Author: itsupport

The most successful leaders in history

Posted on by itsupport

What makes a successful leader? For some it’s measured by the bottom line; for others by company culture, connection and purpose. For the best it’s a combination of all of these, and then some.

In their book, Primal Leadership, authors Daniel Goleman, Richard Boyatzis and Annie McKee outline six key leadership styles: visionary, coaching, affiliative, democratic, pace-setting and commanding.

But as David Noble, business coach and co-author of Real Time Leadership, points out, what’s most important is matching the right leadership style to the right environment. “We have seen successful leaders in every one of the key leadership styles, but we’ve also seen examples where each of these styles can fail spectacularly,” he says. “Leaders must be able to align their style to what is needed in the moment to unlock performance, and they need to be flexible enough to change their style as conditions change.”

“Inspiring leaders also need to be great human beings, with strong character strengths and values like perspective, generosity and inclusiveness,” Noble says. “What leaders emanate as people is as important as what they say and do.”

So what is it about CEOs such as Elon Musk, Bill Gates and Mary Barra that have made them so successful? “According to our research and experience, these CEOs have at least two big things in common,” says Ed O’Malley, president and CEO of the Kansas Health Foundation and co-author of When Everyone Leads: How the Toughest Challenges Get Seen and Solved. “First, they shoot for the moon (or Mars in Musk’s case). They have big, audacious, time-bound visions. They don’t convey the ‘how,’ but they make the direction clear. They know that one of the most important leadership tasks for anyone in authority is to set clear, provocative and bold direction.

“Second, they unleash a culture of leadership throughout their organisations. They know the toughest challenges can’t be solved by them alone, that their work is to create a culture where innovation, experimentation, and disruption thrive.”

So how have these qualities played out in history? From changing the world through affordable cars to sending humans to space, we’ve taken a deep dive into the success stories and personal characteristics of some of the most inspiring businesspeople of the past 100-plus years.

Henry Ford
Industrialist and founder of the Ford Motor Company

Few can claim to have transformed the world in quite the same way as Henry Ford. The first to bring the assembly line to car manufacturing – lowering production time from half a day to 93 minutes – he made cars for the masses, founding the Ford Motor Company in 1903.

The Model T was rolled out in 1908, and 10 years later, they accounted for half of all cars in the US. That was in large part thanks to their relative affordability; by 1924, they were selling for less than $300 (or around $5,200 in today’s money). By 1927, the company had produced more than 15 million of them.

These moves have been credited with major historic developments – including leading to the creation of the US’s interstate highway system. It wasn’t just Ford’s focus on technical innovation that propelled the company to success, though. While some have pointed to his autocratic, even ‘dictatorial’ leadership – making most of the business’s decisions himself – others have praised his collaborative, people-orientated approach.

He raised workers’ salaries – doubling them in 1914 to a then unusual $5 a day – and lowered daily hours from nine to eight hours, introducing the 40-hour working week with three daily shifts to keep production going round the clock. As well as motivating employees, these moves meant boosting productivity, lowering turnover and capturing and retaining the best talent. Ford also made various other moves – from bringing the entire car manufacturing process under one roof to transforming the way vehicles were sold, forming a network of dealers across the country. He was also notoriously service-driven, pursuing his conviction that “a business that makes nothing but money is a poor business.”

This approach clearly paid off; Ford Motor Company was the first manufacturer to begin production again after World War II and one of the first to go global, launching in 33 countries. The success hasn’t waned since; today the company is the second-biggest car manufacturer in the US and the fourth largest in the world, with more than 180,000 employees, an annual production of more than four million cars and revenues of $136bn in 2021.

Ford proved the power of throwing out the rulebook and pursuing a vision, however against the grain. “Whether you think you can, or think you can’t – you’re right,” he notoriously once said. He was a leader that certainly thought he could – and few would deny that he was right in his conviction.

Steve Jobs
Entrepreneur, designer and media proprietor

Creative, passionate, ruthless, innovative, inspiring and a relentless perfectionist – these are just a few of the words that have been used to describe the leadership of former Apple CEO Steve Jobs; and despite his oft-demanding, autocratic leadership, it would be a challenge to claim it didn’t work.

When Jobs took over as CEO of Apple in 1997 – having left 12 years earlier to found new firm NeXT – he joined a company that appeared to be on its last legs. Stock prices had plunged, board members had failed to find a buyer and losses that year had racked up to no less than $1bn. Michael Dell had reportedly stated that if it were up to him, he would “shut Apple down and give the money back to shareholders.”

Jobs didn’t waste time in taking action; he slimmed the 350 projects then in development to just 50, and then reduced them to a further 10 (with laptops and desktops for consumers and professionals at the core). “If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things”, he said at the time, putting the emphasis on creating a new brand rather than competing with Microsoft.

He focused on design and simplicity – homing in on aesthetics in a way no other tech company had, exemplified in the Apple mouse – and invested in advertising, producing the ‘Think Different’ campaign to reflect Apple’s outside-of-the-box ethos. The iPod, iTunes and iPhone all followed, bringing a new consumer base to the brand that further propelled the company’s success. It clearly worked; Apple became the world’s first trillion-dollar company in 2018, and the first to hit the $3trn mark in early 2022, making it the most valuable firm on the planet by market capitalisation.

Working for Jobs wasn’t easy, according to some. He was known for his high expectations, perfectionism and desire for control, as well as an acute eye for detail (as an example, he reportedly noticed the second ‘o’ in the Google logo on the iPhone had a slightly different colour gradient and immediately assigned a team to it). “In the Macintosh Division, you had to prove yourself every day, or Jobs got rid of you,” wrote former Apple employee Guy Kawasaki in a CNBC article.
“He demanded excellence and kept you at the top of your game. It wasn’t easy to work for him; it was sometimes unpleasant and always scary, but it drove many of us to do the finest work of our careers.” Yet despite his demanding style, Jobs was passionate about what he did, and remained involved on every level throughout his career.

“Like many successful leaders, Jobs showed incredible grit, going through every wall and overcoming every setback despite the odds being against him,” says David Noble. “He had a big vision that set him apart from the pack – not just 10x dreams but 1,000x, and he set out a step-by-step pathway that would let teams and organisations know they were winning.”

His focus on innovation, artistry and challenging the status quo made him one of the most inspiring thinkers in history, preaching a philosophy summed up in his oft-quoted words: “Life can be so much broader, once you discover one simple fact, and that is that everything around you that you call ‘life’ was made up by people who were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. Once you learn that, you’ll never be the same again.”

And the world wasn’t either.

Mary Barra
Chair and CEO of General Motors

When Mary Barra stepped up to the CEO throne at General Motors in 2014, she took on something of a challenge. It wasn’t just that she was the first woman to lead one of America’s top three car-makers (or one of the few females to head up any Fortune 500 company, for that matter). She had something of a turnaround job on her hands.

Just five years earlier, General Motors had filed for the biggest industrial bankruptcy in history – listing $82bn in assets and $173bn in liabilities – and got through five CEOs in the space of six years. Then a month into her tenure, GM was forced to recall 2.6 million vehicles due to a flaw in the switches (causing issues in airbag deployment). The crisis led to multiple accidents and more than 100 deaths, and a number of employees were dismissed.

Through honesty and transparency, Barra managed to navigate the crisis, publicly acknowledging the issue and launching a comprehensive investigation. She set about making various company changes, putting accountability top of the agenda and creating the ‘Speak Up for Safety’ programme to encourage employees to report issues. She also pulled the company from several markets including Western Europe, Russia, South Africa and India to home in on bigger money-making regions.

Since the crisis, Barra has continued to implement strategic changes – not least around the topic of sustainability. In 2016, GM introduced the Chevrolet Bolt EV with a battery that claims to outlast Tesla’s. The company has pledged to add 30 new electric vehicles to the fleet by 2025, with the vision of becoming fully electric by 2035. The firm is also investing in autonomous cars.

Barra is also a champion of equality, and there’s proof in the pudding; Equileap’s 2018 Global Report on Gender Equality found that GM was one of just two global businesses with no gender pay gap across the company. In 2020, she commissioned an Inclusion Advisory Board to encourage greater inclusivity, and she’s also a member of the OneTen coalition, whose goal is to cultivate economic opportunities for black talent in the US.

Many put Barra’s success down to her people-first approach and her ability to understand different perspectives, developed from first-hand experience working in a number of areas at GM – from engineering to human resources to product development. “My first job at General Motors was as a quality inspector on the assembly line,” she told Esquire. “I was checking fits between hoods and fenders. I had a little scale and clipboard. At one point, I was probably examining 60 jobs an hour during an eight-hour shift. A job like that teaches you to value all the people who do those type of roles.”

She’s also long been a preacher of hard work. “Hard work beats talent when talent doesn’t work hard,” she told Michigan Daily. “If you work hard, and you care about people and you have passion in what you do, you’ll do well.”

And she has a clear, powerful vision. “Under Barra’s leadership, GM envisions a world with zero crashes, to save lives; zero emissions, so future generations can inherit a healthier planet; and zero congestion, so customers get back a precious commodity – time,” reads her biography page on the GM website.

That formula has clearly paid off. Barra is number four on the current Forbes’ list of ‘The World’s 100 Most Powerful Women,’ and has been the highest-paid chief executive of the Big Three automakers for several consecutive years (earning $29.1m in 2021). GM brought in revenues of $127bn in 2021, holding the largest share of the auto market in the US at around 15 percent, according to Statista. That’s a far cry from the company’s position in 2009, when an article in The Economist stated that “no one believes that GM will ever return to its former glory.” Barra has proven the power of leadership in turning a company around, even when all hope seemed to be lost.

Sheryl Sandberg
Business executive, former COO of Facebook/Meta

When it comes to women in tech, Sheryl Sandberg is something of a pioneer. When she joined Facebook as COO in 2008 following a stint at Google, she helped revenues grow nearly 2,400 percent in the space of four years – from $153m in 2007 to $3.7bn in 2011 – bolstered largely by her focus on digital and mobile advertising. When Facebook went public in 2012, the company raised $16bn (with a valuation of $104bn), making it one of the largest IPOs in the history of the internet. By the time Sandberg announced in June 2022 she’d be leaving the company (now Meta), year-on-year revenue totalled more than $119bn.

But Sandberg’s work wasn’t only limited to the business side of things. When she joined Facebook’s board in 2012, she became the first woman to do so, and she’s been a proponent of gender equality ever since. She shot into the limelight in 2013 with her book Lean In: Women, Work and the Will to Lead – homing in on the systemic and societal barriers preventing women from taking up leadership roles – and later established the Lean In Foundation (now part of the Sheryl Sandberg & Dave Goldberg Family Foundation), overseeing grants and projects designed to help women across the world reach their goals; more than 50,000 women have since launched Lean In Circles across the globe.

Throughout her leadership, Sandberg emphasised the importance of confidence and self-worth, as well as supporting others. “The more women help one another, the more we help ourselves,” she wrote in Lean In. “Acting like a coalition truly does produce results. Any coalition of support must also include men, many of whom care about gender inequality as much as women do.” She’s also been vocal about her vision for a future where “there will be no female leaders. There will just be leaders.”

Sandberg has also garnered acclaim for supporting various philanthropic efforts – reportedly using around $100m of her Facebook stock to fund the Lean In Foundation and other charitable causes – and has been open about her ambition to use her power to better the world. “Leadership is not bullying and leadership is not aggression,” she told ABC News. “Leadership is the expectation that you can use your voice for good, that you can make the world a better place.”

