But supply chain deforestation threatens to undermine vast market potential for nature-based climate solutions, PRI warns
Corporate demand for carbon removal and offsetting will establish forests as a major new asset class that could generate $800bn annually for investors by mid-century, according to the UN’s Principles for Responsible Investment (PRI).
The forest finance market, historically small and managed by the public sector, is set to balloon into a trillion-dollar market over the coming decades as a growing number of corporates make investments in afforestation and reforestation projects that help them meet their net zero goals, according to PRI research today.
The research – which forms part of a new guide to negative emissions and land-use released by the PRI today – predicts the value of assets in the nature-based offsets market could swell to “well over” $1.2tr by mid-century, a figure that even outstrips the current total market capitalisation of oil and gas majors.
Major forest-related climate commitments from some of the world’s largest companies – including Shell, BP, Total, Apple, Microsoft and Amazon – highlight how corporate net zero agendas are already turbocharging demand for carbon credits from nature-based climate solutions, it notes.
Yet even prior to the explosion of net zero commitments from companies over the past 18 months, the value of forestry and land-use CO2 credits had been growing. The value of such credits traded in the voluntary offset market tripled to $172m between 2017 and 2018, while the share of forestry and land-use related offsets grew from 52 to 64 per cent of the total voluntary market, it notes.
But while reforestation and afforestation have emerged the earliest feasible negative-emissions technology investment opportunity for companies looking to offset their carbon, the report also notes that technological solutions could also grow to be a hundred-billion-dollar market. Direct air carbon capture, use and storage (DACCS) and bioenergy with carbon capture and storage (BECCS) technologies could generate a further $625bn by 2050, it estimates.
Fiona Reynolds, chief executive of UN PRI, urged investors to take steps in the near-term to take advantage of investment opportunities in the bourgeoning forest market. “Policy and business momentum have now advanced to a critical mass for forests to begin emerging as a new asset class,” she said. “Investors can act now to unlock investment opportunities and to take an increasingly leading role in financing.”
It follows a number of high-profile investments in nature-based climate solutions from major corporates over the past year. Shell has invested in projects geared at planting five million trees in the Netherlands and regenerating a 800 hectare forest in Australia; BP is protecting a 40,000 hectare forest in Zambia; Apple is protecting a 11,000 hectare forest in Columbia; and Amazon plans to spend $10m on restoring 1.6 million hectares of US forest, according to the report.
However, the PRI warns that for investors to take advantage of the burgeoning market, they must take an active role in tackling deforestation, which not only harms the climate but constrains the total investible nature-based solutions market. Rates of deforestation have doubled during the pandemic, it notes, and as such investors must take steps to end investments in companies with deforestation in their supply chains.
“Afforestation activities are the most viable first move, but to ensure success actors must simultaneously focus on ending deforestation,” Reynolds said, adding that global forest laws need to be vigorously enforced and tightened.
The guide urges investors to take a stand in promoting sustainability standards for BECCS, warning that overreliance on the negative-emissions technology will push the world to its planetary boundaries on water and land availability. It also urges investors to promote a global standard for nature-based offset market.
“With more and more companies setting net zero targets, investors also need greater transparency about the negative emission technologies businesses will rely on to get there,” Reynolds added.
Elsewhere, the analysis highlights a number of emerging business models as holding the most promise for facilitating private investment in forest finance, ranging from green bonds, forest insurance provision, carbon off-taker guarantees, sustainable farming agreements and carbon farming agreements.
Distressed asset purchases – where investors buy and restore deforested or degraded public and private land to benefit from the carbon stock it produces – and a ‘stewardship model’ where an investor leases deforested or degraded land, are also included in the shortlist.
Allison Spector, director of sustainability at global investment manager Nuveen mused that private investors could “open the door” for major forest-related investments worldwide that could help companies meet their net zero targets and steer a Paris-aligned future.
“We believe there is a powerful role for forest-based natural climate solutions,” she said. “Yet the feasibility of implementing these strategies across the vast forestlands of the world is yet to be demonstrated and is predicated on an end to deforestation.”
Original Source: businessgreen.com
Alphabet’s health unit Verily is starting a new subsidiary dedicated to stop-loss insurance.
Original Source: cnbc.com
The global Covid-19 pandemic has impacted us in ways that we could not have imagined. With countries going under lockdown, businesses and entrepreneurs have been among the worst hit. It was inevitable that the global markets would also follow suit. The Sensex, which peaked at 42,273.87 points in February 2020, crashed over 38 percent by March 23 to 25,638.90 points, making it one of the fastest crashes in stock market history, even worse than the 2008 market crash. While existing investors will feel the pinch, this could be a great opportunity for first-time investors. The pandemic has also resulted in a significant increase in mobile trading.
5paisa.com, which recently became the first Indian fintech firm to go public, has been supporting its investors by focusing on customer-centricity; innovation; expansion to Tier 2 and 3 cities; and using technology to serve customers looking for a broker-free and secure platform. The platform currently boasts a daily turnover of over Rs 30,000 crore, over 450,000 clients, over 3.5 million downloads, over Rs 1,000 core in Assets under Management and more than Rs 500 crore in Market Capitalisation.
As part of YourStory’s new series, ‘Money Matters with Shradha Sharma’, we talk to experts, entrepreneurs, and investors for insights on investment opportunities, savings, spendings, and more. In this episode, YourStory Founder and CEO Shradha Sharma was joined by 5paisa.com Founder and CEO, Prakarsh Gagdani, who spoke about the changing face of broking, the new-age investor, and tapping into unchartered markets. Here are some of the highlights from that session.
