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Number of UK firms setting ESG targets up 48% in two years - Industry roundup: 14 February

Number of UK firms setting ESG targets up 48% in two years

Britain’s manufacturers are stepping up their ESG commitments as the topic rises rapidly on the boardroom agenda in response to the growing labour market, government, investor and customer pressure. The number of firms setting ESG targets for their business has increased by 48%, with around two-thirds (62%) of manufacturers now doing so since 2021, according to ‘ESG in UK Manufacturing: Growth, Supply Chain Cooperation and the Future of Sustainability in the Industry’, a report launched by Make UK and Lloyds Bank.

The report, which looked at the progress, opportunities and challenges faced by UK manufacturers looking to improve their ESG strategies, also finds that more than three quarters (77%) of firms receive ESG customer requests. Still, less than half say they have the resources to meet them, highlighting a need for more significant support.

Companies are also accelerating their ESG requirements of their suppliers, with nearly three-quarters (74%) of them building ESG conditions into their procurement strategies, up from just two-thirds (66%) two years ago. Yet, despite this, four in ten (45%) are unaware of their suppliers’ performance against their targets.

Manufacturers are raising their ambitions and commitments to ESG as the issue moves beyond solely environmental matters. Customers, suppliers, investors, and employees increasingly expect companies to make the issue as core to their strategy as any other business objective.

 

US annual inflation higher than expected in January

US annual headline inflation rose 3.1% for the 12 months ending January, according to Consumer Price Index data released by the US Bureau of Labor Statistics. While this was a smaller increase than the 3.4% for the 12 months ending December 2023, it was above economist expectations of 2.9%. 

The all items less food and energy index, the gauge of core inflation, rose 3.9% over the last 12 months, the same increase as for the 12 months ending December. The energy index decreased 4.6% in that time, while the food index increased 2.6%.

The monthly headline inflation data showed an increase of 0.3% in January on a seasonally adjusted basis after rising 0.2% in December. The index for shelter continued to rise in January, increasing 0.6% and contributing over two-thirds of the monthly all items increase. The food index increased 0.4%, with the food at home index increasing 0.4% and the food away from home index up 0.5% over the month. In contrast, the energy index fell 0.9% over the month due largely to the decline in the gasoline index.

Monthly core inflation rose 0.4% in January, with increases in the shelter, motor vehicle insurance, and medical care indexes. The index for used cars and trucks and the index for apparel were among those that decreased over the month.

Commenting on US Consumer Price Index data, Ryan Brandham, Head of Global Capital Markets, North America at Validus Risk Management, said: “This data suggests that the final stretch in combating inflation might pose more challenges than anticipated by the market. This will bolster the US dollar and prop up US yields in today’s [13th February] trading session as the market revises its near-term rate cut projections. Pushing back market expectations for US rate cuts has been a prominent theme of 2024, and this data will reinforce that theme.”

 

Tunisia joins Pan African Payment and Settlement System

Banque Centrale de Tunisie (BCT) has joined the Pan African Payment and Settlement System (PAPSS) to become the network’s thirteenth Central Bank member. In a statement, PAPSS said the move further strengthened its commitment to promoting seamless cross-border payment services and enhancing financial integration across the African continent.

PAPSS, developed by African Export-Import Bank (Afreximbank) in collaboration with the African Union and the AfCFTA Secretariat, facilitates real-time settlement of intra-African trade and payments, in African currencies, across the continent. By uniting central banks from across Africa, PAPSS seeks to address the existing challenges faced by African businesses and individuals in accessing efficient and cost-effective cross-border payment services.

Banque Centrale de Tunisie’s membership in PAPSS signifies the bank’s determination to foster economic growth and development within the country and the African region. This collaboration should allow Tunisian businesses and citizens to benefit from enhanced payment efficiency, reduced transaction costs, and more opportunities to trade and pay with other African countries.

With this development, Tunisian commercial banks can begin onboarding onto the PAPSS system. Experts from PAPSS are prepared to assist and support Tunisian banks in completing this process.