Her career hasn’t been without criticism, however. As the face of a company linked to a number of data breaches, she’s come under fire from critics; in 2018, reports surfaced claiming that political consulting firm Cambridge Analytica had accessed data from more than 50 million Facebook users and used it to target voters, encouraging them to support Trump in the 2016 election. It led to widespread concerns over Facebook’s privacy, and a number of other accusations have cast a further shadow on the reputation of both Sandberg and the wider company. But Meta still counts more than three billion people among its user base, ranks the 12th most valuable company in the world and brings in annual revenues of over $100bn. Much of that is down to Sandberg and her willingness to “sit at the table,” create opportunities and ultimately challenge what it means to be a successful leader in today’s world – and many will long remember her legacy, in spite of the darker moments.

Elon Musk
Business magnate and CEO of SpaceX, Tesla and Twitter

If there’s one leader truly unafraid of pushing the boundaries, it’s Elon Musk. From his mission to get humans to Mars to his focus on electric cars, Musk doesn’t take impossible for an answer – and his controversial persona has only added to the intrigue.

From founding Paypal in the early 2000s (sold to eBay in 2002 for $1.5bn) to launching SpaceX and Tesla, he’s never been short of ideas – and the support to get him there. And against the odds, both have taken off somewhat spectacularly; in 2008, SpaceX won a $1.6bn NASA contract, two years later becoming the first private company to successfully launch, orbit and recover a spacecraft. Last September the company made history once again when it sent four passengers into space on the Inspiration4 rocket, marking the first ever orbit crewed solely by space tourists. Tesla has meanwhile become the biggest electric vehicle brand in the world, with sales of its Model 3 topping one million units globally in 2021 and revenue hitting $53bn.

As with Jobs, Musk’s leadership style hasn’t been without its critics; employees have pointed to his high expectations and tendency to make the decisions while micro-managing (Musk himself called himself a “nano-manager” in an interview with The Wall Street Journal). An anonymous former employee told Business Insider that “there was only one decision-maker at Tesla, and it’s Elon Musk.”

When he took over Twitter in October, he came under fire from far and wide for his drastic approach, including major cuts to the workforce and other controversial moves.

But others have praised his relentless drive, and an ability to motivate and inspire teams even in the face of failure. When Falcon One was lost during its mission in 2008, for example, Musk gave a speech that saw “the energy of the building go from despair and defeat to a massive buzz of determination,” in the words of former SpaceX head of talent acquisition Dolly Singh. “It was the most impressive display of leadership that I have ever witnessed,” she wrote in a post on Quora.

It’s perhaps that talent for boundary-pushing that has got Musk an almost cult-like following and given him a net-worth of $241bn; making him the richest person in the world. As with Jobs, it’s also his constant drive to question the status quo. “If something is important enough, even if the odds are against you, you should still do it,” he reportedly once said.

“The advice I would give is to not blindly follow trends,” he told CNBC. “Question and challenge the status quo.” Musk’s ambitions don’t end with his visions around electric vehicles, SpaceX and Twitter, of course.

He has spoken about launching a flying car at Tesla, and through another of his ventures, The Boring Company, is working on Hyperloop – an ultra-high-speed public transportation system that would transport passengers between cities in autonomous electric pods at 600mph. Another of his babies, Neuralink, meanwhile aims to integrate AI with the human brain in a way that would “enable someone with paralysis to use a smartphone with their mind faster than someone using thumbs,” in the words of Musk himself, in a recent Twitter post.

These visions might seem out there, but Neuralink already has the backing of Silicon Valley giants including Google parent Alphabet, and the company plans to launch clinical trials in humans in the near future. Realism likely isn’t a word that features in Elonism – and if there’s anyone who can achieve the seemingly impossible, it’s surely Musk.

Only time will tell what impact his Twitter takeover might have, or if we all end up living on Mars – but what is clear is that his bold, controversial visions appear to have skyrocketed him to success, even in the face of at times intense criticism and scrutiny.

Brazil is back

Posted on by itsupport

They tried to bury me alive, and here I am,” President-elect Lula told jubilant crowds in São Paulo as the vote count confirmed his victory in the Brazilian presidential runoff. The moment marked a historic comeback for the veteran politician, whose career and reputation were seemingly ruined when he was convicted of accepting bribes in Brazil’s watershed ‘Operation Car Wash’ corruption probe. Sentenced to 12 years behind bars, the former president was forced to watch the 2018 election from his jail cell. After serving 580 days in prison, his conviction was annulled, and Luiz Inácio Lula da Silva – known mononymously as Lula – re-entered Brazil’s political fray, finding his way back to the top job just three short years after his release from jail.

Despite the throngs of euphoric voters that filled the São Paulo streets as the election results poured in, Lula’s victory was by no means a landslide. After a divisive and bitterly fought election campaign, Lula defeated his far-right rival Jair Bolsonaro by the tightest of margins, winning 50.9 percent of the vote to the incumbent’s 49.1 percent. The knife-edge election was Brazil’s most closely fought contest since the end of its military dictatorship in 1985, reflecting a deeply divided and politically polarised society.

The Brazil that Lula now inherits is very different to the one he left

When he officially takes office in January 2023, Lula will be tasked with reuniting a fractured Brazil. The world’s fourth-largest democracy remains an extremely unequal country, with severe economic, social and geographic disparities that continue to hamper progress and slow growth. Many voters will hope that Lula can build on the successes of his first two terms, which saw 20 million Brazilians lifted out of poverty. But the Brazil that Lula now inherits is very different to the one he left when he last departed the presidential palace in 2011. COVID-19 dealt a hammer blow to the public purse, while stubborn inflation is eroding wages and pushing people back into poverty. In realising his vision for a better Brazil, Lula certainly faces an uphill struggle – but as his momentous comeback has shown, he doesn’t shy away from a hard fight.

Brazil’s own son
Politics can be a fickle game. Public support is hard-earned and easily lost, and longevity is by no means guaranteed. Few world leaders remain popular throughout their time in power, and fewer still are able to leave a lasting legacy once they have left office. Lula, however, has already succeeded on both counts.

Dubbed “the most popular politician on Earth” by former US president Barack Obama, Lula enjoyed tremendous support during his first two terms, leaving office in 2010 with an approval rating of nearly 90 percent. And it isn’t hard to see why Lula proved so popular among his peers and compatriots. Under his tenure, the country experienced rapid economic growth, while Lula’s commitment to anti-hunger programmes saw millions of people propelled out of poverty. In returning once again to Brazil’s highest office, Lula is putting his remarkable legacy on the line – in the hope that he can replicate his past successes.

A lifelong champion of the poor, Lula’s humble beginnings are central to his enduring appeal in Brazil. Born in the historically poverty-stricken north-eastern region of Brazil, Lula had to work from an early age to help to support his family, shining shoes and selling peanuts on the city streets as a young child. By his late teens, Lula had found employment as a metalworker in an industrial suburb of São Paulo – a physically demanding job that saw him lose a finger in a workplace accident when he was 19.

It was during this time as a factory worker that Lula developed an interest in advancing workers’ rights. At the encouragement of his union-activist brother, he joined the Metalworker’s Union and quickly rose through the ranks, becoming president in 1975.

In protest of the poor working conditions and routinely low salaries among Brazilian factory workers, Lula led a series of historic strikes between 1978 and 1980, spending a month in jail when the country’s military regime declared the strikes unlawful.

But a month in a prison cell couldn’t quash Lula’s newfound passion for social and economic justice. Shortly after his release, Lula founded the Workers’ Party, a progressive, left-wing political party that brought together a diverse array of union activists, academics and intellectuals.

From humble beginnings in the midst of Brazil’s military dictatorship, the Workers’ Party grew into an unstoppable political force in the decades that followed, with Lula eventually elected President of Brazil in 2002. For many Brazilians, Lula’s election marked the first time that they saw themselves represented in the country’s highest office. Unlike any other president in the nation’s history, Lula came from working class origins.

His lack of formal education and years spent toiling in high-risk, low-pay industries endeared him to millions of voters who had endured the same hardships over the course of their lifetime. But in order to keep the Brazilian people on his side, Lula had to make good on his bold election promises to eradicate hunger and bring an end to poverty. And in a nation rocked by economic crises and persistent inequality, this was certainly no small task.

A global powerhouse
When Lula first took office in 2003, the Brazilian economy was in something of a sorry state. The nation was weighed down by an immense debt burden, while the outgoing administration had failed in its promises to generate jobs and narrow the social divide. Many anticipated that Lula’s election would herald the end of neoliberalism in Brazil, ushering in an era of radical interventions and drastic revisions to economic policy. But this revolutionary approach did not materialise. Upon taking power, Lula surprised both his supporters and critics by adopting a much more conventional economic plan than had been anticipated.

Renewing all of the agreements that the previous administration had signed with the International Monetary Fund (IMF), Lula was prudent in his early policy-making, prioritising fiscal responsibility as he looked to calm jittery markets. This was ultimately a wise move. Brazil’s financial outlook rallied in the months following Lula’s victory, with his success in stabilising the economy allowing him to turn his attention to more radical social reform.

In a fortuitous turn of events, Lula’s election coincided with a surge in global demand for commodities. Driven largely by China and other emerging markets, the early 2000s commodities boom saw resource-rich Brazil enjoy a period of rapid economic growth. Boasting abundant supplies of foodstuffs and raw materials such as oil and iron ore, the South American nation was well-positioned to meet the demands of resource-hungry importers.

This country needs peace and unity. This population doesn’t want to fight anymore

Thanks to the skyrocketing demand for Brazilian products, Brazil saw its annual trade with China grow from $2bn at the turn of the century to $83bn in 2013. China became the country’s largest trade partner, with this lucrative relationship helping to drive down debt and boost growth. Lula successfully channelled the trade surplus of the commodities boom into help for the nation’s poor.

With the public purse now looking remarkably healthy, the state had the freedom to invest intensively in social programmes and poverty relief schemes. This included the expansion of the internationally lauded Bolsa Família cash transfer scheme, which was launched early in Lula’s first term. A radical programme targeted towards those living in extreme poverty, the Bolsa Família provided direct cash payments to poor families, on the condition that they would keep their children in school and take them to receive their required vaccinations.

According to the World Bank, 94 percent of Bolsa Família funds were directed towards the poorest 40 percent of the population, making it one of the most effectively targeted aid programmes in history. In directing windfall trade profits towards effective anti-hunger and anti-poverty programmes, Lula oversaw a historic rise in living standards among working class Brazilians, cementing his position on the global political stage and re-establishing the nation as an exciting ‘economy to watch.’

After years of underperformance and sluggish growth, Brazil was booming. By the end of Lula’s second term as president in 2010, the nation was something of a global powerhouse – both economically and culturally. Selected to host the 2014 World Cup and 2016 Olympics, the country had established itself as a significant player on the global scene, open for business, open for investment and open for visitors. Eternally cast as ‘the country of future,’ it seemed that, at long last, the future had arrived for Brazil.

From boom to bust
Brazil’s post-millennium boom was ultimately not to last. Over the past decade, the South American giant has been rocked by a series of economic, political and social crises that have destabilised the economy and left the country bitterly divided. In 2016, Lula’s successor Dilma Rousseff was impeached for supposedly manipulating government accounts. Around the same time, Lula’s own Workers’ Party became embroiled in the sprawling ‘Operation Car Wash’ corruption scandal, ultimately leading to the former president’s conviction and imprisonment.

