A protestor wearing a face mask holds a sign during a demonstration against climate change in Augsburg, Germany.  Investors should engage directly with companies on relevant, material ESG issues such as climate change, says State Street Global Advisors' Carlo Funk. Reuters
A protestor wearing a face mask holds a sign during a demonstration against climate change in Augsburg, Germany.  Investors should engage directly with companies on relevant, material ESG issues such Show more

How Covid-19 has highlighted the importance of ESG investing



The Covid-19 pandemic highlights how globally interconnected we are, especially in terms of commerce and trade. Where will this lead us when it comes to the value and adoption of ESG and climate investing and what are the implications for the Middle East?

Covid-19 has uncovered the importance of key ESG performance indicators for long-term value creation. The “S”, or social part, has often been perceived as rather vague and insignificant. This crisis proves this to be mistaken. Social and governance aspects including a company’s resilience and contingency planning ability, its ability to uphold commonly accepted workplace labour standards, and employee health and safety measures are crucial for long-term performance.

It has become clear that ESG issues are financially material for a company’s success, hence, the added value of integrating this data in portfolio structures and investment decision making becomes evident.

However, it’s not just the ‘S’ and ‘G’ in ‘ESG’ that are important. Environmental issues, particularly climate change, are also moving up the agenda.

Within the ESG space, climate change and its associated environmental and economic risks have been the dominant topic in recent times. Climate change can be described as a slow-burning pandemic with significant long-term impacts.

The Middle East and North Africa region is particularly vulnerable to the impact of climate change and the associated socioeconomic changes due to the importance of fossil fuel industries as well as relative water scarcity and population density.

Even before the pandemic, fossil fuel demand had been in decline as the role of renewables continues to grow and regulatory pressure over emissions tightens. Investors were starting to worry about financial risks, and governments were increasingly concerned about the public health impact of fossil fuel pollution and import dependency. In short, the sector was already vulnerable.

The subsequent Covid-19 crisis saw fossil fuel demand rapidly decline and some believe that it may never again surpass the peaks of 2019. Indeed, by the time the global economy recovers, most of the growth in energy demand may be met by renewable energy sources.

The impact of climate change and the energy transition therefore represent significant risks, both in the Middle East and globally, but also opportunities for investors.

Governments have an unprecedented ability to drive necessary change. They must oblige companies to avoid greenwashing and take real action.

In the wake of the pandemic, governments are enacting a huge series of stimulus packages to mobilise their economies and avoid a depression. Governments will have to make difficult decisions around fossil fuel subsidies and taxes, but equally, they will need to avoid bankruptcies and large-scale job losses. This presents an opportunity for governments and companies to ensure workers are retrained so they can contribute to the growing renewables revolution. This is especially significant for the Middle East.

This dynamic provides a perfect opportunity for governments to introduce and widen the scope of carbon pricing to shift the balance in favour of renewable energy. A carbon tax could stimulate much-needed employment and growth in the clean low-carbon industries and technologies that are needed to tackle climate change.

We keenly await the results of the US Presidential Election, in which Democratic nominee Joe Biden has proposed a $1.7 trillion climate plan including research and development in clean energy, and incentives to widen the adoption of renewable power and electric vehicles, which will have global implications that will certainly impact the Middle East. In the event that President Trump is re-elected, we would expect some measures to tackle the growing climate threat. In most areas of the world this is already well underway.

There are many ways for investors in the Middle East to address ESG and climate change within their portfolios. Investors can use a range of strategies depending on their investment, ESG and climate-related objectives, and risk tolerance, from exclusionary screening to impact investing.

Regarding climate change, we believe in an investment approach that incorporates both mitigation of greenhouse gas emissions and adaptation to the future impacts of climate change. These are complementary approaches to reducing climate risks and correspond with asset owners’ need to balance short and long-term risks and opportunities.

These include reducing exposure to above-average carbon emitters and ‘brown’ revenues from oil extraction or power generation and increasing exposure to ‘green revenues’ through companies that are adapting business models to climate risks.

Asset stewardship is another inextricable part of any ESG and climate investment approach. Investors should engage directly with companies on relevant, material ESG issues, particularly on the risks and opportunities presented by climate change.