Launched two years ago, PAPSS has steadily expanded its footprint in Africa, now establishing itself in four regions. This network includes 13 central banks, with six in the West African Monetary Zone (WAMZ) region (Nigeria, Ghana, Guinea, Gambia, Liberia, and Sierra Leone), three in East Africa (Kenya, Rwanda, and Djibouti), three in Southern Africa (Zimbabwe, Zambia, and Malawi), and one in North Africa (Tunisia). Additionally, it is anticipated that more central banks will join the platform throughout 2024.

 

Visa expands digital wallet capabilities and availability with Conferma Pay

Visa has announced extended digital wallet capabilities within Visa Commercial Pay, a suite of B2B payment solutions built in partnership with Conferma Pay, in an effort to revolutionise how businesses manage transactions globally. The innovation enables financial institutions to add virtual corporate cards into an employees’ digital wallet – including third-party wallets such as Apple Pay and Google Pay. It coincides with an expansion of Visa Commercial Pay across the Latin America and Caribbean region.

Visa Commercial Pay includes virtual card B2B payment solutions developed to improve cash flow for businesses and reduce outdated manual processes. Since its launch in 2020, Visa says it has helped corporates move from traditional business payment methods to more automated and secure processes. The news comes as a recent report from Juniper Research found that by 2028, global virtual card spend will have increased by 355%, up from US$3.1 trillion in 2023.

The improved Visa Commercial Pay Mobile will provide a commercial token account with configured payment controls, allowing for an efficient payment experience across both Point of Sale and CNP payment methods. The approach uses tokenisation technology to minimise the risk of fraud and provide a secure payment environment while enabling businesses to initiate transactions seamlessly, enhancing overall financial agility.

Regions Bank will be the first Visa collaborator to roll out the enhanced digital wallet capability for its treasury management customers. Regions operates in high-growth US markets across the Southeast, the Midwest and Texas, with commercial banking clients including a wide range of employers, each with its own unique payments and cash flow needs.

Following its launch in Asia-Pacific, Europe, the Middle East, Africa and North America, Visa Commercial Pay will be available for Latin American and Caribbean customers in 2024.

 

Automotive Cells Company secures €4.4bn project financing 

Automotive Cells Company (ACC) has announced the closing of a €4.4bn debt raising, increasing the funding for constructing three gigafactories for lithium-ion battery cell production in France, Germany, and Italy, and for R&D. 

This operation should accelerate the development of ACC and strengthen its position in the battery industry for high-performance, low-carbon electric vehicles. In December 2023, ACC started production for Stellantis at its Billy-Berclau Douvrin gigafactory in France on schedule. This paves the way for further industrial developments to meet demand, marked by the start of construction of the second block on the French site, before launching the construction of the first block in Germany and the double block in Italy.

The debt package will contribute to finance these capacities and is fully underwritten by a consortium of commercial banks, BNP Paribas, Deutsche Bank, ING, Intesa Sanpaolo, and supported by Bpifrance, Euler Hermes, and SACE. BNP Paribas acted as exclusive financial adviser to ACC.

 

MicroStrategy holds US$8.8bn in Bitcoin, 17x more than Tesla

According to data presented by AltIndex.com, MicroStrategy has by far the largest corporate Bitcoin (BTC) holdings, worth over US$8.8bn as of last week. The research shows this is 17 times more than Tesla and 21 times more than Coinbase.

Although Tesla made headlines three years ago with its announcement of investing in Bitcoin, MicroStrategy quickly took over its place as the public company with the largest BTC holdings. That year alone, the US business-intelligence software giant held over US$5bn in Bitcoin, twice Tesla's BTC holdings, showing the company doubled its investment in less than a year. The downside was that MicroStrategy used more than US$1.6bn in convertible debt to finance this. However, unlike some other major companies, MicroStrategy has continued investing in BTC ever since.

The Statista and Bitcoin Treasuries data show MicroStrategy’s BTC holdings increased by 53% in the past three years and hit more than US$8.8bn this month, much more than any other public company owns. Far below, Marathon Digital Holdings (MARA) ranked second with US$731.5m in total BTC holdings, up from the US$330m the company owned three years ago.

Once the biggest Bitcoin buyer among public companies, Tesla, dropped to third place. Statistics show Tesla now holds US$451.7m in Bitcoin, almost six times less than three years ago when the crypto boom started. Bitcoin mining giant Hut 8 Corp and Coinbase follow, with US$423.6m and US$418.5m in BTC holdings, respectively.