As China’s appetite for imports cooled during its 2015 slowdown, the commodity boom that had fuelled Brazil’s growth also came to a shuddering halt. The nation entered a crippling and long-lasting recession in 2015, with the fall in commodity prices prompting the country’s deepest economic decline since records began. Once regarded as one of the fastest growing economies on earth, Brazil suddenly found that its fortunes had been reversed. For the first time in a decade, poverty began to rise and GDP began to fall. In 2018, discontented voters chose the far-right populist Jair Bolsonaro as the next president of Brazil, bringing an end to almost two decades of left-of-centre rule.

But a dramatic change in political leadership didn’t repair Brazil’s ailing economy. The 2015–16 recession had left deep scars, with a slow and fragile recovery leaving the country fiscally exposed. Then in early 2020, after six years of slow and oftentimes negative economic growth, COVID-19 arrived, and Brazil was plunged into yet another crisis. At the beginning of 2020, Brazil’s unemployment rate already stood at 12.6 percent, with the ongoing aftereffects of the recent recession continuing to affect both job opportunities and incomes (see Fig 1). The pandemic pushed joblessness to a record high, while an estimated 485,000 families were plunged into extreme poverty. As President Jair Bolsonaro publicly downplayed the severity of the virus, Brazil’s largely uncoordinated pandemic response saw it become one of the worst affected countries in the world. Recording in excess of 4,000 deaths on its darkest days of the pandemic, the nation suffered a simply catastrophic loss of life.

Despite the progress made during Lula’s first two terms, the pandemic further exacerbated the deepening inequality that has blighted Brazilian society over the past decade. A 2019 report by the United Nations found that the wealthiest one percent of Brazilians possess almost one third of the country’s entire income, with women, black Brazilians and the rural poor most severely affected by the inequality epidemic. Since the political-economic crisis of 2015, Brazil has pursued stringent fiscal austerity measures in an attempt to address the nation’s sizable deficit.

Significant cuts have been made to the social safety net that was created during the Lula administration, with the internationally admired Bolsa Família programme ultimately axed in November 2021. While perhaps the best-known in international circles, Bolsa Famiília is not the only Lula-era scheme to find itself on the chopping block – under Bolsonaro, a host of anti-poverty schemes and food security programmes have been cut at a time when they are needed most.

These austerity measures – coupled with the far-reaching impact of the pandemic – have had a devastating effect on the nation’s poor and vulnerable. Over half of the Brazilian population are now experiencing food insecurity, while a staggering 33 million are officially classed as hungry.

In little over a decade, Brazil has gone from a global powerhouse to a nation in severe social and economic decline. Once lauded as a future superpower, the country has instead become an international pariah, its reputation in tatters after years of pandemic mismanagement, environmental maladministration and fiscal chaos. Rebuilding Brazil will be a challenge of immense proportions – but it may just be the fight that Lula has spent his whole career preparing for.

Deep divisions
“Brazil is back!” President-elect Lula told euphoric crowds in São Paulo as he made his triumphant victory speech. “This country needs peace and unity. This population doesn’t want to fight anymore.” Many will share Lula’s desire for unity after what was a contentious and divisive election. Emotions ran high on both sides of the political spectrum in the lead-up to the presidential run-off, with misinformation and false accusations marring the election campaign. Left-wingers claimed that Bolsonaro was a cannibal, while right-wing bolsonaristas accused Lula of practising devil-worship. It was this fierce political polarisation that Lula sought to calm in his victory speech. Vowing to serve all Brazilians, and not just those who voted for him, Lula has made it clear that he intends to usher in a new era of social and political stability, bringing an end to the polarising politics of the outgoing administration.

Despite Bolsonaro’s insistence that “only God” could remove him from power, it now appears that Brazil is heading for a peaceful transition. Lula will assume office on January 1, 2023, and will inherit a daunting economic in-tray. With COVID-19 coming hot on the tails of Brazil’s worst post-war recession, the nation’s finances are in a very poor state. Inflation, while falling, is currently sitting at 6.5 percent, pushing the prices of everyday goods out of reach for many vulnerable Brazilians. Poverty is on the rise, particularly in the country’s rural northeast, and the growing national debt pile now stands at around 77 percent of GDP.

Against this challenging fiscal backdrop, Lula has promised to boost welfare spending and scrap the constitutional cap on government expenditure. What isn’t yet clear, however, is how Lula will achieve his ambitious campaign pledges in what remains a very limited fiscal space. There are echoes of his first two terms in his promises to eradicate hunger, build more affordable housing and improve living standards for the rural poor. He has also vowed to undertake a series of state-funded infrastructure projects, in addition to ushering in tax reforms and an increase in the minimum wage. Admirable goals, certainly, but Lula is likely to find that the public purse won’t stretch as far as it did during the 2000s commodities boom.

To make matters even more challenging, Lula also faces a congress largely dominated by Bolsonaro allies. The former president’s right-leaning Liberal party holds the largest number of seats in both the lower house and the Senate, potentially making life very difficult for leftist Lula. In order to find a way through, Lula will need to reach out to those in the centre ground – and compromise may become the order of the day.

Rising from the ashes
It is true that immense challenges lie ahead. Lula is set to inherit a deeply troubled country, against a decidedly gloomy global economic backdrop. But there may yet be some cause for cautious optimism. Lula’s post-millennium rise to power coincided with a worldwide commodities boom that saw resource-rich Brazil profit from an increase in demand for its exports.

Over the past 18 months, commodity prices have yet again been on the rise, with the COVID-19 recession and the ongoing Russian invasion of Ukraine causing severe supply chain bottlenecks and a globalised increase in demand for goods. Some market analysts have suggested that we may be at the beginning of a new commodities super cycle – with Brazil well-placed to capitalise on a sudden surge in prices.

Indeed, the nation’s agribusiness sector is booming thanks to the current sky-high prices of foodstuffs. A world leader in food supply, last year saw Brazil post a trade surplus of $61.2bn – the largest in its history. However, commodity prices are famously cyclical in nature, and prone to booms and busts. With experts predicting a short, sharp super cycle, Brazil may have a narrow window in which to capitalise on this uptick in prices – but it could provide the kickstart that the economy so desperately needs.

Lula oversaw a historic rise in living standards among working class Brazilians

On the international stage, meanwhile, Lula’s election has been warmly welcomed. ESG-conscious investors largely shunned Brazil during Bolsonaro’s presidency, in protest of the populist leader’s destructive environmental policies and controversial remarks. Lula’s promises to restore environmental protections and aim for zero deforestation are much more palatable to international investors – many of whom will also welcome the President-elect’s eagerness to pursue clean growth. If Lula is able to make good on his pledge to “reposition Brazil in the hearts of international investors,” the country could prove well-placed to attract significant foreign investment in the clean energy space. A shrewd negotiator and an experienced statesman, Lula may be able to soon restore Brazil’s reputation on the global stage – and an injection of foreign cash could well follow.

Significantly, financial markets are yet to be overly spooked by Lula’s early commitments to social spending. The nation’s GDP forecast for 2023 continues to rise, and despite some initial skittishness during the campaign trail, many in the financial world trust the returning president to take a pragmatic approach to government spending. Lula unexpectedly prioritised fiscal responsibility during his first term as president, and is expected to take a similarly realistic and practical approach to balancing the books when he assumes office in January.

When Lula was last in power, he achieved the seemingly impossible: maintaining fiscal discipline while boosting social spending and improving the lot of millions. Now returning for his third and supposedly final term, Lula’s priorities include fighting some familiar foes – hunger, extreme poverty and rampant inequality.

“If by the time I finish my term, every Brazilian is eating breakfast, lunch and dinner, I’ll have fulfilled my life’s mission once more,” the veteran politician said in a recent speech. If anyone can be counted on to achieve this noble goal, it may well be Lula.

Privacy versus Profits

Posted on by itsupport

A huge cyber-attack or data breach that cripples online activity is regularly listed as a major risk to global economic security, along with the physical risks of climate change and geopolitical conflict. Since British mathematician Clive Humby declared in 2006 that data is the oil of the 21st century, it has slowly dawned on governments, regulators, and companies that they have been sitting on goldmines for decades.

Along with this has come the realisation of the need to better protect this wealth of information. Enter the European Union’s General Data Protection Regulation (GDPR): a landmark 88-page piece of legislation that put data privacy and individuals’ rights on the map, introducing previously foreign concepts such as ‘the right to be forgotten’ to millions.

The overall thinking is not brand new – it is based on the 1995 Data Protection Directive, which is itself based on legal principles that have been in place since the 1970s. What’s different is the meaning of consent, and a clarification of the rights of individuals.

And if the measurement of success is awareness-raising among the general population, the GDPR has been remarkably successful: according to a 2019 (just a year after its implementation) study by Eurobarometer, nearly three in four people living in Europe were aware of at least some of their rights under the framework.

“GDPR has really popularised the sense of control, and its broad applicability is what makes it so impactful – it’s created a common language,” says Andrew Clearwater, chief trust officer at Atlanta-headquartered privacy management software service OneTrust. “Now you have millions of people with a broad expectation of what their rights are and how their data will be handled.”

One misnomer: while most of us learnt about it from the hundreds of ‘can we still contact you?’ emails from every company we’ve ever bought clothes or an appliance from, that was actually a separate law governing digital communications – the GDPR just tightened the meaning of consent for various pieces of legislation. The data protection rules themselves are more focused on how companies manage and store the personal data of individuals.

Not knowing how to answer a question on GDPR makes a company significantly less desirable to work with

“If I’d spoken to someone about what I do pre-2018 their eyes would glaze over – now they still might, but they will have at least heard of the GDPR,” says Jonathan Baines, chair of the National Association of Data Protection Officers in London (NADPO). “There is no business out there that does not process the personal data of individuals in some way – even a one-man building company has customers.”

And while it was the potential for huge, headline-grabbing fines that initially captured the attention of senior management teams, data privacy experts say it is this awareness-raising that has contributed the most to the law’s ongoing legacy. “While companies could respond by doing the bare minimum, for most, that new awareness has had a much bigger impact than a potential fine might,” adds Clearwater. “It means the bare minimum is just not enough compared to your competitors. Most have been forward thinking about helping their customers exercise their control.”

Measuring success
Determining the success of any legal framework is difficult and depends on its stated aims. For starters, it certainly seeks to address an existing problem. A common criticism of regulations is that they only solve past causes of crises and will not prevent future ones. But cybersecurity and companies’ handling of personal data is highly sensitive, and while the GDPR is about more than cybersecurity, a personal data breach that leaves customers open to hacking is likely to carry its most severe penalty.

“The concept of accountability is so important,” says Clearwater. Companies are required to maintain reams of internal evidence as proof of their compliance with the law. “That isn’t being broadcast endlessly, but it has to be there. And that creates this iceberg effect where users see a couple of small changes when they use a website, but below the surface, there are potentially hundreds of people engaging with records processing or vendor relationships in much better ways than in the past.”

From the earliest stages of product development to the way internal recruiters manage their databases, individuals at all levels and in all departments are expected to consider data privacy, says Edward Starkie, senior vice president of cybersecurity at risk consultancy Kroll. The intention was baking in “privacy by design” across every department of an organisation, he explains.

And while a whole new sector of privacy experts and firms purporting to be a one-stop-shop on GDPR compliance quickly sprung up around the regulation, for many companies, making use of one defeats the intended purpose of the framework. “There’s a perception within some businesses that these products are a silver bullet, but if you truly want to meet the intention behind the legislation, it has to be privacy by design,” says Starkie. “That can’t be achieved with the retrospective implementation of a tool.” Besides, Baines says that many of these were providing poor advice. Fundamental misunderstandings about what the law was intended to do – the confusion around digital marketing for example – led to some poor and incredibly costly mistakes, such as some companies dispensing with their entire marketing databases.

