Author: itsupport

The democratisation of wealth management in Africa

Posted on by itsupport

World Finance gets the low-down on the future of the private wealth industry in Nigeria, as FirstBank wades deep into hyper-powered tech, artificial intelligence, and highly dispersed client ambitions. What are the risks and responsibilities – and how are these safeguarded for this demanding, switched-on client base?

The high-net-worth client business catering to Africa’s growing affluent population is super-competitive. What challenges does this pose for FirstBank, and how are they met head-on?
Africa is home to 135,200 high-net-worth individuals (with $1m or more in investable assets), 312 centi-millionaires ($100m in investable assets or more), and 21 billionaires. Summed up, the bank is faced with the challenges of anticipating and responding to the changing investment and wealth management needs of well-educated and well-travelled individuals who routinely benchmark the bank’s products and services against those of offshore service providers.

So how is this demand met?
We combine a mix of highly personalised service delivery and technology to enhance the client’s experiences with us. We seek to attract the affluent next gen and new money – both to sustain business growth and leadership in the private wealth industry. We leverage technology as an enabler but not to replace humans wholly in the client experience.

What do clients want, in your view?
Speed and competence in service delivery. Our approach has been to focus on the client’s journey, and to seek the most creative ways to make their customer experiences both more personable and rewarding at the right cost. This is achieved by providing highly competent support and leveraging the right technology and tools.

What of political stability, crucial for client risk confidence?
Political instability and governance issues can undermine confidence in the banking system. Affluent individuals can always invest in other jurisdictions to safeguard their wealth.

So how does FirstBank negotiate these tensions?
Political instability anywhere – either remotely or directly – shapes the responses of the players in any market. Private wealth organisations in Africa are no exceptions. These tensions guide how we organise ourselves and also respond to changes in the market.

Is it about a different attitude?
Tensions pose a serious challenge to developing sustainable business models. At FirstBank Private Banking and Wealth Management, we see opportunities where others may focus on challenges. We do this by anticipating high impact changes that could affect personal wealth, and by providing our clients with seamless investment and wealth management solutions to protect and grow their wealth. FirstBank also maintains a presence in the UK providing options for those with offshore banking, mortgage and asset-based lending, and investment needs. A well-trained private banking team sits in this jurisdiction and caters to the needs of these clients.

Where is the Nigerian economy seeing most entrepreneurial growth and potential – and how does FirstBank frame itself as a trusted player in this space?
In the private banking and wealth management business specifically, there are new growth areas in tech and innovation. More private equity firms are showing greater interest in our markets now. Inflows to start-up and tech firms were estimated at $4.5bn in 2023 though this was a decline on the 2022 figures in response to some of the headwinds experienced in some African markets. This sector, however, continues to remain very relevant.

Due to Nigeria’s oil exports, fluctuating oil prices and its impact on the Nigerian Naira, currency volatility is part of life. How does FirstBank manage guidance to clients?
The private banking and wealth management business seeks new growth areas and in turn, more contemporary sources of wealth outside the traditional resource driven areas. We help our clients articulate long-term financial goals and offer a range of investment, wealth management and lifestyle interventions to support these goals. We encourage our clients to adopt risk-mitigating strategies in building investment portfolios to ensure the sustainability of their wealth, while leveraging a range of solutions like mutual funds, fixed income (investment) as well as estate planning (fiduciary) working conjointly with proprietary product partners in FirstBank and our holding companies.

What is the FirstBank view of the Nigerian economy for the next three to five years?
In the recent past we have seen several policy changes aimed at placing the economy on track. With a 600 basis points upward adjustment in the monetary policy rate and in turn higher lending rates, there is guided depreciation of the local currency with a focus on promoting price discovery and stability in the value of the currency. These changes have come with challenges and especially for clients who are constrained to deal with rising inflation (33.69 percent) as of April 2024. It is expected the various government interventions would impact the economy positively with stronger outcomes and a high degree of stability in the next three to five years.

African banks need to offer investment options that match changing values without compromising on profitability. How is this managed?
By being more agile and less reactive. Recognising new growth opportunities while simultaneously protecting the core of their businesses. A good example is the adoption of a well-defined digital wealth management application to cater to a wider and potentially profitable upper affluent base, and to attract the millennial and Gen X future wealth cohorts.

Your competitors aren’t just banks now but fintech and IT companies. With so much blurring of lines, how do you plot a long-term strategy?
Africa is home to seven unicorns – companies with a valuation of more than $1bn. Our long-term strategy is to leverage the distinct advantage of our own franchise – a deep knowledge of the market backed by our long and enviable history, stretching back more than 130 years. We offer solid competence to our private banking and wealth management, institutional and commercial clients. The bank continues to invest heavily in technology as we target more opportunities in adjacent areas for growth.

African countries often compete to attract foreign direct investment (FDI). A favourable tax regime can be an incentive for foreign investors, especially for tech entrepreneurs. Does FirstBank want to see change for clients here?
The government has a policy framework around this with several designated free trade zones listed across the country offering varying incentives to companies ranging from tax breaks to preferential access to regulatory interventions and more.

We have seen several policy changes aimed at placing the economy on track

Tech privacy makes headlines daily. What security and confidentiality safeguards for client peace of mind are in place?
The private wealth business model recognises the high need for confidentiality as distinct from secrecy which may exist outside of regulatory ambits. Chinese walls are built around sensitive data (static and non-static) leveraging technology. We invest in the training of personnel for an in-depth appreciation of the needs and requirements for confidentiality for a highly personalised private banking and wealth management business.

What about corporate governance structure and practices, in relation to board composition?
The bank has an internal governance framework built around best practices and regulatory standards. There is a significant increase at board level understanding of the HNWI and ultra-HNWI business. This is evident in the stronger levels of advocacy and a heightened interest of its role in our overall enterprise strategy.

Are African regulators moving fast enough to support the future digital landscape changes? Is it always a game of catch-up?
Yes. Most of the regulators in the key markets in Africa have a clear stance and view of the role of digitisation. However, there is always room for improvement.

What are the tensions between strong corporate governance, profitability and long-term client trust?
The bank would never sacrifice the trust of its long-term clients or indeed its corporate integrity in the pursuit of profit. We are absolutely woven into the fabric of society in the markets we operate.

The balance of taxes and incentives are particularly important in the African banking landscape. Has the government got the mix right?
These are choices dictated by practicalities and the needs of the sovereign. Nigeria has and would continue to pursue an optimal mix of attracting offshore investors while also ensuring the viability of its local industries.

What can the Western financial services industry learn from African players? Where are African players clearly ahead, do you feel?
Resilience. Banking is a business of managing risks and less about avoiding risks. The ability to deliver despite the intervening uncertainties.

Which financial services companies do you admire most, regardless of jurisdiction?
Other than FirstBank, personally it would be the DBS (Development Bank of Singapore). A practical example of a financial institution that surmounted deep-seated challenges to transition from a conservatively traditional bank to a nimble and opportunity-seeking business reputed to be Asia’s safest bank.

Improve your carbon footprint with packaging for tomorrow

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The packaging of the future will be environmentally friendly, lighter, more efficient, and driven by technological advancements. While smart packaging and the Internet of Things (IoT) offer tremendous potential for the future of packaging, the development of sustainable and eco-friendly packaging materials that can be reintegrated into existing waste cycles and are easily compostable is most important.

PAPACKS is now a leading manufacturer of moulded fibre packaging solutions, setting the standard in Europe for sustainable, fibre-based packaging. With production capacities of over 600 million units annually, we are leaders in both production volume and innovation, boasting an impressive array of over 75 patent families, 30 awards, and more than 10 years of continuous development and research. With a focus on climate protection and the conservation of natural resources, we emphasise the use of renewable raw materials and production processes, especially virgin fibres and industrial hemp. This approach enables us to make a significant contribution to reducing the CO₂ footprint, offering tangible benefits to clients and the environment alike.

By investing in sustainable packaging technologies, we can transform the packaging industry to benefit our planet

Following circular design principles, we consider all life stages of packaging – from development to disposal. A key aspect is choosing raw materials that minimise the ecological footprint, like our moulded fibre technology, which is more sustainable than traditional materials and easily recyclable or compostable. We continuously improve our packaging to reduce its ecological impact and meet circular economy demands.

Moulded fibers
Biodegradable and compostable materials are crucial for sustainable packaging, breaking down naturally without causing environmental harm. Compostable materials, especially useful for food packaging, can be fully converted into compost. Moulded pulp from renewable sources like cellulose or hemp fibres offers a sustainable, cost-effective alternative to traditional packaging, integrating easily into recycling systems.

Moulded pulp packaging is competitive in cost and performance, often providing better protection, durability, and user-friendliness. It is environmentally cost-effective, offers excellent shock absorption, is lightweight, and can be produced in various shapes and sizes.

At PAPACKS, we use compostable tree or hemp fibres for our moulded fibre technology. Our virgin tree cellulose fibre, sourced from sustainably managed forests, is high-quality but resource-intensive. Conversely, industrial hemp is a highly sustainable alternative, growing faster, using less water, and absorbing four times more CO₂ than trees. Hemp fibres match tree fibres in performance, making them an efficient, eco-friendly packaging choice that helps offset CO₂ emissions.

Avoiding rising costs and shortages
The packaging industry faces shortages of virgin fibre raw materials, and a shift to paper-like packaging will exacerbate this scarcity, driving up prices. This will increase production costs, which companies will likely pass on to customers, leading to higher consumer prices – especially problematic for industries with thin profit margins. To mitigate future cost increases due to shortages, PAPACKS, in partnership with the European Material Bank (EMBA), has planted over 2,000 hectares of industrial hemp in Ukraine. This strategic move ensures a self-sufficient supply of high-quality virgin fibre, insulating us from market fluctuations.

Investing in the future of packaging is economically crucial, and companies that do not invest will fall behind. Sustainable, innovative packaging solutions are essential to addressing plastic and waste issues and will gain industrial adoption rapidly.

As the founder and CEO of PAPACKS, I am also the president of the European Moulded Pulp Producer Association (EMPPA). In this role, I aim to unite the moulded pulp industry, promoting innovation and political awareness to support new legislation like the EPS ban. By investing in sustainable packaging technologies, we can transform the packaging industry to benefit our planet, not just corporate marketing. Further information can be found at www.papacks.com

New pathways to trading success

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Forex trading – the act of buying and selling global currencies – is thought to date back as far as the Babylonian period, some 4,000 years ago. From its humble barter-based beginnings, the forex market has grown to become one of the biggest and most liquid of all financial markets, with a daily trading volume of $6.6bn. The dawn of the digital age has made forex trading more accessible than ever before. In the pre-Internet era, trading was something of an exclusive and limited club, where social connections and deep pockets were prerequisites to investing. Now, an internet connection is all that is needed to start trading. In just a few short clicks, traders can check real-time currency rates and view how their investments are performing. Online brokers have helped to further open the world of trading to a wider community, by providing user-friendly platforms on which to trade, along with educational content and trading tips for beginners and experts alike.

