Aidan Bell, co-founder of sustainable business EnviroBuild.
Modern sustainability today is generally seen in three pillars; economic, environmental and social. Economic sustainability has always been seen as an important part of business growth. Sustainability in this instance is remaining commercially viable and being able to sustain operations in the face of unexpected events.
Social sustainability means it should have the support and approval of its community, such as employees and stakeholders. Although these both fit within corporate sustainability, historically environmental sustainability and business growth are often discussed as if they’re on separate ends of the spectrum.
In fact, a misconception exists suggesting that being ecologically aware or investing in environmental sustainability as a business is something that works directly against profit and growth. In turn, these assumptions are linked to things commonly associated with business, such as innovation and disruptive strategies. This means that sustainability continues to be seen as something entirely separate from innovation and progressive strategies within global business.
Where does this come from?
Historically the driver of business decisions and the only measure of success was financial shareholder value.
Legally this is still the case within the Anglo-Saxon governance system, so therefore it’s easier to appeal sustainability and ecological factors to corporations by presenting the economic gains and commercial opportunities that can come to a business from being focused on environmental sustainability. Although this may seem counter-intuitive as these motivations are driven purely on financial profit, any changes towards genuine sustainability should only be seen as positive.
Only third sector charitable companies, philanthropic organisations or smaller companies (where the founder has control and had their own altruistic reasons for sustainability) have historically looked at sustainability.
The world is changing
However, the world and business globally is changing. Green issues have become of increasing importance, environmental laws have been implemented and companies are now adopting their own green pacts and responsibilities. CSR (Corporate Social Responsibility) came along and companies begun taking their branding and sustainable image seriously.
Uniquely Indian law now stipulates a CSR legislation that companies have to give a minimum of 2% of their profits back to charitable causes. However, this legislation creates a focus on expenditure rather than outcome. In fact, it often results in spending primarily in locations where the spend is most likely to result in increased business for the companies donating. Another criticism is that it is allowing the government to relax their own social responsibility towards the rural poor, something that should be considered if this was to become commonplace in other companies internationally.
Generally however, CSR is often related to creation of a better brand image, effectively part of a marketing budget. There are examples beyond this, but bringing it central to a businesses core has never truly troubled the Fortune 500.
Today, the consumer is more aware than ever of the importance of environmental sustainability. As the realisation kicks in that bringing sustainability central to your brand can actually increase performance, many companies are using this ‘green’ USP as a selling point which is changing consumer behaviour. For example, a 2016 Morgan Stanley survey on consumer buying habits and ethics showed that when choosing apparel retailers, 51% of respondents think that ethical credentials are important.
The workforce is increasingly mobile and there is an ever increasing battle for talent. Employees, particularly those with talent and correspondingly with the greatest choice of employers, wish to feel part of something greater than themselves. Companies are not slow to recognise value and this is being seen as an equal driver of business decisions.
Business benefits for sustainability
It’s important to remember that innovation is integral to sustainability and the two can work in partnership, such as innovative companies that now exist which support the inclusion of environmentalism in business. For example, environmental accounting now is an innovative practice which serves to increase the profit margin when applied properly. Companies themselves can practise the novel approach of environmental accounting which aims at identifying inefficiency due to excessive waste or poor use of input within the value chain.
Today, companies are being created which are doing good as part of an organisation’s core offering rather than as an ‘afterthought’ or as a marketing strategy. These kind of companies inevitably can create better revenue growth into sustainable programs. For example, according to The Financial Times, there is evidence that investment funds which observe environmental and social standards in their strategies tend to outperform those that don’t.
We know that in order to stand out in the changing landscape, companies need to think about their sustainable practises in terms of their economic growth, not aside from it. Many businesses may find that integration of these strategies in fact this creates the need to think innovatively, use imagination and creativity to redesign their goals; all factors which will inevitably lend themselves as beneficial to other commercial areas of the business.
It’s also inevitably true that innovation of what constitutes shareholder value is easier in companies where a few individuals can exert large control. It is easier for a company like Facebook, Amazon, Alphabet or any start-up to innovate in this regard than GE or JP Morgan Chase.
