Inline Insights

On 6 October, a new acronym was introduced to the world of aviation and climate change. CORSIA – the Carbon Offset and Reduction Scheme for International Aviation – is the outcome of what many in the aviation industry have described as an “historic agreement” to tackle the burgeoning problem of aviation emissions.

The prospect of video gamers becoming paid professionals, and people placing bets on the outcome of contests, would have seemed unthinkable a few years ago.

Some of the UK political instability following the EU Referendum in June is beginning to dissipate. A new Prime Minister, reshuffled Ministerial teams, and reshaped Government machinery are in place. A timetable of sorts for the next steps is beginning to form, ie. no triggering of Article 50 to commence the departure negotiations, during this calendar year, but likely early in 2017. What is still concealed in opacity is any inkling of what the UK position might be in the parallel discussions on a future economic and co-operative relationship with the EU. 

With just six weeks left to go, the battle over the UK’s continued membership of the European Union is rising in volume and intensity. A key issue for investors in UK-traded financial services products and markets is undoubtedly what effects the decision made on June 23 will have on the climate for purchasing or retaining bonds, equities or other assets linked to either the performance of sterling or the stock market. Ultimately these are reflections on the underlying health of the UK economy itself, and the likely economic temperature if the UK stays within or leaves the Single Market, both in the short term and medium-to-long term.

The European Commission will soon publish a set of best practice guidelines for the regulation of the sharing economy. The purpose is to support the growth of this emerging sector and also to address any regulatory imbalances that have emerged across Europe in the context of the single market. The guidance will also outline how existing EU regulations should be applied to the sharing economy and consider international best practice. While there are many silos to the sharing economy that will need separate investigation, this article focuses on a key, growing sector – short-term accommodation rentals – and identifies a set of principles that the Commission should consider including in its guidelines.

In most parts of the world, the Millennial Generation has more personal and economic freedom than any which preceded it, but is also facing a squeeze on wealth and assets not experienced in the last 70 years. The UK Government’s Social Mobility and Child Poverty Commission considers that social mobility is in danger of going into reverse in some areas of the UK, and that inequality of assets between generations could worsen matters. 

Referendums are transformative events. Governments may come and go, but a decision to stay in or leave an economic union like the EU is an irrevocable judgement on the nation’s destiny – the most important decision in the lifetimes of voters in the UK. The implications will affect everything from the regulation of the air we breathe to the pensions we invest in. For the financial services sector, the general investment climate in the UK, as well as the contours of central bank policy on the equity banks must retain as capital buffers will be shaped by the outcome on June 23.

The world of financial services is changing fast. The implications of blockchain technology or decentralised ledgers may not yet be a hot kitchen table topic but has the potential to utterly change the worlds of banking, insurance, asset management, and access to finance. In short, it could transform the economy around us. Though the US remains the largest base for investment in FinTech companies developing peer to peer finance and smart payment mechanisms with over $12bn investment in FinTech startups in 2015, more than doubling year on year growth, the UK is the fastest growing global market. With over £3.5bn annual investment in the sector in the UK, it is Europe’s FinTech leader over competition from Paris and Frankfurt.

2015 was a significant year for climate and energy policy and markets: from the momentous Paris agreement to Obama’s continuing push on the Clean Power Plan; from the new British Government’s fresh (and controversial) energy approach to, at last, some stability for the EU Emissions Trading System (ETS), which may have real implications for the longer-term.

The ways and means in which regulation is developed and implemented in the internet age have changed. Regulation across the globe can only follow the rapid expansion of new innovation and business models in, for example, online short-term rentals or car-sharing platforms. There is a continuing trend towards companies developing an idea and going to the market with it fast, with the result that regulation is so far behind it must adapt to the new business environment.

According to recent research by management consultancy A.T. Kearney, the global market for 3D printing is set to grow from $4.5 billion today to $17.2 billion by 2020. With this rapid growth will come added scrutiny from policy makers and regulators. To support its long term growth, and for the industry to fulfil its remarkable potential, a supportive regulatory and policy framework will be critical. To help build this framework, and to put in place policies that will stimulate industry growth and accelerate the uptake of 3D printing technology across the economy, it will be imperative for industry associations to play their part and to engage with key policy makers and regulators.

Like many growing sectors in the sharing and on-demand economy, meal-sharing platforms are changing how individuals interact and consume. Innovative businesses are providing alternative catering services, often with a community or social focus, that disrupt the traditional choice between restaurants, takeaways and home-cooking.

Politicians have shown they are serious - to achieve a positive outcome, the negotiators need to do the same.

For those not acquainted with the international negotiations on climate change - perhaps even more so for those who have that first-hand experience - they are at best an irritant, at worst a pointless relevance. Since the UNFCCC^[1] process began in the early 1990s after the international community agreed that “dangerous” climate change should be addressed, negotiators have gathered year after year in different parts of the world to discuss how the international community can take action to mitigate the climate problem and how the most seriously affected regions (usually in poorer countries) can adapt to the changes brought about by the steady increase in atmospheric and sea temperatures.

The technology sector has rightly become a source of optimism for all UK politicians in recent years. Rapid growth, job creation and sustained investment have become the norm. Recently published statistics from Tech City UK in its Tech Nation report indicate that digital job growth in the UK will outperform all other occupation categories by 2020. In addition, 1.46 million people - 7.5% of the entire UK workforce - are already employed in the digital industries. Importantly, the report found that 74% of digital companies in the UK operate outside of London, with significant clusters of activity in areas such as Greater Manchester, Brighton and Hove, Belfast and South Wales. The supply side is clearly getting stronger with the presence of not just a thriving tech start-up scene, but also a significant number of established and global tech players operating, and investing, across the UK. On the flip side, the demand side is becoming more demanding. Businesses and consumers increasingly expect digital, and not analogue, to be the default. This, of course, is both a great challenge and opportunity for the sector.

In Lima, at the beginning of this week, after two weeks of the usual tortuous negotiations, the 196 parties to the UN Framework Convention on Climate Change (UNFCCC) emerged with the Lima Call for Climate Action. This sets out the main priority issues for the parties in relation to the landmark COP 21 in Paris in December 2015 - the deadline for an international agreement on climate change - and attaches a 39-page document (a “non-paper”) containing various options for different elements of  a draft negotiating text.

This note analyses Lima’s outcomes and the prospects for an international climate agreement in Paris 12 months away.