With such a wealth of information at new traders’ fingertips, investing is becoming more democratic and more diverse. But as Artificial Intelligence (AI) and algorithmic trading begin to rapidly reshape this fast-paced and changeable market, finding a path to profit has never been so complex. In these turbulent times, the right brokerage firm can make all the difference to a trader’s investment journey.

Seizing new opportunities
The forex market is experiencing a period of considerable change. Advances in AI technologies are transforming the industry as we know it, while a post-pandemic influx of novice traders has seen the market become an ever more competitive place for established brokers. Increasingly, brokerage firms are looking to set themselves apart from other players in the online trading space, offering enhanced, mobile-friendly trading platforms, expert educational resources and attractive partnership programmes.

“FBS has been in the market since 2009, and we have witnessed many trends over these past 15 years,” Diego Lima, Partnership Managers Team Lead at FBS, told World Finance. “Brokers should provide a sense of confidence on every step – and that is particularly important in the current climate.”

For more experienced traders, some of the most valuable advice a broker can share is on new ways to potentially increase their profits – and some of these opportunities don’t even involve trading, at all. In recent years, Introducing Broker (IB) programmes have become a popular way for traders to generate additional income. In an IB programme, an individual acts as an intermediary – an ‘IB’ – between a broker and other traders, introducing potential clients to the brokerage firm in exchange for a commission.

This kind of collaborative venture can prove lucrative for clients looking to boost their income stream, as it allows traders to earn money outside of their direct investments. The client, or ‘IB,’ promotes their broker’s services to potential new traders, and once the secondary client signs up with the broker, the IB receives a commission on the trades that they make from that point onward.

“The FBS IB programme presents a compelling opportunity for individuals looking to earn money in the forex market without actively trading,” Lima explained. “With its competitive commission rates, comprehensive support tools and commitment to partner success, FBS stands out as a premier choice for those seeking to capitalise on the lucrative world of forex IB partnerships.”

A learning curve
While Introducing Broker programmes may be best suited to more experienced traders, leading broker FBS also boasts an impressive offer for novice investors. Forex is a competitive and periodically volatile market, and new entrants can sometimes find that their self-taught knowledge only takes them so far. For those who are just starting out on their trading journey, expert advice and educational training can prove invaluable.

This is particularly pertinent given the rapid rise of ‘finfluencers’ and other forms of alternative financial advice that circulate on social media. While there is a wealth of information to be found online, it can be difficult to know which resources are truly trustworthy. In fact, a recent report carried out by stock research platform WallStreetZen found that over 60 percent of TikTok videos using the hashtag #StockTok contain inaccurate or misleading information. In this climate of widespread misinformation, advice from experienced financial professionals can make all the difference to those new to online trading.

AI can be a powerful tool for traders looking to stay competitive in a fast-moving market

“We offer a variety of educational resources on different online platforms to empower our traders,” Lima explains. “Beginners can make use of our forex guidebook, which offers a crash course in trading essentials. We also continually refresh our website with the latest market analytics and websites, and we host a series of educational webinars on our YouTube channel, with insights from real, experienced traders.”

Access to clear and comprehensive information can help new and inexperienced traders to make more informed, profitable decisions when it comes to buying and selling. But even when armed with practical advice, new traders can still struggle to enter and navigate fast-paced financial markets. That is where demo accounts can help – by providing a safe space for novice traders to hone their skills.

When using a demo account, traders use virtual capital rather than their own, real money. This gives new clients a risk-free opportunity to refine their trading skills and strategies, and gain confidence in their ability.

“Demo accounts are connected to a live trading platform, and use real-time market data,” explained Lima. “By using a demo account, traders can dive into trading and test their knowledge without risking real money. Then, once traders are familiar with the basics and feel confident enough to place an order, they can easily switch from a demo account to a standard account on our app or through our website.”

Seasoned traders, too, can benefit from exploring new options and strategies on a demo account. Continuous learning is key to success in any industry, and trading is certainly no different. In particular, establishing stop-loss and take-profit levels can prove challenging to new and experienced traders alike, with individuals often unsure on where to place their limits. Demo accounts allow traders to explore the levels that may work best for them, and to refine their risk management approach.

By taking the time to self-assess, reflect and strategise using a demo account, traders of all ability levels can boost their skills, and consequently, their likelihood of succeeding when live trading.

A fast-changing market
The forex market is a dynamic, ever-changing landscape. It has undergone many transformations in the digital age, but perhaps none so profound as the AI-powered evolution that it is experiencing today. When used skillfully, AI can be a powerful tool for traders looking to stay competitive in a fast-moving market. But it also poses its own unique challenges for traders, brokers and regulators alike, with experienced professionals rushing to keep pace with the changes happening in the industry.

Machine learning, a subset of AI, uses algorithms to analyse extensive amounts of data. In a matter of seconds, machine learning algorithms can assess vast quantities of financial information, identify opportunities and even autonomously carry out buy and sell orders. Elsewhere, so-called AI ‘trading bots’ can be programmed to manage every aspect of trading – giving traders the option to let AI make investment decisions on their behalf, if they so wish.

“In the years since FBS has been in the forex market, one of the most profound changes we have witnessed has been the steady increase in instant transaction solutions like trading bots,” said Lima. “Nowadays, around 90 percent of forex interactions are being performed without any human interaction at all.”

There are some inevitable limits to trading bots. It goes without saying that they can’t get every investment decision right, and they also require regular updates and adjustments in order to run smoothly and successfully. There is also the risk that a bot has been trained on flawed or low-quality datasets, resulting in poor predictions. Some users may also feel wary of handing over their investment divisions to an automated bot, especially when there may be significant sums of money on the line. While these are all reasonable concerns, such apprehension will ultimately do little to slow the growing dominance of AI in the world of trading. Amid such far-reaching changes, trust between traders and brokers has never been quite so important. In uncertain and unpredictable times, quality customer service can reassure traders and empower them to make the right decisions for their unique financial goals. With more than 27 million active traders, FBS has emerged as one of the market’s most trusted brokers, offering well-established client support that is available around the clock. “Traders can expect a reply in less than a minute after sending their request or schedule a call-back,” explained Lima. “The comfort and satisfaction of our traders is our priority.”

The next few years will undoubtedly bring further changes to the forex market, as developments in AI and algorithmic trading continue to transform the way that we buy, trade and strategise. Brokers and traders will need to evolve with the times, and for those that do, the rewards may well be significant.

Centennial legacy, magnificent transformation

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The reinvention of a long-established Taiwanese government-owned bank, facing challenges in a tough business environment, would likely involve innovative strategies to adapt and thrive. Embracing digital transformation to stay competitive in the rapidly evolving financial landscape through, for instance, more investments in digital banking platforms, mobile apps and online services would be one of the strategies a bank might employ.

Other challenges include the diversification of services to offer a broader range of financial solutions, which could help mitigate risks associated with fluctuations in specific markets and industries while tapping into new revenue streams, as well as the incorporation of sustainability and social responsibility into business practices to attract socially conscious customers and investors. Social responsibility is gaining significant traction in the financial landscape, contributing positively to society and the environment.

By aligning with global sustainability goals and demonstrating a commitment to corporate social responsibility, the bank can enhance its reputation and differentiate itself in the market. These are the key strategies put in place by the Mega International Commercial Bank/Mega Bank, which came into being as a result of the merger of the International Commercial Bank of China and Chiao Tung Bank, effective on August 21, 2006.

Formerly known as the Bank of China (later renamed as the International Commercial Bank of China) and the Chiao Tung Bank during the late Qing Dynasty and the early Republic of China, it has made significant contributions to the internationalised deployment of Taiwanese manufacturers and enterprises, industrial upgrades, and activated economic development through its global presence and extensive remittance network. Presently, it plays a leading role in Taiwan’s banking industry including international trade and foreign exchange operations, international syndicated loans, project financing, and start-up and entrepreneurial investments, among other things.

Mega Bank has been cultivating a comprehensive culture of compliance

Leveraging the advantage of its global presence and correspondent banks, the bank has made immense contributions in supporting domestic companies to expand internationally, upgrading industries, and promoting economic developments. In recent years, by following in the footsteps of peers in advanced countries, the bank has dedicated all efforts to optimising corporate governance and promoting sustainable development.

Mega Bank is headquartered in Taiwan, with overseas operations mainly in Asian countries. The group is focused on developing emerging markets and countries in Southeast Asia, and as of the end of 2023, has 108 branches in Taiwan and 39 overseas operations in 18 countries/regions. Among the 39 overseas locations, Mega Bank has 31 overseas branches and sub-branches, three overseas representative offices and marketing offices, and five subsidiaries and branches in Thailand.

Paul C. D. Lei, Chairman, Mega Bank

Chairman Paul C. D. Lei holds a Cornell Ph.D. in Economics and took office in June 2023. He told World Finance that Mega Bank cannot rest on its laurels. He expects all employees to adopt a proactive attitude of “facing challenges and embracing changes” to tackle various obstacles, including geopolitical conflicts, escalating inflation, and intensifying competition in the financial landscape.

Lei also outlined three major strategies, which include the implementation of environmental, social and governance (ESG) principles, systems optimisation, and nurturing talents, aiming to lead Mega Bank into another century of glory. Mega Bank also actively develops new financial products and has launched marketing projects to continuously promote business development, to respond to market dynamics, meet customer needs in real time, and adapt to technological and digital financial trends.

Mega Bank also continues to strengthen research and development, deepen various digital financial services, seek cross-industry cooperation opportunities, expand service scope and develop new customers. While Mega Bank is actively investing in digital financial research and development, it has also applied for financial patent protection. As of August 31, 2023, a total of 564 new patents and a total of 116 invention patents have been approved by the Intellectual Property Bureau of the Ministry of Economic Affairs, for a total of 680, which ranks it first among public stock banks.

Committing to net zero
Mega Bank places great emphasis on global climate change and carbon reduction initiatives. It has set targets aligned with the Science-Based Targets initiative (SBTi) and Taiwan’s 2050 Net Zero Emissions Goals. It not only aims to reduce 25 percent of greenhouse gas emissions by 2030 but also to achieve net zero emissions by 2050.

It has planned an ‘Environmental Sustainability Pathway’ by implementing systematic carbon reduction measures and introducing various international ISO standards and green building solutions to enhance its operational environmental and energy management efficiency. Currently, three of its self-owned office buildings have obtained dual certifications for ISO 14001 environmental management and ISO 50001 energy management systems.