Growth and sustainability
Perpetual growth is incompatible with the finite world we live in. Although many argue capitalism can go hand in hand with sustainability, the creation of products and services requires the use of natural resources and therefore will always come at an environmental cost. The principles of “limitless economic growth” directly counters the idea of sustainability. In business, growth must sustain growth, meaning resources must continue to be used in order to keep this up infinitely. We currently use resources three times faster than they are replaced by the Earth, which is clearly unsustainable.
We understand within society and within business that we rely on ecological and environmental resources in order to survive on the planet. However, these points are often forgotten in the midst of the individual search for short-term fulfillment through economic growth and materialistic need.
How can we make a change?
Step changes generally come through technological changes and the solution to the above conundrum isn’t on the near horizon. It is imperative that the financial motive be leveraged to develop. This could be achieved by government mandated valuation of the economic “externalities” of waste, pollution, global warming like the EU attempts at placing a price upon Co2. This is obviously a supra-governmental issue and not one that an individual corporation answerable to shareholders can easily navigate.
We live in a time where economic growth is seen as far more important than the detrimental effects that the burning of fossil fuels has on the environment, as well as the eventual implication of limited resources. Another solution then would be for society to reassess what it defines as shareholder value, however, that feels unlikely as it requires even more people to agree upon something. It is the global poor who will suffer most dramatically, but who have the least say in any of the solutions. It is deeply ironic that the method most effective to resisting climate change as an individual is ensuring that you have the money to do so
Using payments to streamline everyday transport
By Venceslas Cartier, Global Head of Transportation & Smart Mobility at Ingenico Enterprise Retail
Once upon a time the only way to get from A to B on public transport was with cash – and likely a pre-paid ticket bought from a physical office. Nowadays, thanks to technological developments, options range from contactless and mobile payments, to in-app tickets and more. As payment methods advance, consumers and merchants are naturally moving towards Mobility as a Service (MaaS) systems, integrating various forms of transport services into a single mobility service, accessible on demand.
This move towards MaaS does not only streamline the consumer experience, it has other positive impacts too. Incentivising public transport use reduces environmental pollution, improves mental wellbeing by reducing travel-related stress, and aids productivity by freeing up time otherwise spent driving. With this in mind, let’s take a look at the current trends affecting the transport sector, as well as how payments can optimise transportation for both operators and consumers alike.
Optimising transport with payments
The payment process is integral to any service. A payment service provider (PSP) can provide a range of key benefits to operators by proving a gateway to the transportation open payment ecosystem, and ensuring they meet objectives in 3 key areas.
- Environmentally, by reducing the use of personal cars and alleviating pollution and congestion.
- Societally, making urban mobility more inclusive in terms of improving access to all areas and for all socioeconomic classes.
- Economically, by optimising investment in eco-structure and fostering financial transactions, therefore improving the wealth of the city.
Payments professionals’ expertise and technological solutions can make payments easy again for transport operators. They can provide a range of options so that the customer can choose which one is right for them, leveraging the capabilities of the mobility services’ infrastructure (contactless, mobile wallets, P2P, closed-loop, QR code, and blockchain).
Furthermore, they can help promote inclusion and sustainable urban development. For example, methods such as prepaid virtual cards, or mobility accounts linked to a prepaid account can reduce the risks of excluding the unbanked. The environmental impact per kilometre can also be reduced, along with the use of vehicles with lower emissions per person per kilometre.
Finally, PSPs can put merchants’ minds at ease, providing payment liability, allowing aggregation of all due amounts from all mobility service providers, and collecting payments in one single transaction from users while dispatching revenue between mobility service providers.
COVID-19’s disruption to the travel industry cannot be overlooked. In fact, research suggests that public transit ridership is down 70% across the globe since the onset of the virus, longer distance travel has seen reductions of up to 90%, and payment by cash has seen a 60% drop.