Data as an asset
If GDPR was about reining in the astronomical power wielded by Big Tech, it has been remarkably unsuccessful. A fair chunk of all fines have hit technology companies, with Amazon and Instagram paying the highest so far at $740m and $402m respectively, but they have barely made even a ripple in the ocean of enormous profits these companies report every year: in 2021 Amazon made approximately $33.4bn; Instagram parent company Meta took home around $39.3bn. While GDPR has undoubtedly improved the privacy rights of millions, these data farmers are still stockpiling vast reams of incredibly personal data and making billions of dollars every year out of selling it on – often at an enormous cost to society.

The difference between these companies and everyone else is that their whole business is personal data, so their privacy risk appetite is naturally much higher. “It makes a lot of sense for regulators to target the top tier – the Googles of the world which make money from not being compliant, compared to in other sectors,” he says. Mark Thompson, chief knowledge officer at the International Association of Privacy Professionals, seconds this. “Organisations are striving to work out what is the right level of personal data to minimise their liability but maximise their asset value,” he says.

Forever playing catch-up
Besides, law and regulation will always be playing catch-up to industry, particularly when it’s one as fast-moving as technology, says Jenna Franklin, co-chair of the data protection finance group at law firm Bird & Bird in London. And the EU’s fight on data privacy and governance continues: still in the pipeline are the Data Governance Act, the Data Act, the Digital Markets Act, Digital Services Act, the Artificial Intelligence Act, the Digital Operational Resilience Act, and the second Network and Information Security Directive.

“There’s always a tension, particularly with data protection rules, where regulators don’t want to stifle innovation – but they have to weigh that with the impact on the individual and how we protect their rights,” says Franklin. The COVID-19 pandemic and the remote working revolution it prompted certainly made things more difficult. While the GDPR requires data controllers to report breaches within 72 hours of becoming aware of them, a 2020 IBM study found that the global average time to identify and contain was an enormous 280 days. EU countries tended to perform better than others, but not by much.

Unfulfilled potential
Despite the eye-catching headlines around the GDPR’s potential for record-breaking fines, the penalties themselves have not come close to fulfilling their true potential. While information regulators technically have the power to hit companies with a fine of up to four percent of annual global turnover, the majority have not come close to that. Not all penalties are publicised by data protection authorities, but most have been under six figures, which for most companies is a mere drop in the ocean of the billions of dollars in profits each year.

We still have clients coming to us and saying ‘we’ve not done anything for GDPR – please help us’

“There was so much hype built up around the potential for fines that I don’t think it was ever going to match the reality – there was a lot of fear mongering around this four percent figure,” says Starkie. Clearwater says that beyond the big technology companies whose very business is personal data, it’s difficult to identify trends in enforcement, with fines hitting consumer goods, finance transportation, retail and hospitality all fairly evenly.

But Franklin says the conversation around fines served an important purpose at the start of implementation when it came to raising awareness among senior management. “When we were building our initial business case, the prospect of big fines was a helpful stick to encourage the board to take the rules seriously,” she says. “It made it clear that data protection is a financial risk, and generally across the board, resulted in really good compliance programmes.”

The pandemic had an impact here, with many regulators sympathetic to the major changes in business practices and the strain this put on internal systems and technology. But while working from home is here to stay for many, those days of understanding may well be over. After a slow start, regulators have recently stepped things up a gear. Fines increased by 92 percent, and the average total is rapidly climbing from five-figure totals in the earlier stages.

“The scariest part for businesses is still the risk of fines, in part because the financial damage of a large fine is inseparable from the reputational damage – a large fine will always get a large amount of coverage in the press,” says Baines. “It’s true that those future-defining fines just haven’t materialised yet though. I think that comes down to the way UK regulators do things.”

The UK is culturally different from the US in this respect, he explains, with regulators generally preferring to work with businesses. It’s also down to a GDPR stipulation that fines must be proportionate. “I think the conclusion is that only in very rare circumstances would it be proportionate for a data protection breach to effectively end a business,” he adds.

It’s who you know
Another fundamental shift has been in the management of vendor relationships. Clearwater says that who companies work with has become a much more important measure than it was in the past, here drawing a parallel between the GDPR and companies’ sustainability efforts when it comes to managing relationships with third parties. “The material way of moving forward with your sustainability commitments is going to be either choosing the vendors that are on the journey with you, or moving to those that are,” says Clearwater. “In the same sense, not knowing how to answer a question on GDPR makes a company significantly less desirable to work with, which can have a big impact on business.”

Starkie, who regularly advises on the data protection elements of joint ventures, mergers and acquisitions, seconds this. “In a number of cases we’ve come across where there has been a [data protection] breach, while it hasn’t necessarily killed the deal, it’s definitely delayed it,” he says. “There are a lot more considerations that now need to be taken into account: what individuals are impacted? Which privacy jurisdictions do they fall under? What is the potential for fines? In that sense, privacy has become just like all other risks businesses must consider.”

As a general rule, compliance has been harder for long-running businesses with legacy systems that were used to handle personal data pre-GDPR, says Bird & Bird’s Franklin. Within financial services, for example, it’s in many ways easier for a fintech company or challenger bank with new systems and customers that have only been on the books for five or so years to integrate the concept of privacy by design than it may be for a traditional bank with decades-worth of customer data to grapple with.

“Newer companies tend to have the technology advancement and without the headache of legacy systems,” she says. “In that sense I would imagine regulators might come down harder on a fintech for noncompliance – it’s easier to meet the requirements of GDPR as a start-up or scale-up than it is a traditional institution.”

A delicate balance
As with most regulation, the typical business isn’t looking for 100 percent compliance, says Kroll’s Starkie. Most are looking for “a degree of compliance that demonstrates the intention to do the right thing,” he explains. “No one wants to be vulnerable to being picked off from the back of the pack, but there are no major returns for being right at the front either – there’s a real herd mentality at play,” he explains. “We still have clients coming to us and saying ‘we’ve not done anything for GDPR – please help us.’ I would say there was definitely a perception that the whole pack would be much further ahead than it is by now.”

GDPR has really popularised the sense of control, and its broad applicability is what makes it so impactful – it’s created a common language

The conviction with which this view is held varies between types of businesses, of course. “There are some industries or organisations where their entire strategy is based upon having a strong reputation – industries where individuals can quickly change between products and services for instance,” adds Starkie. “The risk of a data breach is very real for them. But for others, I would be interested to see the data on how many individuals have exercised many of their rights under the GDPR. I think it would be quite small.”

Either way, study after study has shown that privacy is important to consumers. A 2016 survey by KPMG revealed that more than half of respondents had decided against buying a product or service online due to privacy concerns. Three-quarters said they were uneasy with the idea of their online shopping data being sold on to third parties, with social media, gaming and entertainment companies singled out as those being most intrusive with personal information.

The long arm of European regulation
Another potential barometer of success is just how many other governments have followed suit in the years since GDPR implementation. Similar laws now exist in dozens of countries including Bahrain, Indonesia, Israel, Japan, Kenya, New Zealand, Nigeria, Turkey and South Korea – along with others. Arguably the highest profile is the state of California’s Consumer Privacy Act (CCPA).

And while the CCPA was initially perceived to be much weaker than the GDPR, its first settlement landed in early September, with cosmetics company Sephora fined $1.2m for failing to inform customers that it was selling their data on.

Baines says that the European Commission’s two goals were protecting individuals’ rights and facilitating business. “That second piece is often overlooked though,” he says. “The homogenisation of data protection frameworks actually makes business easier and has had a significant effect on the way tech companies are run. They are a bit like tankers: they take a while to move. Nearly five years on from GDPR sounds extraordinary, but we’re only really now seeing its effect extending across the globe.”

One country where the GDPR’s future may be uncertain, however, is the UK. While the UK is not obliged to retain the rules on its statute books since leaving the EU, it has thus far. But that was cast into doubt in early October at the Conservative Party conference when newly appointed culture secretary Michelle Donelan said the rules were “limiting the potential of our businesses.” Privacy experts were quick to point out that the global nature of the internet means it is not as simple as abolishing the GDPR. Most have taken this with a pinch of salt, arguing that it is more a political statement than anything else.

Power to the people
Complacency may remain rife among certain businesses today, but that could be a future-defining business risk for some because as Baines argues, the true potential of GDPR simply has not been realised yet. “Businesses are conscious of the costs of compliance, and this will depend on the type of business. But those that have experienced aggrieved employees or customers making requests for their data are certainly mindful of how costly it can be,” he says. “Say you have a large customer base and a big chunk of them becomes aggrieved, maybe because there’s been publicity around a data breach or some sort of consumer rights-style campaign. The sheer cost of dealing with that would be a real business risk, before you’ve even got to a regulatory issue.”

A common criticism of regulation is that they only solve past causes of crises and will not prevent future ones

There was a hint of this over 10 years ago when Austrian law student Max Schrems picked a fight with Facebook over its handling of personal data. He pointed out that the social media giant was unlawfully transferring personal data between Europe and the US, and his work forced the European Commission to twice change its rules on transatlantic data transfers. Another Max Schrems could be highly effective.

There is also the potential for class action lawsuits, in which large groups of affected individuals can bring a collective case. One such case was brought against Google with a $5.5m settlement approved by a US district judge in February 2017, and momentum appeared to be building around that time, says Baines. The decision was ultimately struck down and the market went quiet, but it could change, he adds.

“If that had been successful we’d have seen a hell of a lot more litigation, but it went completely cold – these cases haven’t been as successful as some hoped or expected, but the litigation market is nothing if not ambitious,” says Baines. And these remain frontier times for the online world, with today’s generation mere guinea pigs. As big technology companies become ever more intrusive, most people are more focused than ever on their rights. The rules are in place – it is time individuals made the most of them.

Is the alcohol industry drying up?

Posted on by itsupport

Since time immemorial, alcohol has been a part of the social fabric of human life on earth. The earliest evidence of intentional alcohol production stems back to 7,000BC, from fermented residues found in neolithic pottery jars from northern China. The Sumerians in Mesopotamia were brewing beer as far back as 3,000BC, while the Romans believed wine to be a daily necessity, with soldiers required to drink one litre per day. From our ancient ancestors through to the present day, alcohol has played a fundamental role in shaping human culture and socialisation. Omnipresent at almost all social events – from the celebratory to the sombre – alcohol is a conversational lubricant for some, a crutch for others, and simply part and parcel of everyday life for many millions more.

Ubiquitous and ever-popular, alcohol has become one of the largest and most powerful industries in the modern world. With the global alcohol trade valued at an astonishing $1.17trn in 2021 – and still growing – booze is very much big business. And while it may look like the alcohol industry is going from strength to strength, recent changes in consumer behaviour suggest that the market as we know it today may be in danger of running dry. The early signs of a culture shift on booze started emerging in 2018, with the publication of an influential new study on alcohol habits.

Years of public health campaigns have succeeded in improving our collective alcohol-related knowledge

The report, published by Berenberg Research, found that Gen Z were drinking 20 percent less per capita than Millennials – who, in turn, drink less than Baby Boomers and Gen Xers did at the same age. While previous generations may have marked the passage into adulthood with binge drinking and hard partying, today’s youngsters are much more temperate, shying away from excessive alcohol consumption and instead prioritising their mental and physical health. With more than a quarter of Gen Zers now teetotal, the alcohol industry may need to prepare itself for a sobering future.

Time, please
Almost overnight, the pandemic dramatically transformed social habits the world over – including our social drinking habits. The initial lockdowns saw a surge in alcohol consumption, particularly in those aged 40 and above, with 8.6 million UK adults admitting to drinking more frequently during the early months of the pandemic. Interestingly, while older people found themselves drinking more during lockdown, younger people were increasingly drawn to sobriety.