The bank has made immense contributions in supporting domestic companies to expand internationally

Moreover, Mega Bank incorporates sustainable business concepts into financial product design, as well as investment and financing approval systems to encourage Taiwanese enterprises to prioritise and implement ESG practices. In line with the Financial Supervisory Commission’s ‘Green Finance 3.0’ policy, it offers various sustainable-related financial products and services, effectively guiding its customers towards low-carbon transitions. For example, it provides venture capital loan projects focusing on renewable energy and job creation, consumer credit products for green buildings and maternity support, issuance of green credit cards, and investment in green energy technology industries amplifying Mega Bank’s core business impact on positive sustainable finance.

System optimisation
In response to the rapid changes of the digital era and challenges of outdated core host system architectures, Mega Bank has initiated a five-year core host system transformation plan from 2021. Starting from the perspectives of users/customers, employees, and senior bank management, it has gradually adjusted the traditional ‘big core and small peripheral’ system architecture to a ‘lightweight core and micro-services’ architecture.

Meanwhile, it has introduced key middleware components, including applications, data, reports, and monitoring, to achieve the long-term goal of core host system transformation. This allows front-end services to be applied flexibly and to respond to business needs swiftly, meeting customer demands. Taking the transformation of the consumer finance business as an example, credit loans have been streamlined with an online application platform while ensuring personal data security and privacy protection.

Mega Bank has introduced the Autonomous Use of Personally Related Data (MyData) platform and integrated personal data functions with the bank’s IXML (Financial Electronic Certificate), simplifying the loan approval process with the i-Loan Approval Management system. Leveraging automated preliminary review and data analysis, along with the development of a ‘Loan Value Model Calculator’ for data-driven portfolio evaluation, the bank aims to deliver a satisfying lending experience to its customers.

Talent cultivation
Lei emphasised that employees are the most valuable assets of an enterprise, and a primary aspect of implementing ESG is taking good care of them. Immediately after assuming office, Lei took steps to ensure an immediate increase in employee remuneration and increased meal subsidies and maternity benefits. These measures, which resonated deeply with the employees, show Lei’s commitment to supportive leadership and a positive work environment.

Indeed, Mega Bank is deeply committed to fostering a happy workplace. Apart from offering competitive salaries and benefits, it promotes effective communication channels between labour and management through employee dedication surveys, human rights due diligence investigations, and labour-management meetings. Furthermore, Mega Bank also cares for the physical and mental health of its employees, obtaining ISO 45001 certification for occupational health and safety management systems in 2022.

On the other hand, its employees in this happy enterprise reciprocate with enthusiasm and dedication to their work. In 2023, Mega Bank achieved a post-tax net profit of NT$31bn ($960m), with each employee contributing an average of NT$5.11m ($158,130). The post-tax earnings for the first quarter of 2024 reached NT$9.9bn ($306m). As Mega Bank is a systematically important bank (D-SIBs) in the Coalition of Movers and Shakers on Sustainable Finance, Mega Financial Holding, its parent company, has been selected for inclusion in the ‘TWSE RA Taiwan Employment Creation 99 Index’ and ‘TWSE RAFI Taiwan High Compensation 100 Index’ for many years. With such honourable achievements, it is no surprise that Mega Bank has been rated as Taiwan’s Best Commercial Bank by World Finance magazine for two consecutive years.

However, these are not the most important achievements for Lei. In his vision, Mega Bank should be “a happy Mega Bank for its employees; a friendly Mega Bank for its customers; a profitable Mega Bank for its shareholders; and a sustainable Mega Bank for Taiwan.”

Establishing a compliant corporate culture that balances profitability and risk is crucial for the long-term success and sustainability of any financial institution. In recent years, Mega Bank has been cultivating a comprehensive culture of compliance, balancing short-term profitability, business expansion, and risk management.

Developing clear ethical standards, implementing a comprehensive compliance framework, fostering a culture of compliance from the top down, providing ongoing training and education programmes to ensure that employees have the knowledge and skills necessary to comply with regulations and internal policies, as well as implementing solid risk management practices, are only some of the strategies put in place to ensure a balanced approach that helps to protect the interests of stakeholders while maintaining regulatory compliance and upholding ethical standards.

The implementation of the Global AML and Sanctions Programme aims to enhance the effectiveness and sustainability of the overall anti-money laundering system. With a solid foundation in place, the bank further strengthens its overseas profitability and business development, giving its overseas branches a significant boost.

A look at Mexico’s pensions reform

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On May 1, a major new reform was introduced to Mexico’s pension system, which included the guarantee of a 100 percent replacement rate for pensions of below-the-mean-wage workers in the individual account scheme, with an additional fiscal cost to be initially financed by the creation of the Welfare Pension Fund, WPF (Fondo de Pensiones para el Bienestar). This reform is not an isolated event – the country’s retirement system has very recently undergone several transformations to correct aspects of the defined-contribution scheme while strengthening it.

Previous problems and reforms
The original Mexican pension system of the Mexican Institute of Social Security (IMSS) operated under a defined benefit, pay-as-you-go scheme until 1997, when, prompted by Mexico’s economic and demographic shifts, a significant transformation occurred. That year, Retirement Funds Administrators (Afores) were established, marking the shift to a defined-contribution scheme, with retirement savings through individual accounts managed by the Afores. Subsequently, public sector employees were integrated into the Afore system in 2007 (they contribute to another institute, ISSSTE).

The 1997 and 2007 reforms, although helpful in coping with the rising and unsustainable fiscal costs of pensions, presented several drawbacks in terms of coverage. First, for those who did not remain in the old system, minimum contributory years to gain the right to a pension were raised from 10 to 24, a problem in a country where workers contribute on average only 43 percent of their active life to social security. Additionally, the minimum guaranteed pension (MGP) for those who did qualify for a pension was less than 25 percent of their average wage and very few workers were expected to get a pension above it. When the first generation of the Afore system filed for a pension in 2021, 24 years after the implementation of the scheme, only a few of them were going to actually receive it and they would mostly get the very low MGP.

Facing these immediate problems, the administration of President Andrés Manuel López Obrador introduced two critical reforms. In 2019, the Welfare Pension for Senior Citizens (Pensión para el Bienestar de los Adultos Mayores) was established, providing a non-contributory pension funded by the federal government to all individuals aged 65 and over. Later, a reform to the Afore scheme in 2020 increased mandatory contributions that will gradually rise from 6.5 percent of wages in 2021 to 15 percent in 2030, reduced Afore managing fees by 30 percent to a cap aligned to an international reference, enhanced the MGP, and decreased the number of weeks needed to qualify for a pension (from 750 in 2021, to rise gradually to 1,000 by 2031).

An overview of the new measures
The new pension reform approved this year was also supported by President López Obrador. It intends to further strengthen the system by increasing the pension to equal the last contributory wage to all workers earning a salary lower than the current IMSS average of 16,777 Mexican pesos a month (around $1,000 at the current exchange rate), provided they are subject to the Afore system and are at least 65 years old. If the worker takes an earlier retirement the pension remains unchanged. Additionally, they must fulfill the years of contribution requirement for a pension.

This recent reform is part of an ambitious pension programme of the current federal government administration

The government will ensure this benefit through the so-called Solidary Supplement (complemento solidario), which will be added to the MGP. In Mexico’s pension system, workers save their contributions as well as their employers’ and the government’s into individual retirement accounts managed by Afores. Upon retirement, their monthly pension comes from this saved amount. If the balance is not enough to reach the MGP, the government subsidises their pension as soon as the worker’s savings are insufficient, so that they receive the MGP. Now, with the 2024 reform, the Solidary Supplement will be added to the MGP so that the pension is equal to the last contributory wage.

The Solidary Supplement therefore creates a new fiscal obligation to be financed, precisely, by the WPF, which is set to start with an initial capital of 64bn Mexican pesos (around $3.8bn). The fund will draw on a variety of sources, like proceeds from the liquidation of the National Agricultural Development Fund and real estate revenues generated by the National Fund for Tourism Promotion, among others. One issue that sparked debate in the media is that the WPF will also receive funds managed by the Afores that have not been claimed by the workers or their beneficiaries 10 years after they had the right to them, in cases where those accounts have been inactive for a year.

The new laws of IMSS, ISSSTE and the Institute of the National Housing Fund for Workers previously stated that accounts in such a situation would be disposed of by their corresponding institutions, provided they created a reserve to return the funds to workers or their beneficiaries in case they eventually claimed them. Under the new legislation, those unclaimed accounts will go to the WPF, which will be established by the Ministry of Finance as a public trust fund at Mexico’s Central Bank (Banco de México). The obligation remains to create a reserve to ensure that refunds can be made to workers or their beneficiaries whenever claimed.

Fact check: unravelling speculation
More than a few media outlets and commentators sparked a heated debate at the time of the legislative process by asserting that the new measure implied an unlawful expropriation of workers’ savings by the government. This assertion proved to be false, as the new law clearly establishes that property rights of the workers over the assets are imprescriptible and the reform merely represents a shift in the institution managing them for those who meet the mentioned criteria (it is estimated that the resources to be transferred to the WPF add to less than 0.5 percent of the total managed by the Afores). In other words, unclaimed funds previously managed by social security institutions will now be managed by the WPF, with the same obligation of maintaining a reserve to pay any claims that may arise. In fact, the pre-reform system never failed to return any claimed funds, due to the reserve created; there is no reason to believe that with WPF this would be otherwise.

The benefits of the reform
The number of beneficiaries receiving the Solidary Support Aid is projected to grow from 8,529 individuals in 2024 to approximately 2.7 million by 2050. The amount of the supplementary subsidy each pensioner receives is expected to average 4,592 Mexican pesos per month (around $275). To ensure sustainability, the reform includes a provision for an actuarial review of the funding sources every eight years, enabling adjustments in case the projected figures fall short.

Key takeaways from the pension reform
This recent reform is part of an ambitious pension programme of the current federal government administration, which has showed a stark determination in going the extra mile in retirement benefits.

Complementing the 2019 and 2020 changes with the latest in 2024, the country has created a unique mixed model, which brings about a more inclusive and robust environment: it now has a universal non-contributory pillar which is very important for a labour market characterised by high informality – that is, low density rates of contributions. At the same time, it has reduced the years of contributions required to gain access to a pension, favouring the first generations of workers under the Afore system, who would otherwise fail to even reach a pension.

