Tim Chapman

Quoted in today's Financial Times commenting on the IPPR report highlighting concerns in Labour's plans for investment in the economy. It is essential for government to work closely with the private sector to unlock the huge sums of #investment waiting in the wings. Crowding-in private investment through tactical deployments of public investment can be effective, as we have seen with the US #InflationReductionAct, but creating the correct policy environment for investments to thrive is also crucial. A lack of clarity and certainty on the long-term strategy for the automotive sector, is destroying investor confidence, driving much needed private capital overseas and limiting necessary progress on the decarbonisation of the transport sector. The UK is in desperate need of consistent policy, backed by ambitious targets to retain its powerful position as a world leader in #sustainablefinance and #innovation. https://lnkd.in/eFvRWYYS

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💡🌱📑: 𝗡𝗮𝘃𝗶𝗴𝗮𝘁𝗶𝗻𝗴 𝗽𝗼𝗹𝗶𝗰𝘆 𝘂𝗻𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝘁𝘆 𝗶𝗻 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗹𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 Despite the risk of policies being dialled back, the issue is speed rather than direction, writes Victoria MacLean, Associate Fund Manager at WHEB Asset Management. With negative sentiment towards electric vehicles (EVs), headwinds facing clean energy companies, and the risk that Donald Trump (should he be re-elected) would try to repeal elements of the Inflation Reduction Act (IRA), the outlook for climate investing looks bleak on the surface. 𝗥𝗲𝗮𝗱 𝗺𝗼𝗿𝗲: https://lnkd.in/dC8JNXsG. Not an Environmental Finance subscriber? Register to receive a free one-month trial: https://lnkd.in/gYmdpGH. #esg #sustainableinvesting #policy

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⚠The DUKES of HAZARD ⚠ Amid the flurry of energy-related announcements from the new government, yesterday DESNZ released DUKES: the Digest of UK Energy Statistics report - an annual delight for anyone with nerdy energy tendencies. What does it tell us about the big picture for UK energy at the outset of a new political cycle and the challenges ahead for Great British Energy? My no.1 takeaway is the continued rise in net import dependency, rising 3.8 percentage points in 2023 to 40.8%. It's trending steadily up since a golden decade of net exports ended in 2003. This increasingly hazardous picture comes despite continued falls in UK energy demand - of which oil remains 39% and gas 36% - in light of deindustrialisation, higher energy prices and recent warmer temperatures. Why is this happening? In the ultra-mature UK North Sea, production is falling off a cliff, with oil down 36% since 2019 alone and gas near a record low. Of course, that has no bearing on how much is consumed. Ordinarily you'd expect fiscal terms to be adapted to facilitate smaller or more challenging domestic projects, but the opposite has happened. Lack of new investment driven by fiscal changes in the last parliament will only be exacerbated by the latest ones announced this week. Is it a coincidence that imported energy production emissions aren't counted in the domestic emissions stats so beloved of our leaders (the one about total emissions falling by around half since 1990)? Feels like a case of "out of sight, out of mind", or maybe Goodhart's Law: a measure that becomes a target ceases to be a good measure. The inevitable impact will be further reduction in domestic supply, pushing that 40.8% import dependency ever higher over the next decade. While we'll always be part of a complex, interdependent web of cross-border energy trade with (mostly) friendly partners, that will increase the UK's well-publicised budgetary constraints, reduce international competitiveness, accelerate job losses and heighten vulnerability to price shocks from volatile commodity prices. It's notable that the largest shares of both oil and gas imports come from Norway, which draws partly on the same North Sea basin (and let's not mention their SWF...). Norwegian gas meets 40% of total UK gas demand. And the fully energy self-sufficient USA provides both the 2nd largest shares of both oil and gas (via LNG), materially increasing the emissions footprint vs domestic production. Another notable data point: renewable generation was flat y-o-y at 136 TWh, with generation capacity increases offset by worse conditions. Renewables account for 15.5% of final consumption. Encouragingly, renewables' share of generation rose to 46.4%, but electricity is only ~20% of total consumption. While the UK remains the heat decarbonisation laggard with only 9.4% of heat produced renewably (btw, are we really still counting burning wood - especially imported wood - as "renewable"?!). GBE has its work cut out!

