These initiatives comprise the following loans and grants:
- A US$401 million loan for public policy development aimed at supporting government efforts to meet the climate change mitigation and adaptation goals set forth in its Climate Change Special Program, PECC);
- A US$307.74 million package for the Efficient Lighting and Appliances Project – composed of a US$250 million WB loan, a US$50 million Clean Technology Fund (CTF) concessional loan, and a US$7.12 million Global Environmental Facility (GEF) grant; and
- A US$4.5 million GEF grant for the Gulf of Mexico Coastal Wetlands Climate Change Impact Adaptation Project.
“The operations approved today are the result of close collaboration between Mexico and the World Bank and will allow us to continue promoting our country’s economic and social development, placing special attention on themes of climate change mitigation and adaptation,” said Ernesto Cordero, Finance and Public Credit Secretary. “Operations like these contribute to strengthen Mexico’s institutional and regulatory framework to better address the climate change challenge and help us reach the goals set forth in the Climate Change Special Program (PECC). Furthermore, it will help us expand the supply of financing sources in order to support the necessary investments in the sector,” Cordero noted.
Supporting environmental sustainability and strengthening the institutions charged with implementing such policies underpin the World Bank support in this area. Addressing climate change challenges through mitigation mechanisms, as laid out in these three new projects, will have a positive effect by improving the country’s competitiveness in the energy and environmental arenas, while creating employment opportunities.
These initiatives focus on a comprehensive service package that includes advisory, technical assistance, knowledge exchange and coordination services, jointly supporting the creation of a framework that will allow Mexico to advance towards a low-carbon economic growth and include measures to adapt to climate change impacts.
Towards a Low Carbon Growth
Through the implementation of government policies and programs to adapt and mitigate climate change in the energy, transportation, housing and forestry sectors, Mexico has become one of the most advanced nations internationally.
“Mexico has proven to the international community how a country with an emerging economy can adopt a responsible and proactive attitude toward climate change challenges, becoming the respected host of an international climate change agreement. COP 16 in Cancun is a clear example of the latter,” said Gloria Grandolini, World Bank Country Director for Mexico and Colombia. “We support the government’s efforts to establish greenhouse gas-emission reduction initiatives in order to attain a sustainable and inclusive development,” Grandolini added.
The US$400+ million loan supports the government’s low carbon development, with the following expected results:
- Increase renewable energy sources by promoting energy efficiency through cogeneration;
- Improve the efficiency of the vehicle fleet and road operations in Mexico;
- Modernize the housing market to include energy efficiency in construction standards; and
- Incorporate climate change considerations in land management and forestry activities.
Policy areas targeted in this operation are the result of a comprehensive analytical and consultation effort undertaken by the World Bank in Mexico during the past three years. It involves areas with great potential for reduction of greenhouse gas emissions while offering economic and financial returns.
Some of the specific results of this operation include:
- Energy Sector: Increasing the number of energy cogeneration permits granted by the Energy Regulation Commission.
- Transportation Sector: An estimated 30,000 vehicles belonging to public transportation operators will be covered by the Clean Transportation program.
- Housing Sector: Building of 200,000 new housing units under the National Housing Commission’s (CONAVI) subsidy program, which contemplates energy efficiency systems and building of 100,000 new houses that qualify for international carbon credits under the Clean Development Mechanism (an agreement subscribed in the Kyoto Protocol that allows governments in developed countries and companies to enter agreements to fulfill greenhouse gas-reduction goals).
- Land and Forestry Management: Increasing forest management permits from 4,000 to 6,600 between 2010 and 2012 as the result of regulatory reform; publishing the draft for the REDD+ strategy (which seeks to stop deforestation and includes strong involvement from local communities), in order to conduct public consultations.
The organization responsible for the implementation of this loan is the SHCP, which in turn has designated the National Savings and Financial Services Bank (BANSEFI) as financial agent. This is a US-dollar denominated variable interest rate (6-Month LIBOR) loan, plus a variable margin, with a 14-year maturity period. The opening fee has been fixed at 0.25% of the total sum. The project is expected to end on June 23rd, 2012.
More Efficient Lighting and Appliances
The Efficient Lighting and Appliances Program will promote a more efficient use of energy in households through technologies that mitigate climate change impacts.