The country has created a unique mixed model, which brings about a more inclusive and robust environment

Additionally, the reform passed in May 2024 assures that those first generations of workers reaching a pension in the individual-account, defined-contribution system, receive pensions with a 100 percent replacement rate if their wage is below average. In a country like Mexico, where half the population still works under informal schemes, this measure may very well be a missing incentive for more workers to seek formalisation.

Regarding the funding of the reform, the WPF provides a sustainable financial source for at least the next decade. It is a good provision of the law however, to mandate an actuarial assessment and an eventual replenishing through additional sources after eight years of operation. This will allow for adjustments to be made in case they are necessary at that time.

By taking the best elements of both non-contributory and contributory schemes, the new Mexican mixed pension model represents a significant advancement in the labour conditions of the country and, very importantly, it not only preserves but actually strengthens the Afore system. This is very relevant, as besides being an optimal and worker-aligned management system for retirement funds, Afores have an important role in the Mexican economy, currently representing domestic savings equivalent to 20 percent of the country’s GDP. Before the new model, this number was estimated to rise to 35 percent by 2040, but now the estimate is as high as 56 percent of the GDP of that year. This is no doubt good news not only to the workers but also to the financial environment and economic stability of Mexico.

The value and importance of rural development

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At Campo Capital, we are firmly convinced that rural development is crucial for both economic growth and social wellbeing. Our primary objective is to allocate capital into rural areas in South America, a mission we have successfully pursued for over 13 years. Our projects have provided work for hundreds of people in remote areas of Colombia and Peru. As well as improving and investing in the living conditions of local communities, our work positively impacts both the environment and the economy of the regions we work in.

We specialise in the development of agroforestry, forestry, and environmental projects, alongside offering consulting services in these sectors, generating significant environmental and social impacts aligned with the Sustainable Development Goals (SDGs) of Colombia.

In previous years, the Colombian government has included Campo Capital on its list of companies contributing to the achievement of the SDGs in the country, an accolade we are very proud of. Through our investment management strategies and operations we contribute to rural areas and promote climate change mitigation.

In addition to our investment management endeavours, we focus on structuring and executing greenfield projects aimed at delivering substantial environmental and social benefits, in harmony with the SDGs. Through our initiatives, we have efficiently reforested over 11,000 hectares, preserved biodiversity, and improved the quality of life for workers and local communities.

We work with a diverse range of clients at Campo Capital. Our clients include international and local entities such as the Global Green Growth Institute, the International Climate Fund, Mirova Capital, Finagro, the Growth Institute, IICA, Corpocampo NGO and Total Energy, among others. We also collaborate with governmental entities like the British embassy and private companies in the agricultural sector.

Making an impact
Both Campo Capital and its Impact Fund are deeply committed to the achievement of SDGs and we have guided our impact policies towards this target. All of the projects managed by Campo Capital and sourced in the fund’s pipeline are evaluated not only from an economic scope, but also thoroughly from a social and environmental perspective.

From an economic point of view, we aim to help regions with their financial development. For example, our flagship project is called Sustainable Agroforestry in the Orinoquia, which is an area in central Colombia of approximately 7,500 hectares. Our aim was to help with the region’s economic development by commercialising products derived from cocoa and annatto, while also contributing to the environment through reforestation and helping to improve the living conditions of the local communities.

Investing in sustainable practices is essential and its importance cannot be overstated

From an environmental scope, we set important targets and indicators for each project. These include taking into account soil conditions, species to be included in order to increase biodiversity, overall carbon sequestration potential from the project’s different activities, total area impacted by reforestation and restoration activities, and many more.

These indicators are periodically measured to make sure each project advances positively and is aligned with our strategy and objectives. At a time of vast and concerning environmental change, investing in sustainable practices is essential and its importance cannot be overstated.

From a social standpoint, our projects have provided and continue to present stable employment opportunities for rural communities that have historically experienced limited or precarious working conditions. We see this as a vital part of making a positive social and economic contribution to each region. Additionally, we consistently pursue certifications, such as FSC, to validate our commitment to social practices concerning our employees and the local communities.

The next steps for Campo Capital
Campo Capital is positioned to expand its portfolio of operational projects and impact projects that not only offer economic returns but also have social and environmental impacts. We aim to collaborate with large companies interested in contributing to SDGs.

The fund is set to close by 2025, with plans to begin investing in forestry, agroforestry, and environmental projects. Additionally, we intend to continue expanding our portfolio through consultancies to gain further insights into our areas of operation. Looking ahead, Campo Capital is currently innovating and developing a technological package focused on native species of the Amazon. This novel endeavour underscores our commitment to strengthening our knowledge base and replicating our success in this field.

Forging a sustainably driven transport sector

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The creation of Canadian Pacific Kansas City Limited (CPKC) in April 2023 reshaped the North American freight rail industry. With global headquarters in Calgary, Alberta, Canada, CPKC is the only single-line transcontinental railway linking Canada, the US, and Mexico, offering shippers unparalleled rail service and access to major North American ports and global markets. Stretching approximately 20,000 route miles, and employing around 20,000 railroaders, CPKC is a major transportation service provider, employer and neighbour to communities across the continent.

CPKC’s combination of two historic railroads – Canadian Pacific (CP) and Kansas City Southern (KCS) – has steadily built momentum, bringing new competition to supply chains and creating more value for our customers, while remaining steadfast on the integration of our operations, service and safety. This strategic union also created a unique opportunity to embed responsible business practices as we continue to build our business for the future. Since CPKC’s formation, our progress has been firmly rooted in early-stage integration measures encompassing governance, workforce, and systems integration. These strategic steps have supported us in upholding our commitment to safety, supporting seamless service delivery to our customers, and fostering sustainable operations.

In a year of significant change for our company, we ended 2023 with a strong performance. CPKC led the industry with the lowest Federal Railroad Administration-reportable train accident frequency among Class I railroads, building on CP’s legacy of 17 consecutive years leading the industry in this metric. We established a new climate goal for CPKC’s combined locomotive operations and continued to invest in industry-leading low-carbon technology. We deepened our connections with local communities through impactful community investment initiatives and meaningful partnerships. We also reconstituted our Diversity & Inclusion Council to lead our efforts in this area as we integrate CPKC.

These important measures clearly demonstrate to our employees, customers, suppliers and the communities where we operate our continued commitment to being a sustainability leader. As we move through our second year as CPKC, sustainability remains front and centre of our integration journey.

A sustainably driven culture
Combining two railroads operating in three countries and a diverse team of around 20,000 railroaders is a significant undertaking. People and culture are key drivers to CPKC’s success. A primary goal of our integration has been to foster a culture united in the pursuit of safety excellence, best-in-class service for our customers and responsible business practices.

Sustainability remains front and centre of our integration journey

Safety is foundational to everything we do, and maintaining stringent safety standards is crucial amid the complex changes taking place in our business. In 2023, we rolled out Home Safe, our flagship safety programme, across our Southern US and Mexico operating regions. Through Home Safe, we work to protect our railroaders, our communities, our customers and the environment. Upholding our Home Safe commitment daily, we enhance our safety culture through quarterly safety walkabouts and celebrating safety performance through our annual Safety Awards for Excellence. Safety walkabouts bring together management, Workplace Health & Safety Committee members, frontline railroaders and various regulators to proactively identify and address workplace hazards while promoting a safe working environment.

Throughout our network, many passionate railroaders embody our Home Safe commitment and actions. Every year, we recognise these individuals at the CPKC Safety Awards for Excellence, honouring their commitment to championing our Home Safe principles and looking out for the wellbeing of their colleagues every day. While we continually work to be safer today than we were yesterday, we also recognise that safety is a journey, not a destination. We will continue reinforcing a robust safety culture in pursuit of our goal of being North America’s safest freight railroad.

With employees in three countries, fostering a culture where all perspectives are heard and valued is essential to unlocking the full potential of CPKC’s workforce. We established a Diversity & Inclusion Council led by senior leaders to champion the development of our diversity and inclusion strategy as we integrate CPKC. The council held 15 virtual Diversity Dialogue engagement sessions to tap into the wealth of CPKC employee perspectives. Over 200 employees participated in these sessions, providing insight to help inform the evolution of CPKC’s strategy.

Expanding our operational reach brings added responsibility. As a neighbour to hundreds of communities across North America, CPKC is dedicated to operating safely and making a meaningful impact in the communities in which we live, work and operate. In 2023, we expanded our emergency response training and public safety awareness engagement with personnel, community first responders and other stakeholders in communities along our right of way. CPKC organised or participated in 82 community awareness and emergency training events, attended by more than 4,000 emergency responders. In support of local food banks, our annual 2023 Holiday Train programme reached communities across our network in Canada, the US and Mexico, raising CAD$1.8m and collecting over 160,000 lbs of food.

CPKC climate strategy
The transportation sector has a vital role to play in the transition to a lower-carbon economy. Our goal is to be a leader in this transition. Freight rail is the backbone of global trade, moving goods across vast distances with greater fuel efficiency than long-haul trucking. CPKC strives to reduce operational emissions and drive change within freight rail through innovation and collaboration with industry partners, customers, governments, and suppliers on climate solutions.

Freight rail is the backbone of global trade, moving goods across vast distances

One of CPKC’s early accomplishments was to release our commitment to climate action, which sets out our commitment to develop an emissions target aligned with a 1.5°C future. At the same time, we announced a GHG emissions reduction target, which was validated by the Science Based Targets Initiative, to reduce our well-to-wheel locomotive emissions by 36.9 percent per gross ton-mile by 2030 from a 2020 base year.

As we refine our climate strategy, we continue to implement initiatives to reduce operational emissions, including exploring and investing in industry-leading low carbon solutions. This includes developing North America’s first line-haul hydrogen-powered locomotive using fuel cells and batteries to power the locomotive’s electric traction motors. Since the programme’s inception in 2020, we have continued to meet key milestones in this pioneering endeavour. In 2023, we completed two hydrogen locomotive conversions and advanced production on a third, as well as the installation of hydrogen production and fueling facilities. Together with CSX, we announced a joint venture to build and deploy hydrogen locomotive conversion kits for diesel-electric locomotives at CSX’s locomotive shop in West Virginia.

In March 2024, we marked another important milestone with the one-year anniversary of our locomotive biofuel trial project. As part of this initiative, CPKC is collaborating with our industry peers and locomotive suppliers to test the long-term operational impacts of utilising diesel blended with 20 percent biodiesel renewable fuel within our locomotive fleet. In 2023, we completed more than 500 fuelling events and utilised more than 8.2 million litres of B20 fuel in our locomotive operations. For every litre of conventional diesel fuel that is replaced with B20, we reduce total emissions by 18 percent. This pilot project is a critical step in validating the operational impacts of utilising advanced blends of renewable biofuels in CPKC’s locomotive fleet.