There has been a general decline in drinking since the end of the government-mandated lockdowns

According to research carried out by the University of New South Wales, Australians aged 18–24 were most likely to have decreased their alcohol consumption during lockdown, with 44 percent of adults in this age group reporting that they were drinking less. The trend isn’t just confined to Australia, either – British charity Drinkaware recently reported that there has been a general decline in drinking since the end of the government-mandated lockdowns – and Gen Z were once again at the forefront of this teetotal movement.

With fewer opportunities to socialise with friends, drinking somewhat lost its appeal among young people during lockdown. Fatigued by virtual drinks and zoom parties, Gen Z found themselves drawn to more traditional, tactile hobbies such as sewing, knitting and gardening. In Britain, 60 percent of those aged 16–29 reported taking up a new hobby during lockdown, while retailer John Lewis saw sales of sewing machines rise by 127 percent in April 2020, bolstered by viral DIY trends on social media.

What’s more, as young people in their millions flocked back to their parental homes during lockdown, a diminished sense of independence and near-constant familial presence may have prompted youngsters to pursue more family-friendly activities during this time. A Pew Research Centre study published in July 2020 estimated that 52 percent of Americans aged 18–29 were living with one or both parents – the largest percentage of young adults to do so since the Great Depression. Now, over two years on from the first global lockdowns, many of those who returned back home still live there, often out of economic necessity. If these new living arrangements are indeed here to stay, the social lives of these so-called ‘boomerang kids’ will undoubtedly have to change too – and the weekend boozing so often associated with young adulthood may well be a thing of the past.

Generation sensible
While the pandemic has certainly had a profound impact on our social habits, it is not the only factor behind this new wave of sobriety. In fact, youth drinking has been in decline across most high-income countries for the last 20 years. Today, young people are more likely to be completely teetotal than any generation that came before, and those who do drink alcohol tend to both drink less often and consume smaller amounts. Dubbed ‘generation sensible’ by some commentators, this new cohort of youngsters is generally considered to be more cautious and risk averse than previous generations, both in regards to their physical health and their mental wellbeing.

An increased awareness of the dangers of drinking may be one reason why young adults are increasingly choosing sobriety. Years of public health campaigns have succeeded in improving our collective alcohol-related knowledge, and for the health-conscious youth of today, drinking may simply not be worth the risk. And they have good reason to be cautious – alcohol consumption remains the leading risk factor globally for mortality and morbidity among those aged 15–24, and, as a depressant, is also linked to poor mental health. For Gen Z, the mental toll of drinking is a real sticking point – 86 percent of zoomers feel that mental health is as significant a consideration as physical health when considering drinking.

Indeed, anxiety surrounding alcohol consumption is another driver behind the decline in youth drinking. Often stereotyped as a generation plagued by anxiety, some young adults find alcohol consumption to be a source of stress, rather than an escape from it. As the first generation to have never known a world without the internet, Gen Zers are likely to have had an online presence across multiple social media platforms from a very early age. As such, they are hyper aware of their online image and are anxious of having it ruined by their drunken behaviour being caught on camera for all to see.

According to a study carried out by advertising agency Red Brick Road, 49 percent of Gen Z say that their online image is always at the back of their mind when they go out drinking with friends – so no wonder zoomers find it hard to let their hair down on a night out. Sobriety, or at least a more mindful approach to drinking, may help Gen Z to feel more in control of what is being posted of them online, alleviating any anxiety of drunken moments being inadvertently shared with the masses. After all, in an age where everyone is Google-able, the boundaries between private and public life are more blurred than ever before – as Gen Z knows only too well.

Drying out
While young people may be leading the sober curious trend, zoomers aren’t the only generation embracing a teetotal lifestyle. Across the globe, people of all age groups are beginning to reconsider their relationship with alcohol, cutting down or cutting out alcohol from their diets in an effort to prioritise health and wellbeing. Alcohol-free challenges such as ‘Dry January’ and ‘Sober October’ have been steadily growing in popularity since the mid-2010s, with millions of social drinkers signing up to commit themselves to a completely sober month. This year’s ‘Dry January’ saw 35 percent of legal-aged US adults quit alcohol for the entire month – marking the highest participation rates ever recorded for the challenge.

The Virgin Mary pub in Dublin, Ireland is alcohol-free

Across the pond in Britain, almost eight million people planned a month off drinking in January 2022 – a 22 percent increase on last year’s participation figures. What’s more, research has shown that approximately seven in 10 people who complete ‘Dry January’ continue to drink less six months later, making the challenge a useful stepping stone to sobriety for many.

Elsewhere in the world, long-held traditions and customs surrounding alcohol are also beginning to wane. Japan is known for its Nomikai gatherings – a feature of its business culture that usually involves an after-work get-together for co-workers over drinks. While in the past, Nomikai has been a central feature of working life in Japan, recent changes in attitudes towards drinking suggest that the practice could soon disappear. Over 60 percent of respondents to a 2021 survey said that they thought that work-related drinks gatherings were now unnecessary, meaning that for the very first time, more Japanese workers oppose Nomikai culture than support it.

This shift in attitudes has coincided with – and perhaps led to – a decline in drinking across Japan. According to the country’s National Tax Agency (NTA), alcohol consumption in Japan fell from an annual average of 100 litres per person in 1995, to 75 litres per person in 2020. This drop in drinking has had a significant impact on the country’s budget – taxes on alcohol accounted for five percent of Japan’s overall tax revenue in 1980, but by 2020, this figure had shrunk to 1.7 percent.

With alcohol tax revenue at its lowest level in 31 years, earlier this year the NTA launched a contest designed to boost alcohol sales among young people. The ‘Sake Viva!’ competition, which was open to 20–29-year-olds over the summer, asked entrants to develop business plans that would breathe new life into the country’s waning alcohol industry and tempt youngsters back to the bottle.

While Japan may be an outlier in its efforts to actively encourage alcohol consumption among its population, other countries around the world have noticed a similar decline in both drinking and sales. In 2021, alcohol sales in Scotland fell to their lowest level in 26 years, while in Italy, per capita alcohol consumption fell by 23 percent in the decade between 2006 and 2016. In Australia, meanwhile, drinking has fallen among all age groups, and is now at its lowest level since the early 1960s. From Europe to Australasia, the figures tell a similar story. With greater health awareness and health consciousness spreading across the globe, we are witnessing a real-time shift in attitudes towards drinking. As the harmful effects of excessive drinking become too numerous to ignore, is alcohol consumption set to become as socially unacceptable as smoking?

Social stigma
It seems somewhat inconceivable that something as ingrained in our social life as alcohol could become seriously stigmatised. And yet, we have seen it happen before. Indeed, the first half of the 20th century has been called the ‘golden age of the cigarette.’ Cheap, accessible, and – most importantly – fashionable, cigarettes boomed in popularity during the early 1900s, with approximately half of the population of industrialised countries smoking cigarettes by the late 1950s. In the UK, up to 80 percent of adult men were regular smokers by the mid-20th century, and the habit was fast spreading among women, too. Smoking was seen as not just socially acceptable but aspirational, glamourised in Hollywood releases and even publicly promoted as a ‘healthy’ lifestyle choice. In 1946, Reynolds Tobacco Company famously introduced a print and radio campaign that attested that ‘more doctors smoke Camels than any other cigarette.’

Thanks to both the effectiveness of the campaigns created by tobacco companies and, of course, the addictive nature of the product itself, cigarettes were omnipresent in all forms of public life in the mid-1900s. But, little by little, the tide began to turn on cigarettes, as new studies started to make associations between smoking and fatal illness. Then, in 1964, US Surgeon General Luther Terry published a report that definitively linked smoking cigarettes with lung cancer. The evidence was irrefutable.

And yet, the tobacco industry didn’t disappear overnight. In 1974, 10 years on from the report’s publication, half of British adults still smoked. Over the following decades, governments on both sides of the Atlantic ran a number of public health campaigns aimed at improving awareness of the harmful effects of smoking. This education drive – coupled with new legislation encouraging people to cut down on cigarettes or stop smoking altogether – saw the number of smokers drop dramatically by the end of the century.

In a matter of decades, smoking went from socially ubiquitous to socially stigmatised. And there are some early signs that alcohol could be heading the same way. According to a study carried out by Red Brick Road, 41 percent of Gen Z associate alcohol with ‘vulnerability, anxiety and abuse’ – and this apprehensive outlook on drinking has translated into rising sobriety among young people, with 26 percent of Brits aged 16 to 24 identifying as fully sober. Across the British population as a whole, 20 percent do not drink alcohol, marking a three percent increase in the proportion of non-drinkers since 2015. What’s more, a third of pub visits are now completely alcohol-free, demonstrating a shift towards sober socialising even in traditionally boozy environments. Sobriety, it seems, is having a moment. And as the world begins to grapple with a worsening cost-of-living crisis, non-drinkers may soon find that they are protecting their wallets along with their health.

Pinching pennies
The COVID-19 downturn was branded a ‘once in a lifetime’ economic event. And yet, just two years on from the start of the pandemic, the world stands on the precipice of another devastating recession. On both sides of the Atlantic, higher-than-expected inflation has seen prices of everyday goods skyrocket, severely impacting household budgets and causing many families to tighten the purse strings. In times of hardship, ‘unnecessary’ purchases are the first things to be struck from the weekly shopping list, and for many, a night at the pub falls under this ‘frivolous’ category.

The price of everything from food to fuel is rising, and alcohol is certainly no exception. The average cost of a pint of beer in the UK has shot up by 70 percent since 2008, hitting £8 for the very first time in some London establishments. At such eye-watering prices, it’s perhaps no surprise that Britons have been cutting down on boozing in an effort to save some pennies. According to a survey carried out by YouGov, 27 percent of Brits say they are now spending less on alcohol compared to last year, while seven percent of respondents have cut out drinking altogether, citing cost-related reasons.

There is a long-held belief that the alcohol industry is recession-proof. The argument, as put forward by some market analysts, is fairly convincing – that hard times can lead to hard drinking as people look to ‘self-medicate’ during periods of intense stress. But the reality is rather more complicated. The global financial crash saw a period of price stagnation and falling beer sales, and global alcohol consumption would have fallen by two percent in 2009, had it not been buoyed by increased consumption in Brazil, Russia, India and China. What’s clear is that in times of economic hardship, drinking outside of the home takes the biggest hit, as financial anxieties see people going out less and staying at home more. With many households already reporting that they are spending less on alcohol, it’s not difficult to imagine that this trend will continue as the cost-of-living crisis worsens over the winter months.

The current crisis is set to last at least into the second half of 2023, and household spending power is expected to plummet by a staggering £3,000 in the UK – a contraction in household income twice as severe as was triggered by the global financial crash. While the alcohol industry may be recession-resilient, it certainly isn’t recession-proof when people are forced to count every penny.

Evolving tastes
The alcohol industry is facing a double dilemma. In the short term, the escalating economic downturn may lead individuals to re-evaluate their drinking habits in an effort to make savings. In the long term, a sustained societal shift towards sobriety and a more temperate approach to alcohol consumption could see this long-profitable industry run dry.

One thing is for certain, though – the alcohol industry won’t be admitting defeat anytime soon. Already, brands are responding to their customers’ new teetotal preferences. The low-and-no alcohol industry has boomed in recent years, with off-premises sales reaching an impressive $3.1bn in 2021. In Britain, sales of low-and-no alcohol beers have almost doubled in the last five years, with alternative versions of popular brands helping the sober curious to make the switch. Whether they fancy a Budweiser or are more partial to a Becks, customers are now spoilt for choice when it comes to alcohol-free options. Long gone are the days when pubs could only offer non-drinkers a tepid lemonade – and the low-and-no alcohol market shows no sign of slowing down anytime soon (see Fig 1).

