A group of Germany’s biggest companies on Monday called for state aid to alleviate the economic impact of the coronavirus pandemic to be tied to action on climate change.
More than 60 companies including ThyssenKrupp, Bayer, Allianz and Deutsche Telekom signed a letter pushing German Chancellor Angela Merkel to pursue an ambitious post-crisis policy focussed on cutting emissions.
"We appeal to the federal government to closely link economic policy measures to overcome both the climate crisis and the coronavirus crisis," the companies said ahead of the annual Petersberg climate dialogue which began on Monday.
The leaders of 30 nations convened for the annual conference, held online this year due to the pandemic, with the aim of keeping up commitment to the Paris Climate agreement.
Under the landmark 2015 accord, 189 nations committed to working to stop global temperatures from rising beyond 2 degrees Celsius above pre-industrial levels.
But some of the giants of German industry are concerned that environmental issues will be neglected due to the almost unprecedented economic damaged caused by the virus.
Car manufacturers are already lobbying to prevent the announced tightening of emissions limits on cars,
Airlines, which have been devastated by the pandemic, are also asking for a waiver on jet fuel taxes, and the plastics industry is appealing bans on some products put in place after 2015.
"The pandemic highlights the vulnerability of our globalised economic system to threats that are not limited to regions or industries," the appeal read. "Climate change is a comparable challenge."
The head of ThyssenKrupp's steel unit, Bernhard Osburg, called for a climate economic stimulus programme, while Joerg Fuhrmann, chief executive at Salzgitter, said the state should encourage the replacement of coal with hydrogen in steelmaking.
Markus Steilemann, head of plastics maker Covestro said: "It is about making our economy more crisis-resistant and competitive with a view to a truly sustainable, climate-neutral future."
The German BDI industry association said it was sticking to the European goal of climate neutrality, or net zero greenhouse gas emissions, in 2050, but warned that governments, companies and households will in future have reduced scope for investments.
"The EU's Green Deal must therefore become a Smart Deal, in which growth, employment and ambitious climate protection targets are linked as efficiently as possible via an intelligent investment and relief package," said BDI deputy managing director Holger Loesch.
Germany’s environment minister Svenja Schulze on Monday signalled that green stimulus was not yet a priority as the country is still struggling to overcome the coronavirus crisis.
“Right now we’ve a real crisis and in a first step we must help companies survive,” Ms Schulze said, noting, however, that climate-protection discussions were beginning.
Chancellor Merkel’s cabinet has pledged more than 1 trillion euros (Dh3.98 trillion) to stem economic collapse from the pandemic. But it has shown reluctance to commit to fresh finance on longer-term public programs before the crisis subsides.
The German economy is poised to shrink the most since Second World War as a result of the pandemic.
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4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
What's in the deal?
Agreement aims to boost trade by £25.5bn a year in the long run, compared with a total of £42.6bn in 2024
India will slash levies on medical devices, machinery, cosmetics, soft drinks and lamb.
India will also cut automotive tariffs to 10% under a quota from over 100% currently.
Indian employees in the UK will receive three years exemption from social security payments
India expects 99% of exports to benefit from zero duty, raising opportunities for textiles, marine products, footwear and jewellery
Killing of Qassem Suleimani
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
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