In addition to our investments in low carbon initiatives, CPKC continues to upgrade our locomotive fleet and rail network to improve overall efficiency and provide system reliability through our capital expenditure programme. In 2023, we invested CAD$2,468m in capital expenditures to maintain and upgrade our locomotive fleet and network to improve overall efficiency and ensure system reliability.

These accomplishments reflect CPKC’s commitment to operating sustainably and a culture of continuous improvement. As we advance through our second year as CPKC, we are keeping sustainability front and centre in our integration journey. We remain committed to promoting positive change both within CPKC and beyond.

Please see our filings with securities regulators in Canada and the US for additional information and cautionary statements relating to our sustainability efforts, including factors that could affect the forward-looking information in this article.

Breaking down barriers and achieving ambitions

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“An entrepreneurial spirit led me to start my own ventures,” says Isavella Korelidou-Evripidou, Founder and Chief Executive of Global Financial Services Consultants (GFSC Global) – an award-winning consulting group offering services across the corporate, legal, regulatory, financial and banking fields.

“I founded and managed several businesses and thrived on identifying opportunities, with the aim of making a positive impact in the business world,” she says. Today GFSC Global operates in more than 70 countries, providing advice, planning support, structural management and licensing services to clients across the world.

“We work with a broad range of corporate and private clients, including multinational corporations, small and medium-sized enterprises (SMEs), start-ups, entrepreneurs, financial organisations, banks, crypto exchangers, investment funds and high-net-worth individuals,” she says. “We specialise in worldwide licensing, AML/compliance support, legal support and company formation, providing tailored solutions with over 20 years’ experience.”

Overcoming gender bias
For Korelidou-Evripidou, founding and running the business has come with an abundance of rewards – but it hasn’t been without its challenges, especially when it comes to gender equity. “Breaking into leadership positions as a woman often requires overcoming biases and stereotypes that may exist within organisations,” she explains.

Female founders and CEOs have a chance to drive meaningful change within their organisations

She believes the under-representation of women in senior leadership roles can in turn make it harder for female founders and CEOs to find mentors, sponsors or role models who have navigated similar paths. “The other issue is around work/life balance,” she says. “Juggling demanding leadership roles with personal commitments and family responsibilities can be particularly challenging.” But for Korelidou-Evripidou, being a woman in a male-dominated industry can also offer opportunities.

“Female founders and CEOs have a chance to drive meaningful change within their organisations and the industry as a whole, shaping policies, practices and cultures, while contributing to greater gender diversity and inclusion within the industry,” she says. “Successful female leaders can inspire other women to pursue leadership positions in finance and break down barriers for future generations.”

Diverse leadership
Korelidou-Evripidou believes cultivating that diversity doesn’t just benefit women; it leads to better outcomes for everyone involved. “Companies with diverse leadership teams tend to perform better,” she says. “Female founders and CEOs can contribute to improved business outcomes through their unique perspectives and experiences.”

Learning from her own experience, she has made it her mission to encourage greater diversity in all forms. “I believe creating an environment where all team members feel comfortable sharing their perspectives and ideas is crucial for encouraging diversity,” she says. “My top tip for leaders is to encourage open communication, active listening and collaboration among team members to ensure that everyone’s voice is heard and valued.

“It’s also crucial to recognise and celebrate the unique backgrounds, experiences and perspectives that each team member brings to the table, and to ensure that leadership positions reflect diversity by actively promoting and supporting individuals from under-represented groups,” she says.

Adapting to change
That progressive leadership style isn’t just seen in Korelidou-Evripidou’s response to diversity; it is also reflected in the company’s approach to major challenges – most notably demonstrated during and since the pandemic.

Despite the challenges, GFSC Global managed to continue to grow, improving its financial results in 2023. “We did this by focusing on our strengths and building on our core competencies, putting the emphasis on strategic cost management, innovative business models and digital transformation,” she says.

The firm invested in technology to enhance its operations and improve customer experiences, and saw an opportunity to explore new markets and diversify its revenue streams. “With shifts in consumer behaviour and preferences, we sought opportunities in emerging markets and untapped demographics,” she continues. “This involved strategic market research, analysis of consumer behaviour and targeted marketing efforts to effectively engage with new customer segments.”

Future ambitions
The pandemic isn’t the only hurdle the company has faced; Korelidou-Evripidou points to regulatory challenges as one of the key issues for the industry. “As governments around the world strive to protect consumers, investors and the public interest, they have implemented stricter regulations across various sectors,” she says.

“This has led to a greater burden on corporations to ensure compliance with these regulations, resulting in increased legal and regulatory costs. The rapid pace at which regulations are changing makes it challenging for corporations to keep up with the latest requirements.”

But if the company’s past approach to challenges is anything to go by, these setbacks will only create further opportunities for innovation, adaptation and growth – and the company is already plotting its expansion plans. “We are approaching new jurisdictions for licenses in brokerage, crypto, gaming, banking, investment funds, blockchain and many other projects,” she says.

“We aim to continue the success of 2023 this year and beyond, using our experience and knowledge to deliver the best possible service to our clients,” she says. “We also want to continue cultivating a diverse, supportive team that not only benefits the bottom line, but inspires others to break down barriers and achieve their ambitions – as I am proud to have done,” Korelidou-Evripidou concludes.

Bulgarian banks are ready for the Euro adoption

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Bulgaria’s accession to the eurozone and the adoption of the world’s second most used currency is a long-anticipated process. This step will positively impact our economy and will be a driver for accelerating reforms, increasing prosperity, and reaching at least the average European living standards. It will offer numerous benefits to citizens and companies, not only by reducing transaction costs but also by improving the investment environment, activating local and foreign investments, with increased investment activity expected to support employment.

Eurozone membership will offer another benefit. Because of the expiring derogation, banks must allocate capital for purchasing Bulgarian government securities in euros and for holding euro deposits at Bulgarian National Bank (BNB), which is highly illogical given that we have been in a currency board for over 25 years.

This year, the effect is estimated at approximately BGN400m (€205m) of additional capital, and next year it is expected to double. Instead of guaranteeing risk-free loans to the state, this capital could enable us to increase loans to the real economy by several billion leva.

Adopting the euro is expected to boost Bulgaria’s international trade

The ECB will be able to act as a lender of last resort, minimising the risk of bank failures due to a liquidity crisis. Bulgaria will have the opportunity to participate in the decision-making process regarding monetary policy, instead of just being a silent bystander. Although all banks in Europe follow the same laws and regulations, being outside the eurozone, we bear the burden without the benefits.

Adopting the euro is expected to boost Bulgaria’s international trade, especially in agriculture, services, and tourism, as well as in certain manufacturing sectors where Bulgaria has already established strong positions within the EU networks.

In the Association of Banks in Bulgaria, we plan to launch an educational campaign among citizens, for which we count on the support of BNB and the government, to explain all the benefits of adopting the euro, which will significantly improve the business environment for everyone. Banks, businesses, and the state must unite to communicate clearly and help our clients, our employees, and the society navigate through the abundance of information and counteract misinformation, enabling everyone to understand the advantages of adopting the euro. The euro has already become a part of our daily lives, with a significant portion of real estate prices listed in euros, and Bulgarian citizens frequently conducting transactions in this currency.

All systems go
Together with other member banks of the Association of Banks in Bulgaria, we have even more initiatives in the field of environmental protection, social policies, and corporate governance, the so-called ESG. The role of banks is primarily to focus on the areas where we can have the most significant impact to achieve positive effects. Banks are key players in the green transformation, accelerating the path to climate neutrality not only through the decarbonisation of our operations but also through prioritised financing of our clients’ projects. Environmental protection is the most visible aspect of these initiatives, but it is far from the only one. We lead in promoting good governance practices, women’s participation in management, and the independence of our control bodies. For us banks it is important to meet all requirements and prepare our information systems accordingly. We will invest additional resources in cyber security enhancements and increase security measures, protections against cyber threats such as hacking, malware, or phishing.

Alongside that preparation, the contribution of the banking sector is extremely notable in digital banking. Habits today differ from those of yesterday because life imposes its own dynamics. The accelerated implementation of high-tech solutions enhances the user experience. Thus, we provide our customers with even higher quality, faster, and more efficient banking services because the foundation of banking is the relationship between the consumer and the financial institution. In this process, the major market players have an advantage because we possess the resources and means to implement various technological solutions and ensure even higher quality and efficiency in banking services. Digital cards, virtual wallets, and QR-code payments are all part of the new reality. However, the speed of technological transformation depends on the people in the team. We make significant investments in process re-engineering and human resources to create client-friendly applications that enhance the pleasure of interacting with us. The Phygital model is the future of banking. Hybrid forms of banking, a complex model blending digital and physical services, and consumer experience across different channels and platforms – sequentially, in real-time – are what we do at Postbank and what our clients expect. On the other hand, digital payments play a crucial role in stimulating economic growth, innovation, and consumer convenience.

Finally, the euro adoption is a historic moment, and we are well prepared for this significant step. And if there is a system in the Bulgarian economy that is already in the eurozone in terms of requirements, regulations, good business practices, and behaviour, it is the banking system.

So, I can confidently state that we, the banks, will be ready by January 1, 2025.

Lying in corporate elections

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We live in polarising times. The current political and cultural environment is arguably the most heated and controversial in decades. One of the most prominent victims of our era: the truth. As Mark Twain famously said; “A lie can travel half way around the world while the truth is putting on its shoes.” Political election campaigns, in particular, are riddled with misleading statements, half-truths and outright lies. Our fragmented media ecosystem and the pervasive influence of social media make it easier than ever to distribute falsehoods to a vast audience near-instantaneously, compromising the integrity of political elections.

While not as extreme as with political discourse, similar issues have emerged in corporate elections. In recent years, it seems there have been more half-truths and outright lies in proxy contests than perhaps ever before. During proxy season, hardly a day goes by without a press release, shareholder letter or investor presentation containing questionable statements.

Public companies, as securities issuers, face heavy scrutiny of their disclosures under areas of federal securities law beyond the proxy rules. A company simply cannot make recklessly optimistic statements about its future prospects without exposing itself to liability.

Misleading statements, half-truths and outright lies undercut the ideals of corporate democracy

Dissident shareholders like activist funds, on the other hand, generally escape similar levels of scrutiny. There are rules designed to protect the integrity of corporate elections – the federal proxy rules under the US Securities Exchange Act of 1934. Unfortunately, however, these proxy rules – many of which were adopted decades ago and long before the advent of the digital age – are increasingly under stress. In fact, many activists repeatedly violate the proxy rules, yet apparently face no repercussions.