The Covid-19 pandemic is an international emergency that has required swift and comprehensive measures by governments to safeguard public health. But when the crisis passes and the moment for sober reflection arrives, we will have a unique opportunity to transition to a cleaner, more sustainable future.

In this new world, ESG issues will only rise up the agenda for investors in the Middle East as they look to move away from fossil fuels that they have relied on for decades – and this transition is also an opportunity.

Carlo Funk is Europe, Middle East and Africa head of ESG Investment Strategy at State Street Global Advisors, a member of The Gulf Bond and Sukuk Association

 

 

COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
Roger Federer's 2018 record

Australian Open Champion

Rotterdam Champion

Indian Wells Runner-up

Miami Second round

Stuttgart Champion

Halle Runner-up

Wimbledon Quarter-finals

Cincinnati Runner-up

US Open Fourth round

Shanghai Semi-finals

Basel Champion

Paris Masters Semi-finals

 

 

THE BIG THREE

NOVAK DJOKOVIC
19 grand slam singles titles
Wimbledon: 5 (2011, 14, 15, 18, 19)
French Open: 2 (2016, 21)
US Open: 3 (2011, 15, 18)
Australian Open: 9 (2008, 11, 12, 13, 15, 16, 19, 20, 21)
Prize money: $150m

ROGER FEDERER
20 grand slam singles titles
Wimbledon: 8 (2003, 04, 05, 06, 07, 09, 12, 17)
French Open: 1 (2009)
US Open: 5 (2004, 05, 06, 07, 08)
Australian Open: 6 (2004, 06, 07, 10, 17, 18)
Prize money: $130m

RAFAEL NADAL
20 grand slam singles titles
Wimbledon: 2 (2008, 10)
French Open: 13 (2005, 06, 07, 08, 10, 11, 12, 13, 14, 17, 18, 19, 20)
US Open: 4 (2010, 13, 17, 19)
Australian Open: 1 (2009)
Prize money: $125m

What is dialysis?

Dialysis is a way of cleaning your blood when your kidneys fail and can no longer do the job.

It gets rid of your body's wastes, extra salt and water, and helps to control your blood pressure. The main cause of kidney failure is diabetes and hypertension.

There are two kinds of dialysis — haemodialysis and peritoneal.

In haemodialysis, blood is pumped out of your body to an artificial kidney machine that filter your blood and returns it to your body by tubes.

In peritoneal dialysis, the inside lining of your own belly acts as a natural filter. Wastes are taken out by means of a cleansing fluid which is washed in and out of your belly in cycles.

It isn’t an option for everyone but if eligible, can be done at home by the patient or caregiver. This, as opposed to home haemodialysis, is covered by insurance in the UAE.

MATCH INFO

Uefa Champions League semi-final, second leg result:

Ajax 2-3 Tottenham

Tottenham advance on away goals rule after tie ends 3-3 on aggregate

Final: June 1, Madrid

The rules of the road keeping cyclists safe

Cyclists must wear a helmet, arm and knee pads

Have a white front-light and a back red-light on their bike

They must place a number plate with reflective light to the back of the bike to alert road-users

Avoid carrying weights that could cause the bike to lose balance

They must cycle on designated lanes and areas and ride safe on pavements to avoid bumping into pedestrians

In 2018, the ICRC received 27,756 trace requests in the Middle East alone. The global total was 45,507.

 

There are 139,018 global trace requests that have not been resolved yet, 55,672 of these are in the Middle East region.

 

More than 540,000 individuals approached the ICRC in the Middle East asking to be reunited with missing loved ones in 2018.

 

The total figure for the entire world was 654,000 in 2018.