First, incandescent light bulbs are replaced with more efficient compact fluorescent bulbs, especially in low income homes. About 45 million energy-saving light bulbs will be provided to 11 million low income homes. Furthermore, safe disposal mechanisms for dangerous waste, such as mercury contained in incandescent light bulbs, will be created and utilized.
Incentives will be provided to promote replacement of old and inefficient refrigerators and air conditioning equipment. Vouchers and credit will be granted to consumers to replace approximately 1.7 million old and inefficient refrigerators and air conditioning units in the space of four years.
Finally, through a technical assistance program, it will improve the Energy Secretariat’s (SENER) capacity to promote activities and generate public awareness toward a more efficient use of energy.
“Mexico is both a great energy producer and exporter as well as one of the biggest energy consumers in the region. As a result, this is a strategic sector for the country’s economic growth, productivity and competitiveness,” explained Gustavo Saltiel, World Bank Sustainable Development Area Manager for Mexico. “Moreover, the efficient consumption of energy is a key element in strengthening long term electricity competitiveness and sustainability,” he added.
This innovative operation combines World Bank, CTF and GEF funds for the first time. The total cost of the project is more than US$700 million involving a combination of financial products, among them a US$250 million WB loan, US$127 million in financing from Nacional Financiera (NAFIN), a CTF concessional loan worth US$50 million, a GEF grant of US$7.12 million and US$102.7 million from the government counterpart. The remaining sum consists of consumer contributions.
The entities responsible for implementing the WB’s and CTF’s loans are SENER and NAFIN, respectively. The first one is a variable interest rate loan (6-Month LIBOR), plus a variable margin, with a 12-year maturity period and a 12-year grace period. The second one is a loan with a fixed annual rate of 0.75 percent, a 20-year maturity period and a 10-year grace period. The project is expected to end on June 30th, 2014.
Gulf of Mexico Environmental Agenda Grant
This US$4.5 million GEF grant for the Gulf of Mexico Coastal Wetlands Climate Change Impact Adaptation Project will be executed by the WB and seeks to promote its adaptation to the effects of climate change.
The program will be carried out through pilot mechanisms to generate information on the costs and benefits of undertaking concrete actions to reduce coastal vulnerability. One of the program’s challenges is to coordinate across different government levels. To that end, mechanisms need to be drawn up to report on the adaptation process for environmental protection, as well as key economic activities such a water generation, fishing and agriculture.
Some of the expected results include:
- Design studies to guide adaptation mechanisms that facilitate prompt implementation and include a monitoring strategy and supply system;
- Three wetland management plans, one of them to be implemented in protected areas;
- Persuade municipalities to declare 15,000 hectares as conservation areas; reforest 5,000 hectares with native species to reduce the impact of climate change on coastal wetlands; and build 3,000 meters of coastal embankments to reduce the threat of sea level rises; and
- Elaborate and publish practical guidelines on the costs and benefits relating to the adaptation mechanisms for coastal wetlands, as an example worthy of imitation.
The entities responsible for implementing this grant are the National Ecological Institute (INE) and the Mexican Institute of Water Technologies (IMTA). The National Public Works and Services Bank (BANOBRAS) has been designated as financial agent. It will be implemented across a five-year period and will have a total cost of US$23.5 million, US$4.5 million of which will be financed by the GEF grant, US$1.9 million will come from the Government of Japan and US$17.1 million from the government counterpart. The project is expected to end on October 31st, 2015.
The strategic partnership between Mexico and the World Bank on climate change issues started in the mid-90s and envisages a comprehensive program of financial, knowledge and coordination services. The package includes 35 initiatives between loans, grants, greenhouse gas emission-reduction certificates and other financial instruments.
About the Global Environmental Facility (GEF) and the World Bank
The Global Environmental Facility is a mechanism that provides grants and funds with the intention of achieving global environmental benefits in six focal areas: climate change, biodiversity, international waters, persistent organic pollutants, land degradation and ozone layer reduction. The GEF also supports the work of global agreements to combat desertification.