Being realistic, these behavioural shifts are unlikely to revert anytime soon, so it’s important for merchants to keep this in mind when thinking about payment methods. More than 70% of consumers and travellers say they are likely to avoid the use of cash over the next six months. As a result, more than 40 countries have already raised their contactless payment threshold, further helping consumers to avoid contact with frequently touched pin pads.
However, the pandemic has only accelerated the way things were heading already and highlighted the benefits. Within the context of the pandemic, transportation needs to reinvent itself and adapt its processes to suit the shift in commuter habits that we’ve already seen and will continue to see in the future.
Other trends to keep an eye on
Contactless has been steadily growing on the transport scene, as have mobile payments and in-app purchases. In fact, the recent move to mobile and online ticketing is the most promising method so far, having seen significant growth in the last few years and having been accelerated by COVID-19 as discussed above. Once consumers move to these easy, convenient, and seamless methods, it’s rare that they revert – so it’s a good idea for operators to think how they can cater to these preferences.
Speed and convenience are a must for busy travellers – but not at the expense of data security. Finding the right payments partner is therefore crucial so operators can safeguard their customers’ personal data, while also keeping on top of other security regulations/features such as P2P encryption, PCI certification, and tokenisation.
Next steps for operators
Public transport is essential for many peoples’ everyday lives – COVID-19 or no COVID-19. As such, mobility service providers can make a great difference to their service and operations by implementing the right solutions.
Grey skies ahead – Malta prepares for a gloomy 2021 if they can’t tackle financial crime
By Dhanum Nursigadoo, ComplyAdvantage
With the summer drawing to a close, many countries who rely significantly on warm weather tourism will be assessing the impact of Covid-19. Being a small island in the middle of the Mediterranean you would expect Malta to be taking a significant economical hit – just like we are seeing in other popular European holiday destinations – but this doesn’t take into account the strength of the Maltese economy.
Emerging from the eurozone crisis with one of the most dynamic economies strategically positioned between three continents, Malta has had one of the lowest unemployment rates in the EU and has recently seen its GDP growth expand year-on-year. But perhaps the most important aspect of the Maltese economy has been its attraction for foreign businesses with only a 5% tax on profits. It is no secret that Malta is a tax haven, probably one of the most effective tax havens in the world.
But you can’t pick and choose who takes shelter, and it’s no secret that money launderers have been taking advantage of the regulatory landscape in this archipelago.
The conditions of a tax haven suit criminal enterprises, who can take advantage of the opaque environment and blend their illegal activities with the same operations enjoyed by high net worth individuals and corporations who are looking to reduce their tax bill. And last year Malta’s keenness for secrecy and avoidance resulted in a damning report by Moneyval – the Council of Europe’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) body – which found that while the nation had made some efforts to curb money laundering there was still much to be desired in order to bring the tax haven up to standard. Overall, they were of the opinion that Malta viewed combating money laundering as a non-priority and this resulted in branding Malta with low to partial ratings for 30 out of the 40 Financial Action Task Force (FATF) recommendations.
The findings of the report were stated to have the potential to “create within the wider public the perception that there may exist a culture of inactivity or impunity”. This follows on from a series of international high-profile stories regarding Malta and financial crime. Most shocking was the murder of journalist Daphne Caruana Galizia – who investigated corruption and money laundering in her native country – and was killed by a car-bomb three years ago leading to international outrage and condemnation.
Now Malta is in a race against time to turn their reputation around or they will suffer genuine consequences. The FATF have threatened to place Malta on a “greylist” of high-risk jurisdictions unless they have shown a genuine commitment to combatting financial crime and implemented the recommendations of the Moneyval report. If they fail, this would make Malta the first EU country to make the list and join others such as Panama, Syria and Zimbabwe.
The pandemic has actually given Malta more time to meet these obligations, and it has been widely reported that an initial summer deadline has now been moved to October due to the widespread disruption.