Constraints on misstatements
Rule 14a-9 under the US Securities Exchange Act of 1934 prohibits false and misleading statements in a proxy contest. The rule also prohibits the omission of material facts when such omission would make statements false or misleading. The rule provides examples as to potentially misleading statements, including:
predicting future market values;
making disparaging claims without sufficient facts;
obfuscating who is disseminating the proxy solicitation materials in question, and;
making claims prior to a shareholder meeting regarding the results of a solicitation.

While helpful on its face, rule 14a-9 leaves substantial leeway for interpretation of a statement. The application of these rules has often failed to rein in even clearly problematic behaviour in proxy contests.

For example, the legality of statements about proxy tallies prior to the closing of the polls remains an unresolved issue. As noted above, rule 14a-9 lists ‘claims made prior to a meeting regarding the results of a solicitation’ as an example of a misleading statement. On that basis, several courts have ruled that such disclosures can spoil the fairness of the voting process by creating a ‘bandwagon effect.’ This is the phenomenon that many shareholders may vote for the purported likely winner in the belief that the outcome has become a ‘foregone conclusion.’

Yet, many courts have been reluctant to intervene even in seemingly clear cases. For instance, in one court case, an activist announced preliminary proxy voting results several weeks prior to the shareholder meeting, claiming that it was clearly leading with 80 percent of the shares voted. These numbers turned out to be false. However, the court declined to issue a preliminary injunction, and the dissident proceeded to succeed in its proxy contest. This explains why we still see leaks of alleged or actual preliminary vote tallies pre-meeting on a regular basis, including in a recent high-profile proxy fight.

SEC review
In the past, the SEC staff in the Division of Corporation Finance, through the comment letter process, strove to enhance compliance with these proxy rules. Whenever a party overstepped boundaries, the other party would send a private and confidential letter to the SEC, noting the violations. To the extent its staff agreed, the SEC would often react promptly to those letters by issuing comments to the offending party. This process ensured that the rhetoric in proxy contests remained significantly less heated and more truthful than in political elections.

We believe it is time for Congress to level the playing field

In recent years, practitioners have observed a decline in the number and breadth of SEC comments in proxy contests. This surprising trend contrasts with the SEC’s extensive focus on proxy contests prior to the adoption of the universal proxy rules in 2021. The SEC’s packed agenda and limited resources have likely shifted attention towards other pressing matters.

Moreover, the SEC’s authority under the proxy rules has always been limited. The Division of Corporation Finance can only provide comments. If proxy rule violators do not comply with those comments, their staff can only refer a matter to the SEC’s Division of Enforcement. However, we are not aware of any enforcement action prior to a shareholder meeting in recent years.

Litigation in federal court
Companies waiting for SEC action can instead bring suit against proxy rule violators in federal court. However, litigation poses significant risks for a company.

As an initial matter, lawsuits are not inexpensive. While there is often insurance when companies are the defendants in a lawsuit, there is typically no insurance available for companies to pursue litigation as plaintiffs. Moreover, proxy advisory firms and investors frequently criticise companies for initiating litigation against shareholders. This is certainly an important consideration in a proxy contest where a company needs to weigh any potential win in court against a loss at the ballot box.

More substantively, there is also the reality of condensed proxy fight timelines and the burden of proof. Proxy contests are fast-paced and shareholder meetings are typically only a few weeks away. Therefore, a litigant needs to move for expedited proceedings and file for a preliminary injunction to have any hope for a ruling prior to election day. The burden of proof for the issuance of a preliminary injunction, however, is greater than that required in regular proceedings. A preliminary injunction is an extraordinary remedy that generally will be granted only in limited circumstances.

Many activists repeatedly violate the proxy rules, yet apparently face no repercussions

This type of remedy is available generally only when the plaintiff establishes that: 1) there is a likelihood of success on the merits; 2) there is irreparable harm if the injunction is denied; 3) the balance of the equities tips in the plaintiff’s favour; and 4) the public interest favours the requested relief.
This standard requires plaintiffs to clear a high bar – a challenging proposition in the midst of a proxy contest.

A further complicating factor is that many federal judges are not familiar with the intricacies of proxy contests because such cases are relatively rare. As a result, the case law originating from the federal courts has been uneven and inconsistent.

For example, a court last year ruled that certain disclosure claims can be ‘mooted’ by the defendants by merely filing the complaint with the SEC and stating that they disagree with the lawsuit. This holding is antithetical to the purpose of the securities laws, which focus on accurate disclosure. This ruling has become yet another potential obstacle to enforcing disclosure claims in federal court.

A call for action
It is time to protect the integrity of corporate elections and the shareholder vote. Misleading statements, half-truths and outright lies undercut corporate democracy. We believe it is time for Congress to level the playing field. The SEC should receive more resources to monitor proxy contests. In addition, the proxy rules should be tightened and provide the SEC with more authority to sanction violations. For instance, the SEC should have the right to require proxy rule violators to publicly withdraw false statements. The SEC should also be authorised to enjoin proxy contests and impose severe sanctions on repeat violators (freeze-out periods, for example). Lastly, it should be clarified that the mere filing of a complaint with the SEC is insufficient to ‘moot’ a lawsuit over misstatements in a proxy contest.

These changes would correct a fundamental imbalance in our current system between companies and activist shareholders. Simply put, both companies and investors should be held to the same standard. Some may argue that in our free market system, investors should engage in their own research before voting, rather than relying on a government regulatory agency to police proxy contests.

However, in fast-moving proxy fights, even institutional investors do not have the time, resources, or manpower to fact check all statements. Proxy advisory firms like ISS and Glass Lewis, who influence significant portions of the vote, are similarly ill positioned to combat misinformation. Retail shareholders, a major focus of the SEC’s mandate, are even more vulnerable to disinformation in proxy fights. For these reasons, the investor community cannot solve this issue on its own.

Given current trends, it’s already past time for Congress to step in. The SEC takes a leading role to combat misleading or untruthful statements in other contexts – and Congress should enable it to do the same in proxy contests. Lying with impunity should not become a norm in our corporate elections.

A creative approach to consulting

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Thomas Bargetzi, Founder and CEO of THOMAS BARGETZI AG, believes that success is the goal of all works, activities, or things you try to achieve, and the result of many little pieces of performance. “I get up in the morning to be successful, otherwise I stay in bed. Success is a mindset. This means you must be a leader, concentrated and focused on the matters you do, with the people you are working with!” he declares.

Bargetzi also believes that failure is the other side of success and that you can only become successful if you are ready to accept this fact. Likening success in sports to success in life, where sometimes you win and sometimes you lose, he notes that in life, you simply need to win one more time than you lose, which means you have won!

Preparing for success
As a sports addict in his youth, Bargetzi intended to become a professional sportsperson, but his father urged him to get a basic university degree to have access to all the options he needed to perform in his business life, once his sports career was over.

Bargetzi considers this the best advice he ever got, and after he finished his sports career, he went through 13 years of further education, studying finance, management, business administration (an MBA at City University), a postgraduate in controlling, and two bachelors degrees in marketing and sales. Equally important for European operations, he speaks four languages fluently; English, French, German and Italian.

Having reached the top of a very big company, the Feldschlosschen Brewery in Switzerland, at the age of only 37, Bargetzi felt that there must be something else he could aim for, and that goal turned out to be defining a new business model.

You simply need to win one more time than you lose, which means you have won!

Bargetzi noticed that consultants often had very good ideas, plans, and strategies, but little or no idea about the best way to make them operationally successful. With this in mind, he defined the business model of ‘operational interims management,’ which involved taking charge of these ideas, defining them clearly and using one’s own talents to realise and achieve success in what others have planned.

Along with his website, www.bargetzi.com, where he describes how one can implement this newly defined business approach, Bargetzi got together with three business colleagues and founded the Swiss Association for Interims Management (DSIM), where over 500 interim managers share experiences and advice for difficult situations.

As the CEO and owner of his own restructuring/turnaround company, Bargetzi’s modus operandi when having a mandate in a company is to start with 10 days of operational analyses, going through each department, talking to many, many people, going out to visit customers to get their input, get the strategy, and understand the job. Bargetzi follows up by proposing what he would do. “If the customer accepts, I execute what I proposed. I collect as many facts, figures, and data to understand where we make and where we lose money. I then propose actions to achieve the goals,” he explains.

Dare to dream
Bargetzi’s plan for the future of THOMAS BARGETZI AG is to achieve 60 mandates, which means he has five more to go. He also plans to continue working until he turns 70 and to have as much fun as possible in business and his private life. As an avid sportsman, Bargetzi plays sports five days out of seven, mainly after work, to help digest what he has seen during his day. He also finds that movement is the best way to restore and recharge his batteries.

Bargetzi also has his eye on the new generation, hoping to inspire and guide those who will follow in his footsteps. Bargetzi hopes to convey more than ever that “everything is possible. You simply must watch out, try things, be smart, fast, and dare to fail.”

The fintech evolution is elevating the trading experience

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Over the past few decades, finance and technology have intersected, sparking a revolution in the way we manage, invest, and trade our assets. A new era of accessibility and innovation has been introduced; it has redefined traditional brokerage models and has since greatly impacted financial services and online trading and investment.

Leaders around the world are challenged to integrate technology into their strategies and plans, in order to meet the evolving needs of their clientele. Philippe Ghanem, Founder and CEO of fintech firm SquaredFinancial, stands at the forefront of this revolution, pioneering a vision to transform his online brokerage firm into a one-stop shop for investors around the world. Today, SquaredFinancial is a renowned online gateway that offers investors and traders around the world access to the world’s most popular financial markets.

Leading the fintech frontier
Ghanem’s vision for trading extends beyond traditional brokerage offerings. He founded SquaredFinancial in 2005 out of Dublin, driven by his fascination about technology and fuelled by the idea of changing people’s perception of trading. By leveraging the power of technology, SquaredFinancial aims to revolutionise the investment landscape, providing a comprehensive range of products and services in one place. From cutting-edge trading tools, market analysis and state-of-the-art trading platforms, to banking-like conveniences such as debit cards and fixed deposit accounts, the company is dedicated to simplifying and enriching investor experience and making trading the financial markets accessible to all. Whether it is trading stocks CFDs, forex CFDs, or cryptocurrencies CFDs, or accessing expert market views and analyses, SquaredFinancial aims to provide a seamless and integrated experience for its clients, as well as the proper education and knowledge of the markets and their drivers, that will help them make informed decisions.

With over two decades of experience in the trading and financial industries, Ghanem showcases a wealth of expertise and innovation. Widely regarded as an innovator and visionary in global financial markets, Ghanem has built a reputation for founding and nurturing financial services companies grounded in his deep understanding of trading systems. His strong belief in the power of innovation and technology has fostered strong customer relationships and paved the way for innovative products and services. At SquaredFinancial, Ghanem leads a team of industry experts who share his passion for trading, ensuring that education, analysis, and expert views form the cornerstone of the company’s wealth of expertise offered to their global clients and investors, a rich know-how that will help them elevate their trading experience.