The world’s largest brewer, Anheuser-Busch InBev, has set itself an ambitious target of having low-and-no alcohol beers account for a fifth of its overall sales by 2025. While it may not reach this lofty goal, the ambition alone marks something of a culture shift in how some of the world’s most powerful beverage companies are looking to market and promote their products. Alcohol-free is not merely a fad, but a lucrative new revenue stream – one that could be worth more than $1.7trn by 2028.

Today’s non-drinkers have more choice than ever in where they choose to enjoy a booze-free tipple, too. Sober-friendly ‘dry’ bars have been popping up in cities across the globe, creating safe and inviting spaces for teetotallers to enjoy a night out. From Dublin’s alcohol-free pub, The Virgin Mary, to swanky speakeasy Getaway in Brooklyn, this new wave of abstemious establishments cater to both the committedly sober and those who simply want to experience a different kind of night out. Often softly lit, with trendy, ‘instagrammable’ decor, these sober bars tend to focus on creating an experiential offering for their customers – yet another aspect that appeals to the growing Gen Z clientele.

Having recently surpassed Millennials as the most populous generation on earth, Gen Z’s buying power is growing, as is their power to shape and dictate future consumption habits. As young people around the world increasingly embrace sobriety, the alcohol industry will need to follow suit – as paradoxical as it may seem. This new trend poses a challenge, certainly, but also an unmissable opportunity. If brands can shift their focus towards producing and marketing more alcohol-free alternatives, they could play a key part in promoting a healthier, more moderate future for teetotallers and regular drinkers alike. Cheers to that, indeed.

A snapshot solution for delivering personalised wealth management services

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It is often said that photography is part art and part science. It relies on myriad factors and culminates in one moment, when the shutter button is pressed and released and light rays are redirected to a single point, capturing and documenting a single moment in time. If you get everything right, you capture a moment of perfect expression. If you don’t, your subject is blurred or moving out of frame, or worse. But the journey to taking the perfect photo begins long before that. It is a pastime that does not just rely on technical factors, light or equipment. Photography is framing, choice of primary subjects, background, colours and above all, message. A good photograph is one that triggers an emotional response.

Wealth management requires the same level of attention and multidimensional mindset to properly meet clients’ needs and to create a contextualised image. When observing a picture it is crucial to approach it not just analytically, but in an emotional sense too, because we’re looking at a unique perception of experience. We must fully understand it and create a connection. It is the same in wealth management, a sector where customers, by type and need, are difficult to frame in a single category. A crucial element of being a wealth manager is the ability to come at the same subject from a different perspective, and to understand that what works in one instance does not necessarily work each and every time.

A crucial element of being a wealth manager is the ability to come at the same subject from a different perspective

The essential relational aspect that defines a good wealth manager is just this, the ability to take a picture that accurately reflects the needs of their client. This is what endears customers to us. Financial performance is not the most important aspect. We obviously do our best in this regard, but critically we provide integrated analysis capability, enabling us to ‘frame’ a client at 360 degrees. Being able to provide the right answer to a client based on their activity and preferences as well as taking into account alignment with regulations is – and continues to be – one of the most rewarding factors in the market. This is because it is a dual approach that delivers a unique and personal experience and one which guarantees full transparency.

By delving into the client’s universe where the most personal themes are combined with technical needs, the job of a wealth manager becomes more than just that of a passionate trader and a financial portfolio manager.

A new picture
Though 2022 has been marked by uncertainty and inflationary pressures, economies recovering from the pandemic have seen the global HNWI population rise by eight percent, and, according to a report published by Capgemini, “wealth management firms will need new and improved ways of delivering personalisation to augment client experience” if they are to capture this new wealth.

Becoming a more resourceful partner for our clients, offering them the opportunity to be supported by a leader in the international markets and capable of proactively servicing clients by delivering any type of personalised service for their requirements is the key to building up an influential market position. Indeed, the wider market trends include the beginning of generational wealth transfer, which will see an influx of Gen X, Gen Z and Millennial clients all with an entirely different set of needs and expectations that wealth management firms need to be prepared for.
Being perceived as a true partner means acknowledgement as a qualitative contributor and a reliable professional, it is a relationship we hope to nurture throughout a lifetime through a personal mix of values, culture and hard work. We don’t just work in terms of global risk and portfolio balancing.

It was the photographer Edward Steichen who said “a portrait is not made in the camera but on either side of it,” and it is a similar sentiment to what we aspire to as wealth managers. We know the pattern of the markets, but we wish to gain a better understanding of our clients, and in forging these relationships, ourselves too. This is why managing wealth is not simply the ability to navigate in the financial markets, but a whole lot more.

Bringing quality of service to the Forex market

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In recent years, a slew of investors have made the move from traditional markets to forex, recognising the vast potential within the sector. With a daily turnover of more than $5trn, forex is the world’s biggest and most liquid financial market, drawing those looking to capitalise on the opportunities. FX trading is at the heart of M4Markets – a CFD broker that also offers trading in commodities, indices, shares and crypto, partnering with leading financial institutions to provide a deep liquidity pool. Founded in 2019 by a group of financial experts, the brokerage offers two platforms – MT4 and MT5, with accessible prices enabling traders of all experience levels to invest. World Finance spoke to M4Markets to hear more about the services on offer, its customer-centric approach and how the brokerage is using technology to optimise trading conditions for its customers.

What is M4Markets background and what were your goals from the outset?
M4Markets was founded by investors and traders who had long-standing experience in investment banking, bringing a wealth of valuable knowledge and insights. One of the forces driving the birth of M4Markets was the lack of quality service in the FX and CFD industry. We wanted to build a brokerage where all clients would be treated equally and where they could enjoy a premium service.

Our resources and tools are available to everyone, without any discrimination

We also wanted to build a brokerage that was fair and transparent, which is why we invested in best-in-class technology and have ensured that we are very transparent about all costs and charges.

How do you define CFD trading and what are the advantages of trading CFDs?
Trading CFDs (contracts for difference) allows you to trade the value of an underlying asset without owning it – meaning it can be bought at a lower cost than buying the asset outright. It’s easier to execute, provides more flexibility and is faster paced than traditional investments in markets such as stocks, futures and indices. Of course, it should also be mentioned that there are increased risks with trading CFDs, which is why risk management is crucial.

M4Markets prides itself on its customer-centric approach; what are the key tenets of this and how does it benefit traders?
We believe all traders, whether they’re investing $5 (which is our minimum deposit) or hundreds of thousands of dollars, should be treated equally. We understand that whatever amount is being invested is important to the trader, and we make sure that our support teams make time to assist all our traders equally. At the same time, our resources and tools are available to everyone, without any discrimination. This means that all traders have equal opportunities in the markets, no matter what their investment background is.

How does your approach differ from other brokers?
At M4Markets, we believe our traders are our biggest assets, and we do our best to ensure they have every opportunity available to them. We aim to be completely transparent, and we have ensured that our trading environment is one of the best in the industry.

What advantages are there to trading with M4Markets?
As a multi-regulated broker, we offer various layers of protection to our traders as well as an extremely competitive trading environment, with low costs and a multitude of assets available to them.

What is the current trading environment like and what are the key challenges for the future?
The industry is currently being reshaped by tighter regulation across the globe. This is ultimately in the interests of traders, but we expect that as regulation continues to change, there will be challenges to overcome. How this develops remains to be seen.

How can technology help overcome the challenges?
As the forex industry is extremely liquid, changes are very rapid and technology helps make sure that when a client wants to place a specific trade at a specific price, they can. We understand that fast execution and low latency is crucial and essential in offering a stable and reliable trading environment, so we have invested in cutting-edge technology to help deliver the best possible service.

How does M4Markets differ from competitors with its use of technology?
We offer the two most popular trading platforms in the industry: MT4 and MT5. These offer vast resources to traders, while at the same time being very user-friendly. We are also one of the few companies to offer two copy trading systems – one of these is available through an app and connects traders to a huge community of other traders, while the other is more exclusive and allows traders to choose their mentors.

What’s your vision for the future?
We are expanding our regulatory profile and we are also testing new tools and resources that we hope to make available to our clients. We are beyond excited with our growth so far – we have managed to establish ourselves as one of the key competitors in the sector, and we look forward to the opportunities the future presents for both us and our traders.

Innovative banking in Bulgaria helps facilitate the green transition

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Our constant desire to develop, be sustainable and to seek innovation is one of the more typical traits of Postbank and has been for more than 30 years now. During this time, we have proven ourselves as one of the most successful systemic banks in Bulgaria. Logically, we also grew to be a reliable partner, employer and socially responsible company. Furthermore, we have established ourselves as an institution that customers trust and offer them solutions for their future. This would not be possible without the efforts of our entire team. This is why I would like to thank all my colleagues, customers, shareholders and the strong international group of Eurobank to which Postbank belongs.

We offered our customers several next-generation innovations: we were the first bank to introduce Smart POS that turns a smartphone into a POS terminal, the first certified bank to offer instant payments, and the first metal credit card in the Bulgarian market. Another innovation we launched is our unique next-generation mobile wallet ‘ONE Wallet’ with which customers have an even better customer experience and we will soon be announcing further upgrades. Our customers have active and flexible control over their funds 24/7 which is an irreplaceable convenience nowadays.

Furthermore, in the past two years we started a complete overhaul of our branch network and invested in modern digital express banking zones which were immediately recognised as a preferred alternative to banking at a register. Thanks to the intuitive devices in these zones, our customers can easily and quickly carry out a major part of the main banking operations after simply identifying themselves with their debit or credit card, without having to be registered for internet banking.

Green future
The products and services we offer our customers are developed in line with the contemporary market needs. Excellent customer experience is a permanent part of the bank’s corporate policy. We will continue developing it, investing in new technologies and a green future aligned with our ESG strategy.

Our main goal is to be as useful as possible to our customers, providing them an excellent experience and offering them modern solutions, spaces and concepts that best meet their needs at any time and any place. Therefore, we maintain uncompromising standards regarding the quality of our broad spectrum of products and services. Being leaders in the field of digital banking is not only a challenge, but also a motivation to continue growing in this field because our customers appreciate it and expect it from us.

We help businesses adapt by applying no-waste, energy efficient and smart technologies

Our well-functioning model is to use the most advanced technological infrastructure in balance with the human factor, offering clean, fast, personalised and secure services 24/7, servicing our customers – both individuals and companies – large, medium and small, and to contribute to improving the perspectives for the Bulgarian economy and society.

Our strategy is to actively manage our impact on the environment, not to restrict sectors from lending. We realise that implementing the green transition is a complex and lengthy process and we see our role as one in which we help businesses adapt by applying no-waste, energy efficient and smart technologies, investing in innovations of all kinds.

We are confident in the role we have to play in carrying out the green transition – it affects all economic agents, not only businesses but households as well – and without our participation it would not be possible. The significance of introducing energy efficient and smart solutions in both companies and households alike is especially noticeable now, when energy prices are unpredictable, inflation is high, and consumers are trying to find ways to minimise their expenses and save their funds. This is why we offer a broad range of different products to meet the needs of our customers.

Environmental, social and governance (ESG) initiatives become increasingly important within the banking sector since institutions correct their strategies and practices in order to have even better results. Financial institutions have the opportunity to use these initiatives and make them strengths in the market. We recognise our key role in setting the example for our customers and strive to offer eco-friendly products in our loan portfolio in order to be in line with market trends and our customers’ changing needs.