COMPANY%20PROFILE
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THE SPECS

Engine: 6.75-litre twin-turbocharged V12 petrol engine 

Power: 420kW

Torque: 780Nm

Transmission: 8-speed automatic

Price: From Dh1,350,000

On sale: Available for preorder now

THE LIGHT

Director: Tom Tykwer

Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger

Rating: 3/5

David Haye record

Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4

Martin Sabbagh profile

Job: CEO JCDecaux Middle East

In the role: Since January 2015

Lives: In the UAE

Background: M&A, investment banking

Studied: Corporate finance

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

Final scores

18 under: Tyrrell Hatton (ENG)

- 14: Jason Scrivener (AUS)

-13: Rory McIlroy (NIR)

-12: Rafa Cabrera Bello (ESP)

-11: David Lipsky (USA), Marc Warren (SCO)

-10: Tommy Fleetwood (ENG), Chris Paisley (ENG), Matt Wallace (ENG), Fabrizio Zanotti (PAR)

Why your domicile status is important

Your UK residence status is assessed using the statutory residence test. While your residence status – ie where you live - is assessed every year, your domicile status is assessed over your lifetime.

Your domicile of origin generally comes from your parents and if your parents were not married, then it is decided by your father. Your domicile is generally the country your father considered his permanent home when you were born. 

UK residents who have their permanent home ("domicile") outside the UK may not have to pay UK tax on foreign income. For example, they do not pay tax on foreign income or gains if they are less than £2,000 in the tax year and do not transfer that gain to a UK bank account.

A UK-domiciled person, however, is liable for UK tax on their worldwide income and gains when they are resident in the UK.

The specs: 2018 Volkswagen Teramont

Price, base / as tested Dh137,000 / Dh189,950

Engine 3.6-litre V6

Gearbox Eight-speed automatic

Power 280hp @ 6,200rpm

Torque 360Nm @ 2,750rpm

Fuel economy, combined 11.7L / 100km

The specs
 
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

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Analysis

Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more

PAST 10 BRITISH GRAND PRIX WINNERS

2016 - Lewis Hamilton (Mercedes-GP)
2015 - Lewis Hamilton (Mercedes-GP)
2014 - Lewis Hamilton (Mercedes-GP)
2013 - Nico Rosberg (Mercedes-GP)
2012 - Mark Webber (Red Bull Racing)
2011 - Fernando Alonso (Ferrari)
2010 - Mark Webber (Red Bull Racing)
2009 - Sebastian Vettel (Red Bull Racing)
2008 - Lewis Hamilton (McLaren)
2007 - Kimi Raikkonen (Ferrari)

Profile of Hala Insurance

Date Started: September 2018

Founders: Walid and Karim Dib

Based: Abu Dhabi

Employees: Nine

Amount raised: $1.2 million

Funders: Oman Technology Fund, AB Accelerator, 500 Startups, private backers

 

UAE players with central contracts

Rohan Mustafa, Ashfaq Ahmed, Chirag Suri, Rameez Shahzad, Shaiman Anwar, Adnan Mufti, Mohammed Usman, Ghulam Shabbir, Ahmed Raza, Qadeer Ahmed, Amir Hayat, Mohammed Naveed and Imran Haider.

Tuesday results:

  • Singapore bt Malaysia by 29 runs
  • UAE bt Oman by 13 runs
  • Hong Kong bt Nepal by 3 wickets

Final:
Thursday, UAE v Hong Kong

2025 Fifa Club World Cup groups

Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.

Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.

Group D: Flamengo, ES Tunis, Chelsea, Leon.

Group E: River Plate, Urawa, Monterrey, Inter Milan.

Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.

Group G: Manchester City, Wydad, Al Ain, Juventus.

Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.

THE SPECS

Engine: six-litre W12 twin-turbo

Transmission: eight-speed dual clutch auto

Power: 626bhp

Torque: 900Nm

Price: Dh940,160 (plus VAT)

On sale: Q1 2020

Our legal advisor

Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.

Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation. 

Education: Sagesse University, Beirut, Lebanon, in 2005.

Company%20profile
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Bio

Age: 25

Town: Al Diqdaqah – Ras Al Khaimah

Education: Bachelors degree in mechanical engineering

Favourite colour: White

Favourite place in the UAE: Downtown Dubai

Favourite book: A Life in Administration by Ghazi Al Gosaibi.

First owned baking book: How to Be a Domestic Goddess by Nigella Lawson.

Left Bank: Art, Passion and Rebirth of Paris 1940-1950

Agnes Poirer, Bloomsbury

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