Investment grew despite the dip in the market
Prakarsh says that they noticed some very surprising trends following the pandemic. Despite the market not being favourable for nearly a year-and-a-half, retail investors were still coming to market and showing interest in Systematic Investment Plans (SIP) and mutual funds were booming. After going public, 5paisa was optimistic about retail investors coming. “But suddenly the COVID-19 outbreak happened and we thought interest would fade. But we saw a completely reverse trend. The markets were going down, but people started approaching stocks at twice the speed.” He adds that March, April, May, and June have been among the best in terms of people coming to capital markets and the highest number of Demat accounts were opened in the months of March and April.
With people spending less during the lockdown, and the future being uncertain, Prakarsh says that there has been a huge shift in the mindset of the investor. “That's why they're coming more towards investment. It's a very healthy trend, and a very good trend, which I feel that it will continue for a long time,” he says.
Catering to first-time investors
“A lot of our investors are first-timers. So they come with basic queries about how to transfer funds and what documents to give,” says Prakarsh. To address these queries, 5paisa.com has created an instructional video in Hindi that they share with their introductory email. “Video consumption is high. So, we focused our entire energies on building our video inventory, training, and imparting process knowledge to people. Our YouTube channel has more than 1.1 lakh subscribers, one of the highest in the industry. We have five to six million views a month on these videos. We decided to make these videos in Hindi from the start so that subscribers from the Hindi belt should not face any barriers,” he says.
When it comes to giving investment advice, Parkarsh says, “Let me state my disclaimer that I am no expert in advising, so please ask a financial advisor.” He says a few sectors like anything agri-related are logical choices because, “People don't stop eating. In fact, they may be eating more since they are stuck at home.” Fertiliser, which is an allied sector, private mobility, oil and natural gas and pharma are all sectors that Parkarsh believes are likely to see traction.
Exploring new avenues
5paisa.com recently entered the peer-to-peer lending space. “This is at a very nascent stage in India. However, lending itself is age-old in India. There are businesses that require short-term loans. There are people who need three-month, six-month, one-year loans. On the other hand, there are people who want to give money. I mean, if you talk to any business guy, he must have lent money to someone as a short-term loan at some point. The entire peer-to-peer lending platform makes it organised and under the purview of the regulators, which is very stringent in India,” says Parkarsh. He acknowledges that this is a difficult time, and people are currently loan-averse. “But I think in some time it might change because the moment we go back to our normal lives, the requirement of money will come. I'm pretty optimistic about this business, and we're promoting it internally with our customers and externally as well,” he says.
5paisa.com’s objective has always been on financial products that can be digitally served end-to-end and doesn't require any human intervention or paperwork. “We started with equities, then we had mutual funds, personal loans, and now peer to peer lending. We sell gold and health insurance. Our energies are focussed on equities, which is seeing a great momentum,” says Parkarsh.
The future of Fintech
Parkarsh believes that most of the disruption in Fintech is happening in the payment space along with digital lending, banking and broking. “But because it is highly regulated, they needed to become an intermediary to come into Fintech. One interesting trend is neo-banking. There are players who are not full-service banks and or registered banks, but offering services. I think that's an interesting space. Secondly, how do you get international investment in India? It's tedious and it's highly regulated. But I think that's an interesting space,” he say
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Original Source: yourstory.com
Regional language social media company ShareChat is laying off 101 employees amid market uncertainties due to the COVID-19 pandemic.
In an email to employees, the Twitter-backed platform outlined steps it is taking to "become leaner and position the company better for the future".
"We would be saying goodbye to 101 of our ShareChatwasis today…This is a very tough call for us. I hope you understand that we had to do it for the organisation to sustain and see it through to the other side of this pandemic," Ankush Sachdeva, co-founder and CEO of ShareChat, said.Also ReadOla culls 1,400 jobs after revenue slumped 95 pc following coronavirus pandemic
In the past few weeks, a number of tech-led businesses like Uber, Zomato, and Swiggy have announced layoffs as the COVID-19 pandemic and lockdown dried up demand and ravaged businesses.
On Wednesday, cab aggregator Ola said it is laying off 1,400 staff from rides, financial services, and food business as revenues declined by 95 percent in the last two months due to the coronavirus pandemic.
When contacted, ShareChat said the global pandemic – along with various local market uncertainties – have had an impact on its business plans.
"This has pushed us towards certain tough decisions, including a revised leaner structure while we continue to grow. We've had to let go 101 of our employees who've been part of our start-up journey. This was not an easy decision to make," it added.
Sachdeva, in his mail, noted that he believed the ad market would remain unpredictable this year.
"We are streamlining our revenue teams to these new expectations yet will keep working towards building the necessary technology infrastructure," he said.
The five-year old company has relooked at the requirement of physical office spaces, and would continue partially remote working at all times in the future.
"We have worked aggressively on reducing our server costs," he said.
The impacted employees will have the option to go on a 'garden leave' for two months with 100 percent pay or opt for four months with 50 percent pay while utilising the period to look for a new job.
During this period, the associates will continue to be on the company's payrolls so that there isn't any employment gap.
The company will also provide a one-month ex-gratia for every year that the employee has been engaged with the firm.
The impacted associates will continue to be covered by the company's health insurance policy until the end of 2020.
Also, the options that vest by end of the year will continue to be retained by the employees who have been laid off.
According to a survey by industry body Nasscom, about 90 percent startups said they are facing a decline in revenues, and about 30-40 percent indicated temporarily halting their operations or in the process of closing down.
About 70 percent startups surveyed said they have a cash runway of fewer than three months, the most affected being the early stage and mid-stage startups.
With businesses seeing significant impact due to the COVID-19 pandemic, many startups have frozen hiring, slashed salaries and laid off people.
(Edited by Megha Reddy)
How has the coronavirus outbreak disrupted your life? And how are you dealing with it? Write to us or send us a video with subject line 'Coronavirus Disruption' to [email protected]
Original Source: yourstory.com