Quality over quantity
We live in a fast-paced digital world submerged with information, where quality is often dimmed by quantity. However, Ghanem believes that true success lies not in the overwhelming volume of content that people encounter in their traditional and digital feeds, but rather in the originality, relevance, and impact of what is produced and how they react to it and interact with it. In every sector or industry, consumers are interested in authenticity, reliability, and value.

Whether it is in product development, content creation, or customer service, prioritising quality fosters trust, loyalty, and distinction. Ghanem is keen on investing time and resources into creating ideas and delivering exceptional experiences and quality service. Which is why, in its pursuit of excellence, SquaredFinancial is committed to quality that lasts, building long-term partnerships with its clients and stakeholders.

Ghanem is a strong believer that excellence and personalisation are the pillars to positioning his company as a leader in the financial industry. In today’s competitive investment landscape, where products and services are often similar, tailored customer service and support are key in creating trust and loyalty. SquaredFinancial offers investors innovative products with competitive pricing and conditions, alongside high security and transparency. The company understands that supporting clients goes beyond resolving issues.

The team strives to offer them an exceptional and localised support that encompasses understanding and anticipating their needs, empathising with their challenges, and providing tailored solutions with efficiency and proactivity. Each interaction becomes an opportunity to exceed expectations and build trust. This dedication to quality service not only resolves issues but also transforms customer challenges into opportunities to strengthen relationships.

Resilience of the trading industry
The financial markets are historically known for being volatile, subject to fluctuations driven by a host of factors, from geopolitical events to economic indicators. In such a dynamic environment, resilience is key to success. Ghanem understands the importance of adaptability, guiding SquaredFinancial through with determination and insight. By embracing innovation and technology, the company has emerged stronger than ever, well grounded, and led by industry experts.

SquaredFinancial aims to revolutionise the way investors access and manage their finances

The rise of fintech has brought a new era in finance, disrupting traditional models and democratising access to financial services. From mobile banking to robo-advisors, fintech innovations have reshaped the industry landscape, empowering consumers and investors alike. Ghanem recognised the transformative potential of fintech early on, laying the groundwork for SquaredFinancial to thrive in this rapidly evolving ecosystem.

Since its inception, the company has been guided by a sole vision; to revolutionise the way investors perceive the trading industry and engage with financial markets. Under Ghanem’s leadership, the company has pioneered a range of innovative solutions designed to simplify the investment process. From its intuitive mobile trading platform to advanced market analysis tools, SquaredFinancial is committed to making trading accessible to investors of all backgrounds and experience levels.

With great knowledge
Empowering investors with knowledge is crucial to SquaredFinancial’s values. Ghanem recognises the importance of education and transparency in fostering trust and confidence among clients. Through a range of educational initiatives, including podcasts, webinars, seminars, and analyses, SquaredFinancial provides clients with the tools and information they need to make informed investment decisions. By simplifying the intricacies of the financial markets, the company empowers investors to take charge of their financial futures.

By embracing innovation and technology, the company has emerged stronger than ever

In today’s interconnected world, diversification is essential to mitigate risk and try to maximise returns. Ghanem understands the importance of spreading risk across diverse markets and asset classes, helping investors navigate volatile market conditions with confidence. Through innovative investment strategies and expert market analysis, SquaredFinancial empowers clients to build diversified portfolios according to their financial profiles, tailored to their individual risk tolerance and financial objectives.

At the heart of SquaredFinancial’s innovation strategy lies the power of AI and big data analytics. Ghanem is a strong believer in the potential of these technologies to revolutionise the investment landscape. By leveraging AI algorithms and advanced data analytics, the company gains valuable information about market trends, identifying investment opportunities and risks. From in-depth analytics to algorithmic trading strategies, SquaredFinancial can stay ahead of the curve and accompany its clients on their trading journey.

EMIs and big tech
As the financial landscape evolves, the role of Electronic Money Institutions (EMIs) has become increasingly prominent. EMIs leverage technology to offer innovative financial services. Ghanem is aware of the potential of EMIs to drive innovation and efficiency within SquaredFinancial, which is why the company aspires to create a one-stop shop for investors, offering innovative financial services and breaking the lines between traditional banking and fintech. By harnessing the power of big tech and AI, SquaredFinancial aims to revolutionise the way investors access and manage their finances.

Beyond healthy trading, Ghanem is a passionate advocate for impact investing, championing the alignment of financial goals with societal benefits. Impact investing seeks to generate positive social outcomes, addressing global challenges such as social inequality and sustainable investment. By leveraging the power of data-driven decision-making, SquaredFinancial aims to identify investment opportunities for all to promote economic inclusion, help reduce inequalities, and create meaningful impact.

Sustainability is in our DNA

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KBC is an international banking and insurance group with 42,000 employees and 12 million clients across Belgium, Slovakia, Hungary, Bulgaria and the Czech Republic. KBC Asset Management NV (KBC AM) acts as the group’s investment arm, working with 2.8 million retail and institutional investors, developing products for intra-group distribution and providing investment fund sales and advisory support. At the core of our day-to-day motivation lies our motto ‘Everyone invested all the time’ and our mission remains clear: make investing a healthy financial habit for everyone, keep clients feeling comfortable when investing and so keep them invested, and do this in a personalised, though efficient way.

Sustainability is key
It is clear that the world has shifted towards sustainability. This trend can’t be stopped because it is driven by ethical concerns, financial incentives, protecting the environment, and making sure workers are healthy and happy. It has become a crucial focus for businesses and investors across the world.

At KBC Asset Management, we integrated sustainability into our overall corporate strategy. The basic condition for sustainability is financial resilience and vice versa. Only by focusing on long-term sustained financial performance and strict risk management are we able to honour all our commitments.

Our customers also want to contribute in this area. Responsible Investing (RI) is a way of allowing clients to combine their financial goals with their concerns for the environment, society and corporate governance. The impact of global warming is one of the greatest challenges the world faces and will have a significant and lasting impact on economic growth and prosperity. As a large financial institution, we want to play a leading role and be a significant lever in the process of transition to a more sustainable society and a low carbon economy, by working together with all stakeholders.

Since 1992, KBC has adapted its sustainability policies to reflect changing insights. It is also the year we launched the first Responsible Investing fund in Belgium. We regularly bring new solutions to the market and our methodology has become increasingly stringent. KBC Asset Management was also the first financial institution in Belgium to have its own Responsible Investing research unit.

Fully in line with our sustainability strategy, all Responsible Investing funds have been fossil fuel-free since November 2017. And in May 2018 KBC launched Pricos SRI, the first SRI pension savings fund on the Belgian market. In 2019, all our Responsible Investing funds in Belgium obtained the ‘Towards Sustainability’ label, an initiative of Febelfin (the Belgian Financial Sector Federation).

Remaining on top of things
We are, and remain, a pioneer regarding Responsible Investing. That said, it is a strategic choice to keep on top of the developments in our industry. That includes being future proof in a lot of areas: up-to-date methodology, investment solutions that take the current sustainable challenges into account and providing state-of-the-art reporting. In fact we recently updated our Responsible Investing methodology with a much bigger role for biodiversity due to the impact of global warming. A new biodiversity policy is being added whereby companies with serious controversies over land use and biodiversity will now be excluded, as well as companies with activities that have a negative impact on biodiversity and that do not take sufficient measures to reduce their impact.

Keep evolving
The world of Responsible Investing is evolving rapidly. Not only are our clients’ expectations changing, the regulator has also published clarifications on the various legislative initiatives and the quality standard of the Towards Sustainability label has also been tightened. This is why KBC Asset Management screens its Responsible Investment methodology annually to comply with the most recent developments.

Responsible Investing stands or falls by its credibility. Therefore the sustainability policy and criteria are monitored by the Responsible Investing Advisory Board, which is fully independent of KBC. The body consists of leading academics from several universities, who are experts in fields like human rights, business ethics, biology and ecology. We give our clients a transparent view of their investments.

For example, a Responsible Investing dashboard was set up in the clients’ mobile application, where they can track the goals of their Responsible Investing funds. This report is accessible to every investor. We want to be the reference and stay one step ahead of the competition. KBC Asset Management will continue to move alongside the markets and the preferences of its clients to keep its services up to date. We will continue to work towards a sustainable and responsible future, that keeps everyone invested, all of the time.

India’s economic ascendancy

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The world is undergoing an unparalleled evolution, unlike any witnessed in human history. Never before have we witnessed such remarkable advancements in manufacturing, renewable energy, infrastructure development and artificial intelligence, among others. What sets this apart is not just the magnitude of dynamic progress, but also the global distribution of its impacts. This needs action that is both purposeful and that facilitates nation building. With this shift comes the necessity for businesses to accelerate their approach to sustainable, inclusive, and enduring growth for all stakeholders. The United Nations defines sustainable development as development which meets the needs of the present without compromising the ability of future generations to meet the same. By ensuring sustainable and inclusive growth, India aims to leapfrog to a developed economy.

Indian corporates must actively seek to ingrain sustainability and inclusive growth principles in their organisational culture. It is also equally crucial that businesses establish partnerships with entities that share similar dedication and enthusiasm for generating a positive impact on society. Further, instilling an innovation-centric mindset capable of going beyond conventional boundaries and devising ingenious approaches to accomplish overarching goals is paramount for a country like India. While each industry contributes in its own way, the natural resources sector which provides essential raw materials for various industries and holds a significant potential for sustainable development would play a critical role. From minerals used in renewable energy to metals essential for modern infrastructure, the natural resources sector underpins the foundation of sustainable and inclusive growth.

The role of natural resources
India’s ascent as an economic powerhouse is characterised by its dynamic population and demographic dividend. Central to the country’s economic surge lies the indispensable contribution of natural resources. With the advent of transition in the area of energy and industry, the demand for minerals and raw materials is poised to skyrocket, positioning sectors like mining as fundamental blocks of the India growth story.

India’s mining sector is experiencing healthy growth, driven by the nation’s pursuit of self-reliance and economic prosperity. Today, India is the second largest steel and aluminium producer, fourth largest iron ore and zinc producer and sixth largest bauxite producer in the world. Being a leading group in this sector, Vedanta, with its diverse portfolio encompassing zinc, lead, silver, iron ore, steel, copper, aluminium, nickel, and oil and gas, is uniquely equipped to meet the escalating demand for primary materials, both domestically and internationally. Vedanta’s strategic assets across the globe amplify its capabilities, enabling it to significantly contribute to ensuring resource sufficiency. Central to Vedanta’s vision is the role it plays in supporting India’s quest for self-reliance in minerals, metals, and energy. A vision that encompasses more than just financial growth – one that aspires to uplift communities, safeguard the environment, and cultivate a culture of broad-based prosperity – is essential for businesses aiming to contribute to the broader agenda of nation-building.