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What are the main takeaways from #UK local and mayoral elections (held 2 May) now the dust has settled? Headline: Prospects for the Conservatives are looking rough heading into general #elections expected in H2 2024. But when you dive into the detail... Things still look rough The #Conservatives lost 474 councillors who were contesting this time round, hanging on to only 515. These were lost to a broad range of parties (i.e. weren't all handed to Labour). It is important to not extrapolate too heavily between the outcome of the local elections and that of parliamentary elections given people vote along very different lines. With the caveat that local elections should only be treated as large opinion polls, there are still some key takeaways. For instance, they provide some evidence that the large #Labour lead in voting intention polls will carry over into favourable electoral prospects in parliamentary elections. In the last cycle of these seats the Conservatives achieved an estimated 36% of the local election vote compared to 29% for Labour (2021). Since then, the Conservative vote share has gradually fallen in 2022 (30%), 2023 (26%), and in 2024 (25%). Nevertheless, the vote share for Labour in 2024 of 34% is still far short of the 43% that Tony Blair’s Labour won in May 1996. The 1996 victory preceded a landslide for Labour in May 1997 general elections, when the party won 418 of 650 seats, up from 271 in 1992. Therefore, we find the local election results supportive of our expectation for Labour to win the election, but for the margin of victory to be narrower than many forecasters are presently predicting. We ultimately expect the party to win around 340 seats, with a topside projection of around 360 seats (should Labour do better in Scotland than we presently anticipate amid further troubles at the SNP). The Blackpool South by-election – also held on May 2 – offers some insights into how the public will vote in the general election – specifically on how vulnerable the centre-right Conservatives are to a split on the vote on the right. Labour took a resounding victory on the day, winning 58.9% of the vote. The Conservatives vote share fell to just 17.5%, while Reform UK only won 16.9% of the vote. The outcome for Reform contrasts to the performance of UKIP in 2014 when the party won 2 by-elections. This preceded the party winning 12.6% of the vote in the 2015 parliamentary election. Relatively worse by-election performance for Reform suggests that they will not perform as well as UKIP did in 2015, perhaps little surprise given UKIP had a strong single message (campaigning for the UK to leave the EU) whereas the aim of Reform is much less clear. Our forecast is for Reform to win less than 5% of the vote in the general election, which should only have a modest impact on the Conservatives (as the vote on the right is split to the benefit of Labour). Read the full note at BMI

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Robert Smith Gill Plimmer it's a different kind of fraud: it's about the evaluation of the risk (and price) of private assets in general. As we have discussed with Gill many times and about Thames in particular, investors are not told what these assets are likely worth because the way they are valued does not take into account market data. Instead it is a charade that 'smoothes over' any volatility. Of course not all assets are bad but the bad ones are indistinguishable from the rest. In the strict sense it is of course fraud: lying about fair value.

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As I'm sure many involved the renewables sector will also be, I'm intrigued to see how the Government's newly announced #GBEnergy (in tandem with the National Wealth Fund) will find its place in the market... Will it seek to back proven technologies or to develop those which are more nascent? Will it facilitate the opening up of the market(s) to wider private investment or in fact be an unnecessary competitor? Time will of course tell! What are your thoughts - GB Energy, good news or not? #GBEnergy #sustainablebusiness #decarbonisation #renewables

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CQS Natural Resources Growth and Income plc provides its Fund Fact Sheet for the month of August. Fund managers Ian Francis, Robert Crayfourd, and Keith Watson provide the commentary around the #commodities and #equities space for the month of August: "#Gold was a notable exception in the downward trend in general commodities pricing over the month. Prices ended August around 7% higher as investment allocations remained positive. As a result, related equities performed well. Positive earnings trends were evident during the second quarter reporting season, as producers showed improved cost management and margin expansion. Higher gold prices and easing cost inflation pressures fed through." Read the full note here: #investment #assetmanagement #investing #goldprice #naturalresources

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Another fantastic local deal advising Chester based Arbtech. KPMG Corporate Finance has advised ecological survey provider, Arbtech on the sale of the business to Inflexion backed Celnor. Arbtech provide tree surveys, biodiversity surveys, bat surveys and more. It allows clients to save time and money by avoiding unnecessary delays on site. Celnor is a group of complementary businesses offering a range of inspection, testing, certification, and compliance services to commercial clients across the UK, backed by Inflexion Private Equity.  This deal is another example of the current demand for businesses which can demonstrate themselves as platforms in fragmented and emerging markets, and will accelerate the expansion of Arbtech’s service lines and proprietary technology. Congratulations to Robert Oates, Inflexion and the KPMG Corporate Finance team who advised : Richard Stark, William Griffith, Alexander Cary and Ciaran Jaras. https://lnkd.in/ebiK2x4V #KPMGCorporatefinance #ESG #Environmentalservices #Privateequity

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If you believe that investment outcomes are inextricably linked with our social and ecological fabric (and if you are in doubt, I thoroughly recommend Jon Lukomnik's excellent book https://lnkd.in/eb2gTh2w) then Leanne Clements' post is a must read. The reframing of the Stewardship Code seems to be at risk of losing the bigger picture. Given the incoming sustainability accounting standards that seems disjointed at the very least. Values-driven value anyone?