This is why, and in relation to the abovementioned market trends, social commitment regarding ecology and the changing needs and interests of more and more customers investing in energy efficient improvements and homes, we will soon launch the market-first green mortgage. This innovative product offers financing for purchasing an energy efficient property (class A and above) or other energy efficiency improvements on existing property (for example purchasing solar panels), aiming at improving the energy characteristics of the real estate. Customers will receive a special interest discount on the interest rate of the mortgage and will be able to save on their monthly expenses for the mortgage.

An efficient offering
We have analogical solutions for business – we offer both standardised products and such that cater to the specific needs of our customers and are in line with the specificity of their activities, so we have a solution to all kinds of situations: purchasing energy-efficient machines, electric vehicles, introducing energy efficiency measures in manufacturing premises, we have solutions for improving process efficiency and energy and raw material consumption. In early 2023 we will also launch a ‘green’ corporate loan for business.

I would like to point out that Postbank was the first to de facto start the wave of consolidations in the market – initially with the deal for the Bulgarian branch of Alpha Bank in 2016 and later with the acquisition of Piraeus Bank Bulgaria in 2019, carried out for a record-breaking four months which demonstrates our solid expertise. These acquisitions were especially important for us as they provided us a larger market share, bigger branch network, more customers, new opportunities to invest and digitalise and better customer service.

Our main goal is to grow organically but we are ready for new consolidations and will not miss a single convenient acquisition opportunity. The Eurobank group also undertook a series of acquisitions of other banks in the region in 2021.

Last year Postbank completed 30 years of successful presence in the Bulgarian market. On this occasion, a special event was organised and echoing comments made then, Eurobank Group takes pride in Postbank’s achievements during these 30 years and enjoys its leading position in the Bulgarian market. The group will remain open to market opportunities to further grow if and when they arise.

It is important to us that shareholders appreciate what we do and wish to support us in our plans for developing business in the Bulgarian market.

Sustainability with substance for Nigeria’s largest bank

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‘Sustainable finance’ is one of the industry’s most overused terms, but at Access Bank it has substance, forming a crucial part of its DNA. While ESG (environmental, social and governance) has been somewhat sluggishly adopted by the industry as a whole since it was introduced in the global arena in the 1960s, Nigeria’s largest bank has creatively embraced every strand of these principles. Recognising that ESG stretches beyond the commitment to minimise the business sector’s effect on society and the environment, Access Bank goes the extra mile. Whether supporting the fight against malaria or providing upcycled pencils to thousands of children, each initiative is designed to do good – inspiring fellow industry players to follow suit.

The history and challenges of ESG
The ESG guidelines were established some six decades ago in its nascent form and continue to develop. The traditional business orthodoxy that valued profit above all else meant that it was acceptable to externalise the various destructive consequences that businesses were wreaking on the environment. Especially so when, back then, the chime of climate change warning bells seemed so far off, and any doom-laden predictions they presaged seemed likely to remain uncrystallised for several centuries.

However, as environmentalists and scientists began to shine a light on irresponsible business practices and the detrimental effects of these on both human and ecological health, the need for scalable guidelines and principles around sustainability became clear, and institutions needed structures through which they could be held to account. In 1987, the Brundtland Commission of the United Nations (World Commission on Environment and Development) released the Brundtland Report, complete with guidelines that organisations needed to adopt to achieve sustainable development. In 1992, the United Nations Environment Programme (UNEP) issued the Statement of Commitment by Financial Institutions – which rippled into the creation of the UNEP Finance Initiative.

Fast forward through several governing bodies, working papers, and initiatives, and we arrive at the Nigerian Sustainable Banking Principles (2012), which Access Bank initiated and led. And, underpinning all of this is the growing body of evidence pointing to the unmistakable benefits of sustainable finance. For example, from a meta-study carried out by Fidelity International, a leading investment management UK-based company, incorporating sustainable finance improves corporate performance and can boost stock market value, among other benefits.

Moreover, employees and investors are interested in companies that take corporate responsibility and sustainability seriously. According to the ‘Global Sustainable Fund Flows: Q2 2022 in Review’ report, there has been a steady but dramatic increase in sustainable fund inflows – from $5bn in 2018 to nearly $70bn in 2021, with a gain of $87bn of net new money in the first quarter of 2022, followed by $33bn in the second quarter. There’s no denying there are challenges – presently within Nigeria, no metrics for measuring industry-wide performance exist, and there isn’t a generally accepted framework for the implementation of ESG, for example.

But it’s important to highlight the progress that has been made. On a broad scale, Nigerian financial institutions have recorded, among other things, the implementation of waste management and energy efficiency practices, automation of environmental and social risk management systems, development of financial products and services targeted at women, improvement of maternity leave policies, and the creation of women networks.

The Access Bank ESG formula
In a bid to tackle climate change and its hazardous effects, Access Bank has launched a series of initiatives aimed at reducing carbon emissions and moving Nigeria – and the world as a whole – toward the global Net Zero vision. So, what initiatives have the green-minded bank come up with? In an effort to reduce its carbon footprint, it has pioneered waste recycling within Nigeria’s financial sector, expanding its recycling operations to 75 locations across the country.

Incorporating sustainable finance improves corporate performance and can boost stock market value

Keen to put existing materials to good use, the upcycling project ‘paper-to-pencil’ resulted in eco-friendly writing instruments, made available for over 10,000 school children. Old tyres, meanwhile, have been given a new lease of life as material used for furniture.

To continue this theme, the bank collaborated with SME Funds in 2017 to execute the ‘green social entrepreneurship programme.’ This empowered 238 entrepreneurs in the field of clean cooking stove technology. Some 70 percent of the beneficiaries were women, who also benefited from start-up capital. Since the launch of the programme, beneficiaries have produced and distributed 7,500 litres of bio-gel, with returns exceeding $39,317.28 – reaching 598 households and impacting 2,100, with 287 metric tonnes of CO2 eliminated in the process. During the pandemic, the bank offered support to families in need by way of the ‘family cooking support programme,’ providing clean cooking technologies to those experiencing lockdown constraints.

Through this programme, Access Bank also distributed over 5,000 litres of biofuels to support more than 2,500 families in 100 communities. In addition, the programme benefited over 900 small-business owners. To offer a set of tangible figures – the programme saved beneficiaries a daily $3.25 per family, along with time savings of 225,000 minutes, while 8,000 tonnes of CO2 was eliminated.

Community support on every level
Access Bank’s ongoing investment in its host communities is far-reaching across the pillars of health, education, sport, arts, environment and social welfare. Over the years, Access Bank has invested about $38m in a range of strategic CSR initiatives, reaching 1,519 communities and impacting 30,623,790 lives and a further 834 NGOs. Through the bank’s employee volunteering scheme, employees have invested over 2.7 million hours of their time and resources, impacting over 530 communities across the six geo-political zones in Nigeria. This true mark of staff engagement is testament to the seriousness with which Access Bank approaches sustainability.

The bank’s online financial literacy platform, Access 9ijaKids, has garnered much attention. Launched during the pandemic, the free-to-use platform provided financial literacy education to over 100,000 children and parents. The platform and its engaging games were played by some 1,700 children.

Promoting financial inclusion, the bank has launched initiatives – large and small – to empower women. ‘Womenpreneur Pitch-A-Ton,’ for instance, is an initiative through which businesswomen within Nigeria and beyond are provided with world-class business training, finance, and mentoring opportunities. So far, over 250 women across Africa have received free mini-MBA certifications and financial grants worth $21,123. The Access Bank W Power Loan initiatives, meanwhile, disbursed loans worth $30m to some 1,300 women, helping to support asset acquisition and infrastructure upgrades, providing business working capital.

Responding to a rising need for financial support among homes and businesses, Access Bank unveiled a business recovery fund intervention programme to support individuals, businesses and communities affected by the nationwide protests to end police brutality. As of the bank’s last report, 66 businesses have been supported with interest-free loans. A total of $7,493,817 has been distributed to businesses to catalyse growth and sustainability. In addition, 105 micro-businesses have availed themselves of grants and funds disbursed to the tune of $55,757 across eight states in Nigeria.

At the height of the pandemic, the bank led the fight against COVID-19 and rallied several leading private organisations through the private sector Coalition Against COVID-19 (CACOVID). Under the auspices of the coalition, the bank donated $2,497,939 and raised over $87,427,872 alongside other organisations and individuals who clubbed together to provide medical equipment, treatment, training, testing and isolation centres to all states in Nigeria. The coalition also provided the Nigerian Centre for Disease Control with over 60,000 testing kits and spearheaded a palliative drive to feed 1.7 million households in Nigeria. These are only a few examples of initiatives the coalition and Access Bank independently launched to mitigate the effects of the pandemic.

The ‘maternal health programme’ is another Access Bank brainchild, developed in partnership with HACEY Health Initiative. The bank’s commitment to improving maternal health has also secured best-practice training for 540 health workers, and the distribution of 75,000 long-lasting insecticide nets to pregnant Nigerian women and mothers of children under the age of five.

Sustainability in governance
Inclusion and diversity are high on the agenda at Access Bank. The bank’s board of directors – comprised of 35.3 percent women, 64.7 percent men and a healthy mix of varied cultural backgrounds – reflect its commitment to improving diversity and inclusion within its organisation and the country as a whole.

Access Bank sits on the board of the HIV Trust Fund – a private-sector-led platform focused on obliterating the HIV/AIDS epidemic in Nigeria. Through the fund, the bank, along with other leading organisations, has raised N62.1bn ($141m) towards accelerating the achievement of the UNAIDS (Jointed United Nations Programme on HIV/AIDS) 95-95-95 epidemic obliterating strategy.

Fighting malaria is another key concern. Access Bank sits on the board of Corporate Alliance on Malaria in Africa (CAMA). Through this alliance, it has begun mobilising private sector capabilities and resources for sustained support towards lowering malaria incidence and prevalence in Nigeria and beyond. The goal, according to the bank’s representative and Head of Sustainability, Omobolanle Victor-Laniyan, is to save 50,000 lives in Nigeria and other countries across Africa by 2023. So far, it has donated insecticide-treated nets, malaria rapid diagnostic test kits, and multiple doses of IPTp-SP to primary healthcare facilities in over 12 communities in Nigeria. The Alliance has also benefited over 6,600 pregnant women across Oyo, Ogun and Lagos, Nigeria.

Working with the United Nations Environment Programme Finance Initiative (UNEP FI) and other leading global banks, Access Bank contributed to the development of the Principles for Responsible Banking (PRB). The Principles serve as the global benchmark for banking institutions with regard to knowing the requirement for becoming responsible banks. Being the only West African Bank on the Core Group, Access Bank served as Africa’s Consultative Lead on the Principles. In this capacity, it has helped galvanise other banks into becoming signatories to the Principles.

Access Bank’s efforts haven’t gone unnoticed – in recognition of its ESG and sustainable finance achievements, Access Bank has been the recipient of several national and international Awards including the Central Bank of Nigeria Award for Sustainable Bank of the Year (three-time consecutive winner); the Karlsruhe Award for Outstanding Business Sustainability Achievement (six-time consecutive winner); and World Finance Award for Most Sustainable Bank (11-time winner). As Access Bank consistently demonstrates, it pays to be good.

Mexico’s comeback currency: a story of effective monetary policy

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King Dollar dominated the headlines in 2022. The mighty greenback attracted massive ‘risk off’ sentiment, driven by a new war in Europe – the tragic Russia-Ukraine conflict – and a raging inflation crisis. Central banks, almost everywhere, have stepped up interest rates as fast as they dare in response, despite clear recession and stagflation risk. Yet the Mexican Peso has defied the global currency storm, rising above the dollar and euro. “In fact,” explains David Razú Aznar, CEO at Afore XXI Banorte, “the exchange rate has returned to levels close to those prior to Covid.” Then, a dollar bought 24.26 pesos “but by the end of the third quarter of 2022 it had already dropped to 20.07.”

