing this) to attract new customers. However, they only have an average of £9,106 remaining of their Bounce Back loan and the majority expect this will run out later this month. Promisingly, 6% have already repaid their Bounce Back loan. 

The CBILS initiative will conclude at midnight on 30 September 2020 with applications submitted before this deadline being valid for processing until the end of November. The majority of SMEs (77%) are aware of the larger loan scheme, CBILS, and 68% know they can refinance their Bounce Back loan using that facility. 

The MarketFinance survey found that most SMEs (76%) would be keen on having a CBILS facility ‘on ice’ in case they need it later in the year in anticipation of larger bills, taxes due towards the end of the year. However, critically, almost two-thirds (63%) aren’t aware of the deadline (end of September) by when they should apply for this. 


Fleetcor to acquire cross-border payments provider AFEX

Fleetcor Technologies has announced it has signed a definitive agreement to acquire Associated Foreign Exchange (AFEX), a cross-border payment solutions provider. By acquiring AFEX, Fleetcor says it will build upon its corporate payments line of business and strengthen its position as one of the largest business payments companies in the world. The transaction is expected to close in the first quarter of 2021, subject to regulatory approval and standard closing conditions.

AFEX delivers cross border payment solutions that help small-and medium-sized businesses (SMBs) break down currency barriers to grow internationally. The company focuses on providing international accounts payables products for businesses typically underserved by banks. Both companies offer ERP integrated cross border payment and risk management solutions to businesses.

Eversheds Sutherland provided legal counsel to Fleetcor. Greenberg Traurig provided legal counsel to AFEX, and BofA Securities provided strategic and financial advice to AFEX.

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