News In Brief 13 March 2017


According to Carbon Brief, an analysis of government figures shows that the collapse in the use of coal has driven UK carbon emissions down to levels barely seen since the Victorian era. Carbon emissions in 2016 reached 381 millions of tonnes (Mt) of CO2. With the exception of sharp dips caused by general strikes in the 1920s, this represents the lowest level since 1894. Coal use fell by a record 52% in 2016 year-on-year thanks in part to cheap gas, higher domestic carbon prices, and an increase in use of renewables. One of the main reasons for the drop in coal use is the carbon price floor. This carbon tax doubled in 2015 to £18 per tonne of CO2. Coal use has fallen by 74% since 2006 and is now 12 times below the peak of 221 millions of tonnes (Mt) burnt in 1956.


Charity Bank is opening a ‘Charity Bank Ethical Cash ISA’, with a 0.9% interest rate. As with other ISAs, the Ethical Cash ISA allows people to save up to £15,240 a year (2016/17 tax year allowance) with a minimum opening balance of £250, and is open to transfers-in from current ISA managers. It has a 33-day notice period; and is available to UK residents aged 16 and over. Charity Bank conducted research into the attitudes of the public towards various aspects of banking and believes that, on the basis of this: 74% of the British public don’t know how the money they save in their bank is being used or invested; 71% would like their bank to make it clearer where their money is invested; 56% would like to be offered an ethical option when choosing a savings account; and 61% would consider opening a savings account that paid a fair rate of interest and lent money to charities and other good causes.


The World Bank raised its first bond linked to the United Nations’ Sustainable Development Goals. The returns on the €163 million two-tranche issue are linked to an index of 50 companies that have been identified as making a significant contribution to the advancement of the UN’s sustainable development agenda. The agenda was adopted by UN member states in late 2015 and includes 17 separate Sustainable Development Goals (SDGs), ranging from an end to poverty, access to clean water, gender equality and climate action. A €106.8 million 15-year tranche sees all returns delivered at maturity to reflect index performance from the initial level to an average over years 10 and 15. The €56.8 million 20-year part pays a fixed 1.2% coupon for the first 10 years, with the remaining 10 years paid out via a coupon reflecting the best performance of the index between years five and 10 over an average of the preceding five years.


The Dutch financial group ING published a detailed report suggesting that using circular economy methods in regions of the world that are facing water stress might reduce consumption by 412 billion cubic metres a year. That, says ING, is equivalent to 11% of global demand for water. Global fresh water demand is expected to grow by 2% each year over the coming decades, and will outstrip the sustainable water supply in 2040 by 35% if no changes are made, according to some assessments.


The Scottish Government has granted planning consent for an eight turbine, six megawatt (MW) offshore wind farm off the coast of Aberdeen. The Kincardine Offshore Windfarm, a floating facility, will have a capacity of as much as 50 MW and is set to support roughly 110 jobs through assembly, installation and ongoing operations and maintenance activities. In addition, it will help to prevent over 94,500 tonnes of CO2 emissions annually. It will produce enough electricity to power almost 56,000 homes.


The investment company Standard Life is to take over Aberdeen Asset Management in an all-share deal worth £3.8 billion. Standard Life shareholders will end up owning two-thirds of the combined company. Shortly after the deal David Cumming, head of equities at Standard Life’s asset management division and reportedly an “outspoken critic of poor corporate governance standards” departed. In an acerbic but penetrating article in the FT Merryn Somerset Webb commented that scale in the asset management business is not necessarily good news for the consumer; that new entrants to the business have “automatically turned to passive funds to make their businesses work for consumers” and that “the existence of the new kid lays bare the shoddy but oddly enduring business model of the average active fund manager (overcharge, underperform and assume dimwit end investor won’t notice)”.



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