In regional comparison, American and Canadian companies lead in BTC investments. Two-thirds of all companies that have invested in the world's most expensive crypto come from the two countries. Europe counts five Bitcoin buyers among public companies, and Asia follows with only three. 

 

Finastra and Tesselate look to accelerate trade finance digitalisation for US banks

Finastra and Tesselate have launched an end-to-end pre-packaged service to facilitate faster and easier trade finance digitalisation. Tegula Trade Finance as a Service, powered by Finastra Trade Innovation and Corporate Channels, enables US banks to automate manual processes and adapt to new demands with a quicker time to market and value. Via Finastra’s FusionFabric.cloud, banks can seamlessly integrate fintech applications that use the latest technologies such as artificial intelligence, blockchain and automation tools.

Corporate Channels is a digital banking platform that provides banks with a single portal to unify trade, cash, supply-chain finance, lending, and treasury services for corporates. Trade Innovation is an end-to-end solution for frictionless trade and supply chain finance that uses straight-through processing, digitisation, and data analytics to support growth and agility. Tegula is a scalable, cloud-hosted and fully-managed Trade Finance as a Service platform that can be integrated within a bank’s organisation. The combined cloud-based service and access to Finastra’s wider fintech ecosystem means US banks can future-proof their business, increase revenue streams, expand into new markets, and strengthen security.

“Adopting new technology can be costly at every stage, and it can be challenging to resource IT teams with the right skills to manage it,” said Alexandre Arnoux, Chief Revenue Officer and Managing Partner at Tesselate. “By delivering our all-in-one joint solution as a highly secure managed service, banks do not need to invest in significant amounts of additional resources or take them away from their core business to pursue digitalisation.”

 

Record 900,000 new UK companies launched in 2023

Over 900,000 new companies were incorporated in the UK in 2023, making it a record year for new businesses, according to the New Startup Index from NatWest and Beauhurst. The start-up boom brings the number of active companies operating in the UK to 5.31 million, also a UK record high, pointing towards continued growth in the UK’s population of entrepreneurs despite challenging economic conditions such as heightened inflation and increased operational costs. 

Last year, the uplift in growth was driven by new online retailers, with over 82,000 new businesses starting in the sector. Some 49,000 businesses also began operating in the property letting space, and further down the top 10, 21,000 new takeaway and street food stands set up shop in 2023. Meanwhile, the sectors showing the slowest growth rate for new incorporations are led by packaging, passenger rail, and logistics warehousing businesses.

Across the UK regions, Northern Ireland benefited from the largest boom in start-ups year on year, with 14,000 new businesses starting up in the province in 2023, a 59% increase on the previous year. London benefitted from a 20% increase, and Scotland came in third with 11%.

The growth in female-founded businesses also continues to increase yearly, with a record 164,000 companies incorporated by women in 2023, up 4% in 2022 and taking growth in the five years between 2019 and 2023 to 26% overall.

 

Lightyear launches stock screeners for businesses

Investment platform Lightyear has announced the full launch of its web application with new stock screeners for businesses. The screeners - a directory of instruments with metrics and data - are completely publicly available.

Businesses can now access a fully functional web app from signing up to investing and managing portfolios - meaning new customers no longer need to download the mobile app to get started. The web app holds all the same features as mobile, including ways to deposit cash and the newly launched order types (limit and stop orders). Over half of Lightyear’s customers (57%) have said that access to their account and data on a bigger screen comes into play when choosing which broker to invest their money with.

Lightyear launched its new business accounts in August 2023 to help freelancers invest and earn interest on company money. It launched its web app in beta in April 2023, allowing customers to view and buy stocks. Since its launch, Lightyear has been adding features and iterating the web platform experience based on a feedback survey from 500 customers. This includes some of the web users’ most requested features: watchlists, tools for investment analysis such as analyst ratings, financials, earnings data, and news and investors activities and statement downloads to get an overview of transactions on accounts.

The screeners are divided into stocks and funds, allowing businesses to filter the entire Lightyear instrument universe based on specific criteria - from country and sector to price-earnings ratio, share price, and daily performance. Businesses can also learn more about selected stocks or funds, see analyst ratings and use the available instrument analysing tools.

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