Aerial view of zinc smelting plant

Vedanta’s leadership as a natural resources conglomerate transcends mere scale, embodying a commitment to sustainability and responsible business practices. Vedanta’s zinc business holds around 75 percent market share in India’s primary zinc industry while its aluminium business has about 50 percent market share.

Vedanta is the largest private sector oil and gas in India, contributing nearly 25 percent of India’s oil production. As frontrunners in various segments of the natural resources industry, Vedanta’s operations are guided by a holistic value creation process that places equal emphasis on business, social, and environmental sustainability. Vedanta’s contribution to India’s economic success extends beyond its commercial pursuits and includes efforts to empower marginalised communities through its social impact programmes. By uplifting marginalised communities and enabling inclusive growth, Vedanta is contributing towards India’s economic progress. Moreover, Vedanta’s constant efforts are visible in adapting greener mining practices to ensure environmental sustainability.

Leading the charge
Through strategic investments in technology and innovation, Vedanta is spearheading the transition towards sustainable mining while prioritising inclusive and responsible practices. By aligning every business unit with the shared vision of ‘Transforming for Good,’ Vedanta has set the stage for integrated growth and long-term sustainability. For this, Vedanta has embraced a holistic approach towards growth with industry-leading ESG practices, ensuring that economic progress goes hand in hand with social development and environmental stewardship.

The commitment to excellence with the below mentioned nine ESG aims is leading the path for Vedanta to carve its niche in leadership:

Transforming communities
Aim 1: Keeping community welfare at the core of business decisions
Aim 2: Empowering over 2.5 million families with enhanced skillsets
Aim 3: Uplifting over 100 million women and children through education, nutrition, healthcare and welfare
Transforming the planet
Aim 4: Net-carbon neutrality by 2050 or sooner
Aim 5: Achieving net water positivity by 2030
Aim 6: Innovations for a greener business model
Transforming workplaces
Aim 7: Prioritising health and safety of all employees
Aim 8: Promote gender parity, diversity and inclusivity
Aim 9: Adhere to global business standards of corporate governance

As India charts a course towards achieving net zero emissions by 2070, Vedanta has emerged as a key enabler, leveraging its diverse portfolio of metals and minerals to drive indigenous manufacturing and bolster supply chains. This contributes to India’s energy security and mineral independence. Vedanta has committed towards achieving net zero carbon by 2050 or sooner with a planned $5bn investment over the next decade and reducing absolute emissions by 25 percent by 2030 from the 2021 baseline. Over the past year, concrete measures have been undertaken in this direction to reduce GHG intensity, use renewable energy, and implement innovative technologies for minimising environmental impact. Vedanta has also invested in community development programmes to help build the resilience of communities and enhance its social license to operate.

Vedanta also places a strong emphasis on innovation and greener product portfolios. By driving innovation in products with lower carbon footprints and embracing renewable energy solutions, Vedanta is consistently aligning its business objectives with environmental imperatives. The company’s commitment to reducing its carbon footprint extends beyond operational efficiencies to encompass initiatives like renewable energy adoption and decarbonisation of vehicle fleets.

Transcending operational boundaries
Vedanta’s journey towards sustainable growth exemplifies the power of responsible corporate citizenship with its initiatives serving as a catalyst for positive changes at the community level and beyond. As the company continues to forge ahead, it remains poised to shape a future characterised by prosperity, equity, and sustainability.

By weaving sustainability into its core business processes and governance mechanisms, Vedanta has aligned with global best practices while driving value creation for its stakeholders. It has upheld accountability and transparency, setting a precedent for responsible corporate citizenship through transparent reporting and comprehensive sustainability frameworks.

Vedanta’s sustainability focus also transcends operational boundaries, empowering communities and supporting inclusive growth. Vedanta’s philanthropic initiatives positively impact over 50 million lives annually, focusing on childcare, nutrition, women’s empowerment, healthcare, skilling, sports and animal welfare.

Through programmes like Nand Ghar – an initiative for enhancing pre-primary learning, health and women’s empowerment – Vedanta is helping uplift millions by providing access to education, healthcare, and nutrition. In the last six years, Vedanta spent over Rs2,200 Crore on CSR. By focusing on the wellbeing of women and children and striving to combat hunger and malnutrition, Vedanta is consistently focused on social upliftment and inclusive growth.

The pivotal focus on inclusive growth permeates every facet of the organisation, shaping its internal processes, governance structures, and business administration mechanisms. Underpinning this vision is the commitment to upholding good governance practices, supported by rigorous policies and frameworks that drive accountability and transparency.

Driven by its focus on building a strong foundation, Vedanta’s resilience and adaptability helped the group navigate unprecedented geopolitical and operational challenges in recent years. Despite the unpredictable macroeconomic environment caused by global conflicts and supply chain disruptions, Vedanta achieved commendable operating performance while navigating external shocks and realigning supply chains.

As Vedanta charts its course for the future, the company remains committed to elevating its ESG journey. By setting a horizon for certain ESG plans at 2030, Vedanta aims to set broader targets and programmes with a greater impact. This includes plans to have 2.5GW of continuously operating renewable energy (RE RTC) capacity and completely decarbonising its fleet of light motor vehicles by 2030.

As India grapples with the intricacies of economic expansion and environmental preservation, Vedanta remains at the vanguard of driving sustainable transformation. Vedanta’s vision extends beyond mere profitability, underscored by its emphasis on shared value creation and stakeholder engagement. Championing diversity, supporting marginalised communities, and promoting equality are actions that not only enrich lives and contribute to the strengthening of societal fabric but also improve productivity and resilience of businesses.

By setting ambitious ESG targets and collaboration with stakeholders, Vedanta aims to unlock value while safeguarding the interests of all stakeholders. As the company embarks on its transformative journey, it remains committed to creating a sustainable and inclusive future for India and beyond.

Ingraining sustainability
In the case of Vedanta, its corporate strategy is devised to address and act upon the fundamental expectations of key stakeholders concerning critical issues such as climate change, human rights, occupational safety, environmental conservation, diversity, inclusion and governance. This strategy is underpinned by a three-pillar framework which serves as the driving force behind the company’s efforts to promote sustainability outcomes across our communities, workforce, and the environment. Leveraging its leadership position and innovative technologies, Vedanta is not only catalysing India’s economic resurgence but also shaping a future where economic prosperity is intrinsically linked with environmental stewardship.

In order to contribute in this direction, Vedanta continues to serve as a leading responsible business, driving sustainable development and prosperity for generations to come.

Financing the economy, the mutualist way

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What is your analysis of Crédit Mutuel’s performance in 2023?
In 2023, the Crédit Mutuel group achieved a record performance, with net revenue of €4.6bn, which was an increase of 8.4 percent, demonstrating strong sales capacity and its operational efficiency as well as financial stability.

In a complex economic environment marked by persistent inflation and changing monetary policy, these results attest to the effectiveness of Crédit Mutuel’s diversified universal banking and insurance model and the relevance of its strategic choices in serving the collective interest.

We are allocating more than 90 percent of revenue to reserves for development in order to offer the best possible quality of service to our customers and members through innovative, useful and solidarity-based offers and, more generally, through actions that benefit society as a whole.

Our group relies on the efforts of its 84,600 employees and 20,000 elected members via its local networks to serve its 37.8 million individual, professional and corporate customers in France and Europe.

We can see that the crisis is accelerating transformations, in particular awareness of the environmental and climate emergency. How does the group integrate this challenge and step up efforts in its strategy?
In view of the issues of global warming, loss of biodiversity and damages caused by exposure to climate hazards, we are stepping up our eco-responsible initiatives and offerings to support our customers with their ecological and energy transition projects.

Strongly committed to the decarbonisation of the economy and the protection of biodiversity, the group continues to implement sectoral policies with the objective of contributing to carbon neutrality in accordance with the Paris Climate Agreement. This is reflected in particular in the publication of decarbonisation targets in the context of the group’s membership of the Net-Zero Banking Alliance (NZBA).

In addition to strong strategic ambitions, in 2023 the Crédit Mutuel group continued to integrate climate and environmental risks into its overall risk management and developed a methodology for assessing its customers’ geographic exposure to climate hazards.

The group is reducing its exposure to activities with high social and environmental impacts: by moving away from unconventional fossil fuels; by ceasing to finance coal-fired power plants and mining operations; by strengthening its climate commitments and sector policies in sectors with high carbon intensity; and by continuing its commitments in key sectors given its business model, such as the agricultural and wine-growing sectors, as well as in the agri-food and residential sectors.

How is your engagement in the regions concretely reflected?
The group continues to fully play its role in financing the economy by supporting the needs and projects of all its customers and members, particularly the most vulnerable, both in bancassurance and through its many other services. The purpose of a bank, particularly a cooperative bank such as Crédit Mutuel, is to stay as close as possible to its customers and give them support at every stage in their lives.

The mutualist model enables us to respond to the expectations of the current era

Our decentralised organisation facilitates short decision times, enabling us to be highly responsive to all our customers’ needs. This regional proximity enables us to make quick decisions based on our insight into local realities. This support for economic development in the regions is part of our approach as a financial partner over the long term. It includes support also through our private equity structures (more than €4.8bn in equity in 600 innovative or high-growth companies).

The quality of our customer relationships is also a priority – in 2024, the group has again been ranked number one by BearingPoint-Kantar for customer relations in the banking sector. The commitment of our employees and elected directors and investment in new technologies are the strengths of our group in addressing the challenges of today’s world. Within the Crédit Mutuel group, we build success day by day in each of our local co-operative banks and network branches, serving everyone.

More generally, how does the mutualist approach serve as a response to the challenges ahead?
The mutualist model enables us to respond to the expectations of the current era. Our values are based on proximity, with a regionally rooted organisation serving development in general and that of economic players, enabling us to provide the best possible service to our customers.

The solidity afforded by this model gives the group the means to act in support of the economy and also to engage in social and environmental initiatives. Because the group is a co-operative bank with no shareholders, it only has its customers to satisfy. This is a guarantee of its independence and freedom of action. It is also a differentiating factor and underpins the strength of its commitment.

Our aim is to remain profoundly mutualist, useful and supportive, at the service of members, customers and society. Our founding aims were mutualist and this approach remains central to everything we do. We want to remain efficient and supportive – always enhancing our performance so that we can also enhance our support.