The World Bank Group is one of the GEF’s implementing agencies and helps countries prepare projects that are cofinanced by the GEF, as well as supervising their implementation. The Bank plays a primary role in ensuring the development and administration of investment projects. It relies on its experience of investing in eligible countries to promote investment opportunities and mobilize private-sector, bilateral, multilateral, governmental and non-governmental resources that are consistent with GEF objectives and different national sustainable development strategies.
The Psychology Behind a Strong Security Culture in the Financial Sector
By Javvad Malik, Security Awareness Advocate at KnowBe4
Banks and financial industries are quite literally where the money is, positioning them as prominent targets for cybercriminals worldwide. Unfortunately, regardless of investments made in the latest technologies, the Achilles heel of these institutions is their employees. Often times, a human blunder is found to be a contributing factor of a security breach, if not the direct source. Indeed, in the 2020 Verizon Data Breach Investigations Report, miscellaneous errors were found vying closely with web application attacks for the top cause of breaches affecting the financial and insurance sector. A secretary may forward an email to the wrong recipient or a system administrator may misconfigure firewall settings. Perhaps, a user clicks on a malicious link. Whatever the case, the outcome is equally dire.
Having grown acutely aware of the role that people play in cybersecurity, business leaders are scrambling to establish a strong security culture within their own organisations. In fact, for many leaders across the globe, realising a strong security culture is of increasing importance, not solely for fear of a breach, but as fundamental to the overall success of their organisations – be it to create customer trust or enhance brand value. Yet, the term lacks a universal definition, and its interpretation varies depending on the individual. In one survey of 1,161 IT decision makers, 758 unique definitions were offered, falling into five distinct categories. While all important, these categories taken apart only feature one aspect of the wider notion of security culture.
With an incomplete understanding of the term, many organisations find themselves inadvertently overconfident in their actual capabilities to fend off cyberthreats. This speaks to the importance of building a single, clear and common definition from which organisations can learn from one another, benchmark their standing and construct a comprehensive security programme.
Defining Security Culture: The Seven Dimensions
In an effort to measure security culture through an objective, scientific method, the term can be broken down into seven key dimensions:
- Attitudes: Formed over time and through experiences, attitudes are learned opinions reflecting the preferences an individual has in favour or against security protocols and issues.
- Behaviours: The physical actions and decisions that employees make which impact the security of an organisation.
- Cognition: The understanding, knowledge and awareness of security threats and issues.
- Communication: Channels adopted to share relevant security-related information in a timely manner, while encouraging and supporting employees as they tackle security issues.
- Compliance: Written security policies and the extent that employees adhere to them.
- Norms: Unwritten rules of conduct in an organisation.
- Responsibilities: The extent to which employees recognise their role in sustaining or endangering their company’s security.
All of these dimensions are inextricably interlinked; should one falter so too would the others.
The Bearing of Banks and Financial Institutions
Collecting data from over 120,000 employees in 1,107 organisations across 24 countries, KnowBe4’s ‘Security Culture Report 2020’ found that the banking and financial sectors were among the best performers on the security culture front, with a score of 76 out of a 100. This comes as no surprise seeing as they manage highly confidential data and have thus adopted a long tradition of risk management as well as extensive regulatory oversight.
Indeed, the security culture posture is reflected in the sector’s well-oiled communication channels. As cyberthreats constantly and rapidly evolve, it is crucial that effective communication processes are implemented. This allows employees to receive accurate and relevant information with ease; having an impact on the organisation’s ability to prevent as well as respond to a security breach. In IBM’s 2020 Cost of a Data Breach study, the average reported response time to detect a data breach is 207 days with an additional 73 days to resolve the situation. This is in comparison to the financial industry’s 177 and 56 days.
Moreover, with better communication follows better attitude – both banking and financial services scored 80 and 79 in this department, respectively. Good communication is integral to facilitating collaboration between departments and offering a reminder that security is not achieved solely within the IT department; rather, it is a team effort. It is also a means of boosting morale and inspiring greater employee engagement. As earlier mentioned, attitudes are evaluations, or learned opinions. Therefore, by keeping employees informed as well as motivated, they are more likely to view security best practices favourably, adopting them voluntarily.
Predictably, the industry ticks the box on compliance as well. The hefty fines issued by the Information Commissioner’s Office (ICO) in the past year alone, including Capital One’s $80 million penalty, probably play a part in keeping financial institutions on their toes.
