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Economy

RBS reports losses of £8.2bn – and employee bonuses of £576m

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The Royal Bank of Scotland (RBS), which remains 81% owned by the government, has reported a pre-tax loss of £8.2 billion for 2013. The losses are a result of restructuring costs and misconduct fines.

Despite the losses, RBS’s bonus pool is still £576m – a 15% decrease on the amount paid out last year. David Cameron recently defended the government’s position on bankers’ bonuses at RBS after the Labour party called on the government to act upon EU rules that would cap the bonuses paid.

David Hillman, from the Robin Hood Tax Campaign, commented, “Frankly, this beggars belief. In what other industry would staff at a state-owned company that helped bring the economy to its knees be lavishly rewarded for massive losses?

“This is yet another example of one rule for the City another for the rest of us. It is time we made banks work in our interests rather than the other way around.”

Similar criticisms of RBS were made last year, when full-year figures for 2012 showed losses of £5.17 billion – while the company still shelled out £607m in bonuses for employees.

Following the disappointing figures, RBS announced plans to switch its focus to customers and build trust. The bank aims to be a “smaller, simpler and smarter UK focused bank that puts the needs of its customers at its core”. By 2020, the bank has a target of being the number one bank for customer service and the most trusted bank in the UK.

Andre Spicer, professor of organisational behaviour at Cass Business School in London, said that whilst getting back to “good old banking” was a good idea, in reality it is going to be much harder.

He explained, “Simplifying the firm into three divisions, getting rid of complex businesses, and focusing on consumers should get to the root of past problems. This should please politicians.

“But years of poor performance will make the public who are the majority shareholder nervous. People are likely to start asking whether continuing to loose billons operating a bank is the best use of taxpayers money.”

Meanwhile, the Move Your Money campaign pointed out that many consumers were already moving away from the big five banks to one of the 50 smaller and simpler banks across the UK. Charlotte Webster, campaign director at Move Your Money, said the changes from RBS were “too little, far too late”.

These thoughts were echoed by ethical bank Triodos, who said consumers are now placing more emphasis on ethics and integrity when it come to banks. The bank added that their research showed the top factor influencing Britons’ choice of bank if they were to choose today was that the bank does not pay large bonuses.

Spicer also noted that RBS finds itself trapped by “industry conventions” for paying bonuses to bankers even when the company is losing money. Despite many regulators and researchers agreeing that financial incentives for short-term performance contributed to the financial crisis, the majority of banks continue to pay bonuses simply because their competitors do.

However some banks, such as Handelsbanken, which don’t pay bonuses and came out of the crisis unscathed.

Spicer concluded, “This reminds us that there are alternatives out there, it is just most banks are unwilling to consider them.”

Further reading:

Royal Bank of Scotland to focus in UK customers and economy

Regulators say Euribor reforms ‘must continue’ following rigging scandal

Royal Bank of Scotland faces losses of £8bn

Cameron defends bankers’ bonuses at RBS after Labour criticism

Labour calls on government to rein in excessive RBS bonuses

Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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