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Join our upcoming webinar with Liontrust Asset Management PLC. The growth in demand for sustainable investment in recent years and the subsequent significant expansion in the number of funds taking this approach has led to increased concerns about greenwashing among advisers. In this webinar, Liontrust Asset Management PLC will discuss the FCA regulation and what this means for you in giving advice to clients on sustainable investments, how this fits in with Consumer Duty, how it impacts asset managers and the timeline for implementation. Register now 👇 https://lnkd.in/e3ZrdcRw

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🎧 #ICYMI... It's time for this week's Climate Bonds Café! Following the launch of the Q1 Market Report, we saw a record-breaking quarter for GSS+ issuance. Joining us to review all the key facts, figures and standout performers is Caroline Harrison, Director of Technical Development, Climate Bonds Initiative 🎙️ Many are starting to wonder: Will 2024 be the year of one trillion USD of aligned #green issuance? 👀 Listen here: https://ow.ly/zRhM50Stz44

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It was a true pleasure to discuss the CEE region with Anne-Louise Stranne Petersen, a specialist in European infrastructure and renewables at Infrastructure Investor. We covered several important topics, including: -The Amber-advised Three Seas Initiative Investment Fund as a catalyst for much-needed private sector investments in the region -The attractiveness of the CEE from a risk/reward perspective for infrastructure investors -The strength of the pipeline of investment opportunities in the energy, transport and digital infrastructure sectors -The critical role of local pension funds in addressing the infrastructure financing gap #3SIIF, #infrastructureinvestment, #CEE

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This is a short overview the latest release of the infra300 and our infraMetrics market indices & benchmarks. Infra remains strong with an attractive Sharpe ratio but risks that need measuring and managing... which is only possible with proper market data. EDHEC Infra & Private Assets #infra300

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The government has just launched their very disappointing industrial strategy green paper. They outline key policy areas being; People and skills Innovation Energy and infrastructure Regulatory environment Crowding in investment International partnerships and trade Most of these are the general expected fluff but what was incredibly discouraging was the commentary on the regulatory environment. The UK government intends to increase regulation across all areas of industry in an attempt to be pro-business. Politically you may agree or disagree with increased regulation but in what world is increased regulation pro-business? SME's do not need more loops to jump through to get a bank account. placing more IPO loopholes in front of that UK unicorn will only incentivise it to list in the US. Start-ups do not need to spend more money on irrelevant compliance with more regulation. As small business owners, we are not asking the UK government to do anything, we are asking them to do nothing. Stay out the way, collect my taxes and let the invisible hand of economics guide which companies succeed and fail.

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An excellent report which could be an important moment for transition finance. It recognises the challenges and gives some clear recommendations. Over to the Government and Transition Finance Council to step up, give the policy certainty and build the national sector and transition plans needed. #TransitionFinanceMarketReview #SustainableFinance #ESG

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National Grid Right issue for 7bn Speaking with some clients recently, there has been confusion and a very short window to respond with a decision. This article highlights some of the issues investors have relayed to me. It's important to look at your overall portfolio of invested wealth when making these decisions as everyone's capacity for loss and risk appetite will be very different. https://lnkd.in/eE-a9-6q The link to National Grid announcements is here: https://lnkd.in/eFh2mMmb

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An "Industrial Policy" Green Paper is most welcome and provides a framework that ought to re-assure those seeking to invest in the UK. Having a defined and detailed Industrial Policy will assist in promoting and securing long term industrial investment for the next 10 years and beyond in an integrated manner that aligns planning, infrastructure and power to commercial enterprise. A welcome a positive step to getting the inward scaled investment that the country so desperately needs to secure growth and increase productivity.

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We welcome the early publication of the UK’s ambitious NDC, which commits to reducing greenhouse gas emissions by 81% by 2035. This statement of intent signals UK leadership on climate and offers a valuable opportunity to attract clean energy investments, spur clean growth, and strengthen investor confidence in the country’s climate trajectory.      Further details to underpin this new NDC are an important next step. A clear delivery plan, particularly for sectoral decarbonisation, will be essential for attracting private finance and making NDCs a central tool in reducing emissions. Ensuring NDCs are investable by defining the role of private finance is crucial to closing the climate finance gap.     As one of the first countries to publish an updated NDC ahead of the February 2025 deadline, the UK makes clear that it intends to lead. This early, ambitious step can have a ripple effect, building confidence in other countries to increase their own commitments.     Now is the time for others to follow suit. Impactful NDCs can maintain international momentum and demonstrate to investors that the transition to a net zero economy is key to long-term growth. They are ready to support and amplify this impact. #COP29

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