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Does Good CSR Improve Profitability?

“Shareholder value is a result, not a strategy.”

Jack Welch, Former Chairman and CEO of General Electric (2009)

“Don’t be evil. We believe strongly that in the long term, we will be better served – as shareholders and in all other ways – by a company that does good things for the world even if we forget some short term gains.”

Google (2004)

To seek approval from customers, employees and their peers and businesses cannot ignore this topic. Whatever sector they are engaged in (and especially in controversial ones such as oil and gas, fast food, autos, mining or tech) they are expected to lay out and comply with a set of specific guidelines that will satisfy the increasing demands of the market-place.…

Sustaining Humanity’s Demand for Food and Energy

‘Agricultural investment is one of the most important and effective strategies for economic growth and poverty reduction.’

United Nations Food and Agricultural Organization (2015).

In a world facing rapid population growth, a changing climate and the depletion of vital resources, economic growth and prosperity depends on finding a sustainable way to meet society’s need for sustenance. Therefore, producers around the world are finding new ways to sustainably, and affordably, meet humanity’s growing demand for food and energy.

50,000 years of human civilization was needed to reach the first billion people on earth, but the latest billion was added in just over a decade.…

The Green Economy Will Start in Our Woodlands

“To build a sustainable, climate-resilient future for all, we must invest in our world’s forests.”

Ban Ki-Moon, Secretary-General of the United Nations (2015).

Our climate is changing. Over the past century the scientific community has documented dramatic shifts in global temperature, the rise of extreme weather patterns and the on-going deterioration of our ozone. The human race has become such a geophysical force that we are pushing ourselves into a new geological age, one that is now being referred to as the Anthropocene.

Global surface temperatures have risen by almost a degree Fahrenheit over the last century, with the rate increasing by 0.17 to 0.48 degrees per decade since 1970.…

Earth Overshoot Day

We are now living in an age of new challenges that require innovative thinking. This week’s mayhem in global markets, sparked by the Chinese Yuan’s devaluation on August 11th, has seen Shanghai’s Composite Index drop by 7.6%, Germany’s Dax and London’s FTSE drop 4.7% and the S&P 500 drop 3.8% – all in a matter of days. Although global stocks are now rebounding, investors have been reminded of how equity and bond market volatility can flip into dangerous territory with very little or no warning.

One of these new challenges is mankind’s increasing rate of consumption, whether equity related (US stocks saw their highest trading volume in four years on Monday) or our population’s growing need for sustenance.…

Brazil – Responding to Emerging Markets Uncertainty

“The best argument against democracy is a five minute conversation with the average voter”

– Winston Churchill

It’s not a view widely held and even less in evidence, but we believe that Dilma Rousseff deserves a lot of sympathy from the Brazilian electorate. Seven months into her second term, during which time the global environment for emerging markets has softened quite rapidly, the irony is that this technocrat ‘gets it’, and is making many of the tough financial decisions that investors demanded during much of her first term in office and which will accelerate a return to growth for the country.…

Population Growth ‘Almost Inevitable’ to 2050

The UN’s latest update on global population projections ‘World Population Prospects: The 2015 Revision, Key Findings and Advance Tables’ has just been released. It is a highly readable document, comprehensive and instructive on the likely pace of the planet’s population at the country and regional level. For this week’s newsletter, we will highlight some points of particular interest.

Big Numbers But A Percentage Slowdown in Growth

Globally the population grew by 1 billion to 7.3 billion over the last 12 years to mid 2015; it will take us another 15 years to reach the next billion. The table below shows regional forecasts based on the medium variant projections (as opposed to the high or low options), which make a number of assumptions on fertility (declining in African countries) and longevity (survival prospects at birth and living longer).…

Divergent Paths Open Up in the Commodity Sector

A report just released by the Australian Bureau of Meteorology states 2015 sea-surface temperature anomalies in the central Pacific will be the highest in 19 years, are continuing to rise and may surpass the record temperatures set in 1997. El Niño influenced sea surface temperatures are currently 2.9F above normal and are forecast to climb by an additional 4.9F in total by the end of December 2015 and start of 2016.

In response, investors have been fast increasing their exposure to agricultural investments, through indices or exchange-traded funds (ETFs). These saw net inflows of $800m during April and May 2015, in marked contrast to the net outflows of $2.4 billion during Q4 2014.…

Gold – Gone in 60 Seconds

First the good news; the gold price bounced on Thursday morning as the US$ weakened slightly. Now the bad – it still leaves the metal just off five-year lows and still smarting from its largest percentage sell off of 4% in the space of a minute early on Monday, July 20^thwhen bullion to the value of $500 million was sold in a flash during Asian trading hours. Large sections of the market are piling on the pressure and forecasting/guessing/hoping that the price this year will fall below $1,000 an ounce at some point during 2015. (On Thursday evening in London, gold was trading at $1,093.5 an ounce).…

Raising the Stakes in Global Development Banking

The fastest emerging economies in the world, which account for $16 trillion in GDP and 40% of the population, are consolidating their resources with the aim to break the monopoly of the International Monetary Fund and the World Bank. And why not? If they are managed well, banks will become high profile, prestige institutions that demonstrate power and intent, as well as being profitable businesses. Both the Asian Infrastructure Investment Bank (AIIB) and the BRICS’ New Development Bank (NDB) are aiming to create financial systems that better serve their own interests. Using their own resources to finance joint, large-scale projects in transport, energy and industrial development they will – if successful, disrupt, if not dethrone, six decades of US dollar hegemony.…

Brazil and the Benefits of Club Membership

The possible death throes of Greece’s membership of the Euro should not detract from the union’s core attractions. The forerunner of today’s European Community (EC), the European Economic Union (EEC) was set up as a trade body in 1958 to strengthen the economic and social ties across a violent and dysfunctional continent. Its two key members, France and Germany, had fought each other three times over the previous seventy-five years: it was reasoned that drawing both countries and their outliers together in a web of trade would allow for a more prosperous and peaceful continent. It’s worked and yet hand in hand with its enlargement, its ambitions have also expanded.…

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