Nevertheless, there continues to be room for improvement. As it stands, the overall score of 76 is within the ‘moderate’ classification, falling a long way short of the desired 90-100 range. So, what needs fixing?
Towards Achieving Excellence
There is often the misconception that banks and financial institutions are well-versed in security-related information due to their extensive exposure to the cyber domain. However, as the cognition score demonstrates, this is not the case – dawdling in the low 70s. This illustrates an urgent need for improved security awareness programmes within the sector. More importantly, employees should be trained to understand how this knowledge is applied. This can be achieved through practical exercises such as simulated phishing, for example. In addition, training should be tailored to the learning styles as well as the needs of each individual. In other words, a bank clerk would need a completely different curriculum to IT staff working on the backend of servers.
By building on cognition, financial institutions can instigate a sense of responsibility among employees as they begin to recognise the impact that their behaviour might have on the company. In cybersecurity, success is achieved when breaches are avoided. In a way, this negative result removes the incentive that typically keeps employees engaged with an outcome. Training methods need to take this into consideration.
Then there are norms and behaviours, found to have strong correlations with one another. Norms are the compass from which individuals refer to when making decisions and negotiating everyday activities. The key is recognising that norms have two facets, one social and the other personal. The former is informed by social interactions, while the latter is grounded in the individual’s values. For instance, an accountant may connect to the VPN when working outside of the office to avoid disciplinary measures, as opposed to believing it is the right thing to do. Organisations should aim to internalise norms to generate consistent adherence to best practices irrespective of any immediate external pressures. When these norms improve, behavioural changes will reform in tandem.
Building a robust security culture is no easy task. However, the unrelenting efforts of cybercriminals to infiltrate our systems obliges us to press on. While financial institutions are leading the way for other industries, much still needs to be done. Fortunately, every step counts -every improvement made in one dimension has a domino effect in others.
Has lockdown marked the end of cash as we know it?
By James Booth, VP of Payment Partnerships EMEA, PPRO
Since the start of the pandemic, businesses around the world have drastically changed their operations to protect employees and customers. One significant shift has been the discouragement of the use of cash in favour of digital and contactless payment methods. On the surface, moving away from cash seems like the safe, obvious thing to do to curb the spread of the virus. But, the idea of being propelled towards an innovative, digital-first, cashless society is also compelling.
Has cashless gone viral?
Recent months have forced the world online, leading to a surge in e-commerce with UK online sales seeing a rise of 168% in May and steady growth ever since. In fact, PPRO’s transaction engine, has seen online purchases across the globe increase dramatically in 2020: purchases of women’s clothing are up 311%, food and beverage by 285%, and healthcare and cosmetics by 160%.
Alongside a shift to online shopping, a recent report revealed 7.4 million in the UK are now living an almost cashless life – claiming changing payment habits has left Britons better prepared for life in lockdown. In fact, according to recent research from PPRO, 45% of UK consumers think cash will be a thing of the past in just five years. And this UK figure reflects a global trend. For example, 46% of Americans have turned to cashless payments in the wake of COVID-19. And in Italy, the volume of cashless transactions has skyrocketed by more than 80%.
More choice than ever before
Whilst the pandemic and restrictions surrounding cash have certainly accelerated the UK towards a cashless society, the proliferation of local payment methods (LPMs) in the UK, such as PayPal, Klarna and digital wallets, have also been a key driver. Today, 31% of UK consumers report they are confident using mobile wallets, such as Apple Pay. Those in Generation Z are particularly keen, with 68% expressing confidence using them.
As LPM usage continues to accelerate, the use of credit and debit cards are likely to decline in the coming years. Whilst older generations show an affinity with plastic, younger consumers feel less secure around its usage. 96% of Baby Boomers and Generation X confirmed they feel confident using credit/debit cards, compared to just 75% of Generation Z.
Does social distancing mean financial exclusion?
As we hurtle into a digital age, leaving cash in the rearview, there are ramifications of going completely cashless to consider. We must take into consideration how removing cash could disenfranchise over a quarter of our society; 26% of the global population doesn’t have a traditional bank account. Across Latin America, 38% of shoppers are unbanked, and nearly 1 in 5 online transactions are completed with cash. While in Africa and the Middle East, only 50% of consumers are banked in the traditional sense, and 12% have access to a credit card. Even here in the UK, approximately 1.3 million UK adults are classed as unbanked, exposing the large number of consumers affected by any ban on cash.