As we head into the autumn, there are signs that Malta has begun to take action. The Malta Financial Services Authority (MFSA) has created and established an empowered AML now headed up by Anthony Eddington, formerly of the UK’s Financial Conduct Authority and who has previous experience of tackling anti-financial crime at Deutsche Bank. This team has already begun working closely with international experts, specifically partners in the US through the US embassy in Malta and the United States Commodities Futures Trading Commission (CFTC). In May this collaboration led to 25 new cases focused on money laundering in particular, and with plans to increase standard inspections and on-site investigations into businesses in Malta, it appears there is a change to the country’s priorities.
Importantly, the report highlighted a problem for countries that choose to become tax havens. In some cases it was not that the Maltese authorities deliberately turned a blind-eye, but simply that they did not have the necessary knowledge to effectively tackle financial crime in the first place. Law enforcement appeared unable to even recognise when crime was occurring.
But this blurring of financial compliance will not help businesses if Malta does indeed become “greylisted” this year. While not as devastating as being blacklisted (the two occupants of this list are Iran and North Korea) there are significant detrimental effects to being put on the FATF greylist. Although this signals that the country is committed to developing AML/CFT plans (unlike the blacklist) it still sends out a warning signal to the world that this is a high-risk area, with the country in question subject to increased monitoring and potential sanctions from the IMF and the World Bank. Make no mistake, being put on the greylist will be catastrophic for Malta’s economy.
It remains to be seen how the work to avoid such a calamity will affect Malta’s tax haven status. Perhaps with an increased fight against financial crime there will be less ability to defend one of Europe’s most competitive tax regimes. But if Malta does not show they are genuinely committed to tackling this problem, then the pandemic disruption to the island’s tourism may be minor in comparison to the grey clouds that now approach their shores.
How will the UK prepare a supply chain for the distribution of the Covid-19 vaccines?
By Don Marshall, Marketing role at Exporta.
The challenge of mobilising a supply chain for the introduction of a global and nationwide vaccine will be enormously complex. The process will be costly, and it’s likely the figures will stretch to the hundreds of millions for both the production of the vaccine itself and its distribution across the UK. We must prepare and plan a supply chain strategy to ensure it reaches those most in need in a timely and safe manner.
The task of immunising a whole population is something that has never been planned or likely imagined by anyone within a standard supply chain. A supply chain that goes directly from the manufacturer to the end consumer, or user/ patient in this case, is complex and goes beyond the scope of any single logistics company. It would have to be conceived and delivered via a large joint effort and collaboration between multiple organisations. Effectively distributing the vaccine will depend on the source of manufacture, its storage requirements, and protection of the vaccines from manufacture through to patient administration.
The majority of vaccines require storage within a specific temperature range and need to be handled safely and in hygienic conditions. Depending on where the vaccines are manufactured, the transport legs will vary; if they are coming from overseas, air freight will increase cost and complexity. In addition to supplying the vaccine, syringes, needles and containers also need to be taken into account when preparing the supply chain.
Securing the specific types of boxes or containers i.e. the lidded containers normally used for transporting pharmaceutical products will mean acquiring them from all available stockists and manufacturers. Delivery vehicles would then need to be considered, with temperature-control factored in. The medical supply chain can inform their approach to distribution by assessing data from previous supply chains, and how large quantities of vaccines have been sent out in the past. Collating successful vaccine delivery examples from other parts of the world would be advantageous here, the more we can do to prepare for a logistical challenge of this magnitude, the better.
The distribution of this COVID vaccine will be unique in its scale and for that reason, additional supply chains will need to be mobilised. Apart from medical supply chains, those best suited for this type of transportation are the fresh/frozen food industries and supermarkets. I would mobilise these businesses to assist with the vaccine’s distribution wherever possible and use their car parks and facilities for the temporary medical centres needed to administer the vaccine to the public.
Using the food industry and supermarket networks would leave the current pharmaceutical supply chains intact for health services, pharmacies and the NHS. It would protect those vital services and continue to serve communities across the UK. Inevitably, it would place a short term strain on food supply chains, but these are supply chains that are well-equipped and versed in coping with excess demand i.e. the spike endured from the brief spell of public panic buying at the start of the crisis. With adequate resourcing and planning, I believe the UK supply chain can and will handle this challenge.
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