Even when shopping online – many consumers rely on cash-based payments. At the checkout page, consumers are provided with a barcode for their order. They take this barcode (either printed or on their mobile device) to a local convenience store or bank and pay in cash. At that point, the goods are shipped.
There are also older generations to consider. Following the closure of one in eight banks and cashpoints during Coronavirus, the government faced calls to act swiftly to protect access to cash, as pensioners struggled to access their savings. Despite the direction society is headed, there are a significant number of older people that still rely on cash – they have grown up using it. With an estimated two million people in the UK relying on cash for day to day spending, it is important that it does not disappear in its entirety.
Supporting the transition away from cash
Cashless protocols not only restrict access to goods and services for consumers but also limit revenue opportunity for merchants. While 2020 has provided the global economy with one great reason to reduce the acceptance of cash, the payments industry has billions of reasons to offer multiple options that cater to the needs of every kind of shopper around the world.
Whilst it seems younger generations are driving LPM adoption, it is important that older generations aren’t forgotten. If online shops fail to offer a variety of preferred payment methods, consumers will not hesitate to shop elsewhere. With 44% of consumers reporting they would stop a purchase online if their favourite payment method wasn’t available – this is something merchants need to address to attract and retain loyal customers.
UnionPay increases online acceptance across Europe and worldwide with Online Travel Agencies
- UnionPay International today announces that two of Europe’s leading travel companies, Logitravel and Destinia, have started accepting UnionPay.
- This acceptance will enable users of the groups’ travel websites to make purchases using UnionPay payment methods.
The acceptance partnerships between the OTAs and UnionPay began in July 2020 for customers across 13 European countries and another 90 countries and regions worldwide. The European countries covered by the agreements include the UK, Germany, France, Italy, Spain, Portugal, Norway, Denmark, Sweden, Austria, Switzerland, Hungary and Ireland. The brands covered by these acceptances include Logitravel.com and Destinia.com which together deliver more than 8.5 million worldwide travel bookings each year covering flights, hotels, holidays, car hire and other experiences.
With over 8.4 billion cards issued in 61 countries and regions worldwide, UnionPay has the world’s largest cardholder base and is the preferred payment brand for many Chinese and Asian expatriates and students based in Europe, as well as an increasing number of global customers. These cardholders are also particularly attractive to the two OTAs. Despite the impact of Covid-19, Logitravel and Destinia expect to see the demand for travel across the European continent as well as that between Europe and Asia return to growth in the coming years. They are now placing significant focus on offering more payment options and smoother payment services to meet this demand.
The partnerships incorporate UnionPay’s ExpressPay and SecurePlus technology, which will ensure seamless transactions for the customers, contained within a single process through the relevant websites. UnionPay’s technology also provides for the requirement to authenticate transactions under the EU regulation Payment Services Directive 2 (PSD2) ensuring that sites will be compliant as soon as the relevant countries apply the requirements.
Wei Zhihong, UnionPay International’s Market Director, said: “This is a major partnership with two of Europe’s leading online travel companies. Logitravel and Destinia are brands which have been at the forefront of e-commerce for many years and we are very excited to be working with them to extend their reach to new audiences. This highlights the work that we have carried out in ensuring that our technology provides effective solutions for the biggest e-commerce sites both in Europe and around the world. We look forward to announcing many more similar agreements in the near future.”
Jesús Pons, Chief Financial Officer at Logitravel Group said: “UnionPay has always been on our radar, and since travel has become a crucial part of its development, Logitravel felt it important to develop this important partnership. It really was an obvious decision for Logitravel since both companies share a passion for e-commerce and emphasising the payment experience for their customers.”
Ricardo Fernández, Managing Director at Destinia Group said: “We believe that this is the beginning of a really strong relationship. Our discussions with UnionPay in reaching this partnership have demonstrated their understanding of the needs of major online merchants and their ability to deliver the highest quality systems. We look forward to working together on further partnership as we move forward.”
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