To underline Razú Aznar’s point, not long before World Finance went to press MXN had strengthened again, with a dollar buying almost 20 pesos. This is the consequence of consistent hawkish action from Banxico – 11 consecutive increases by late September 2022 – led by Victoria Rodríguez Ceja, the first woman to run Mexico’s central bank.

But to understand the bigger picture, and to understand just how far the peso has come, we need to roll back to 1994, to the so-called ‘Tequila Crisis.’ This was a current account deficit storm part-caused by short term USD denominated debt instruments called ‘tesobono’. Because Mexican foreign exchange reserves were shrinking the Mexican government introduced short-term debt instruments for investors, which also gave them a measure of devaluation protection. That didn’t stop investors pulling their money out of the country. “In just one day in December 1994,” remembers Razú Aznar, “the Mexican Peso lost 22.27 percent of its value, going from 3.94 to 4.88 pesos per dollar.”

It was just the start. Just a few weeks later one dollar bought seven pesos. “This motivated the reform that would give autonomy to Mexico’s central bank Banxico, prioritising currency stability,” says Razú Aznar. Currency freefall is always terrifying, decimating spending power for workers while wages and public confidence can stagnate. Yet nearly a decade and a half after the 1994 crisis the 2008 global financial seizure hit. The massive financial panic caused by the subprime mortgage loan crisis had major implications for the Mexican exchange rate.

“In fact, the Peso experienced a depreciation against the dollar of half its value,” remembers Razú Aznar, “when the exchange rate went from 9.93 pesos per dollar at the end of the third quarter of 2008 to 14.90 pesos per dollar in the middle of the first quarter of 2009.”

From nadir to investor respect
1976 was a low point for the peso – a crushing devaluation. Since 1954, parity had been fixed at 12.5 pesos per dollar. In September 1976 the federal government established the parity at 19.90 pesos. But a month later the price descended steeply to 27.97 per dollar. This, says Razú Aznar, “was a classic example of the unfortunate macroeconomic and monetary policy that Mexicans are afraid of because although there were early external factors that influenced the outbreak of the crisis, in the end the internal management was the cause.”

Mexico’s foreign public debt escalated from $4.2bn at the end of 1970 – 12 percent of GDP – to $19.6bn by the end of 1976. This was equivalent to 35 percent of GDP – a staggering deterioration. But this was not enough to finance non-stop public spending growth remembers Razú Aznar, “so the government established compulsory credit from Mexican commercial banks, resorting to financing the fiscal deficit from the central bank. All of this caused an increase in inflation until it reached 27.2 percent in 1976. The devaluation was inevitable due to capital flight.”

Mexican monetary policy, carefully plotted, has strengthened the peso

Despite capital markets nervousness over global recession risk, the difference between monetary management from the Mexican authorities today compared with the past is profound – a night and day difference, in fact. Mexican monetary policy, carefully plotted, has strengthened the peso. Since the middle of 2021, as other national central banks tightened their own money supply, central bank Banxico has upped its reference interest rate, surging from four percent in March to its current level – 9.25 percent. This is the highest level since 2008.

“And this upward cycle of rates implemented since June 2021 is giving results, as has been emphasised the International Monetary Fund (IMF), when stating that the rate increases helped strengthen the credibility of the central bank, prevented inflation from taking hold, and have prevented the Mexican peso from being a source of instability for inflation.”

Given the scale and speed of interest rate rises by the US Federal Reserve, determined to fight the inflationary storm hitting global goods and services, Banxico has maintained the reference rate spread between the US and Mexico, “so rates in our economy remain attractive and the net inflow of capital is controlled to avoid a possible weakening of the peso,” confirms Razú Aznar.

Practically, the upward interest rate cycle, implemented since June 2021, continues to ring-fence the peso’s reputation. Public debt is another challenge President Andrés Manuel López Obrador has taken head on, a crucial undertaking given the pressures on emerging economies emerging from the pandemic. Mexico has come out of the experience in stronger shape than many developed countries.

Public debt realistic and manageable
“The ratio of public debt to GDP,” says Razú Aznar, “currently represents 49.1 percent for Mexico, within which the external debt only contributes 15.9 percent. The weight of external debt has dropped from 19.1 percent in 2020, due to a Ministry of Finance strategy of taking advantage of the country’s financing conditions before the current increase in interest rates across the world.”

According to the International Monetary Fund, advanced economies’ gross government debt as a ratio of GDP climbed from 103.9 percent to 123.2 percent between 2019 and 2020 – a huge rise. In late 2022 this ratio is still around 112.4 percent overall. Across emerging and middle-income economies this ratio, in contrast, increased from 54.5 percent to 64.7 percent and remains at 65.1 percent in 2022, overall. “For some countries, such as Brazil, it reaches 88.2 percent today,” points out Razú Aznar.

“In Mexico, this fiscal measure rose from 53.3 percent in 2019 to 60.1 percent in 2020, but was later reduced to 56.8 percent in 2022.” This means meaningful balance of payments safety, in comparison to many other economies that now look increasingly vulnerable to debt over-reach.

Remember, says Razú Aznar, that Mexico is a major crude oil exporter, and that the income of the Mexican federal government depends significantly on this vital resource. “This is why the fiscal performance of the country was remarkable during the pandemic since its price went practically to zero.” But with a major recovery in the crude oil price, the resilience of the peso’s value is further supported.

This has not gone unnoticed by the global credit rating agencies who now increasingly judge Mexico’s credit grading as among the most reliable of all LATAM countries and emerging economies. This confidence boost is crucial reiterates Razú Aznar. “Sovereign risk ratings affects both a country’s financing conditions and are a reference point for debt issuers in the economy.”

In late 2021 when DXY dominance was re-building, one dollar bought almost 22 pesos. A year later, late 2022, one dollar buys 19.5. It’s just as impressive against the euro. By late 2021, a euro bought 24.5 pesos. By early November 2022, a euro was buying 19.4 pesos – a 20 percent depreciation in favour of MXN.

Pension power provides stability
Mexico’s retirement fund industry in Mexico, the Afores, has long been the main vehicle for channelling the savings of most Mexicans. A founding administrator of retirement savings in the Mexican pension system, Afore XXI Banorte has been at the heart of the pension system for 25 years. But any change must be sustainable, as well as closely stuck to.

25 years after the start of the defined contribution pension scheme, Afores has now accumulated close to $250bn – about 18.5 percent of Mexico’s total GDP. “This source of financing for national investment is another major factor that works in favour of the country’s macroeconomic stability, reflected in the recent strength of the peso,” Razú Aznar points out.

“An excellent example of this is the role that the Afores have played with domestic sovereign debt. As of October 2022, Banxico reported that non-residents reduced their participation in the sovereign debt market implying a net outflow of 110.2bn pesos ($5.2bn). Nonetheless, the Afores at the same time, have increased their total position by 82.6bn pesos ($4.2bn) in sovereign debt, which is equivalent to 75 percent of the net outflow reported by non-residents. This has somewhat contributed to the strength of the Mexican Peso.”

And such leverage will be increasingly important. In 2020 President Obrador launched a bill to reform Mexico’s pension system. This carefully choreographs gradual increases in the contribution rate from 6.5 percent of wages to 15 percent by 2030. “This will enhance the scope of the Afores as a source of financing for economic activity,” believes Razú Aznar. “It is estimated assets managed by the Afores will reach 56 percent of GDP in 2040, compared to pre-change estimates of 35 percent.”

“We are very pleased,” finishes Razú Aznar, “to contribute responsibly to the macroeconomic stability of the country and, at the same time, to support the proper management of public monetary policy in Mexico.”

Building a more sustainable airline industry

Posted on by itsupport

We travel to see and understand the world, learning more about other people and places with each flight. At the same time, our travel and emissions contribute to climate change, impacting the same world and nature we seek to understand. How do we balance the critical utility of travel to connect people, promote the beauty of our planet, and power economies, while also limiting the impact on the environment we have at the same time?

This is the question we all face in the airline industry. JetBlue is proud to have been one the first airlines to sign the Climate Pledge to achieve net zero carbon emissions by 2040. We approach our sustainability efforts with the core belief that a healthy environment is more than a nice goal – it’s crucial for our business and the protection of the beautiful destinations that we fly to. To hold ourselves accountable during our drive to achieve net zero carbon emissions, we have set a series of specific, measurable, dated, and aggressive decarbonisation targets and will soon be sharing our near-term science-based target approved by SBTi.

In the short and medium term, we continue our focus on in-sector reductions with moves like investing in sustainable aviation fuel (SAF), growing a more fuel-efficient aircraft fleet, electrifying our ground service equipment, and championing improvements to the aging air traffic control systems that have the potential to not only reduce fuel burn, but offer a better travel experience for everyone. We’re also thinking long-term and exploring innovations on the horizon with alternative fuel technology like electric or hydrogen-based aircraft. This is a focus area of our JetBlue Ventures subsidiary, which invests in and partners to accelerate the future of lower-carbon travel technology.

But we also know we cannot achieve our net zero goals alone. Partnerships will ultimately be the most pivotal thing to help us all reach our sustainability targets. Whether it is working with regulatory bodies and governments for policy support, joining consortiums like the Sustainable Aviation Buyers Alliance (SABA) and Aviation Climate Taskforce (ACT) to share best practices, or partnering with like-minded businesses to find collaborative solutions, these partnerships require balancing priorities and mutual trust. For JetBlue, finding and championing those immediate opportunities to make an impact helps show everyone what is possible when we work together and encourage each other to push forward.

Sustainable flying
One of the most promising solutions we see to reach net zero, and the biggest example of where partnerships are critical, is with sustainable aviation fuel. SAF drops directly into existing aircraft and infrastructure with no impact to safety or performance and typically offers 80 percent reduction in emissions per neat (before blending) gallon on a lifecycle basis. Because of this, once SAF reaches commercial viability at scale, it will be a game-changer for our industry, driving down our emissions significantly and quickly. But despite the technology being well proven, SAF has long suffered from a ‘chicken and egg’ problem: there is a very limited supply available, which keeps prices high. With high prices, there is suppressed demand and ability from airlines to buy more of it. To reach the economies of scale necessary to increase supply and drive down the price premium, we need support.

Partnerships will ultimately be the most pivotal thing to help us all reach our sustainability targets

Public policy is one way we can advance SAF. Government incentives can close the price gap between SAF and conventional jet fuel, such as the United States’ recently passed Inflation Reduction Act. We hope to see more state-based programmes like the successful California Low Carbon Fuel Standard (LCFS) programme in the Northeast US where JetBlue and so many other world airlines operate. In the absence of further policy support, all SAF for regular supply is likely to be delivered into California only. We regularly engage in advocating for these federal and state policy measures, participate in industry groups, and work directly with current and future SAF producers to encourage the emerging market.

Another way we can signal demand to the market is through the help of corporate partnerships. As more and more companies focus on their own sustainability goals, they are increasingly looking at their ‘Scope 3’ emissions: indirect emissions organisations are not directly responsible for but that exist within the value chain, such as those produced through corporate travel. By offering JetBlue-issued SAF Certificates to organisations, we have found a way to help offset the cost premium of the SAF JetBlue purchases, while also giving corporate customers the ability to directly and meaningfully reduce their business travel emissions. This not only allows us to continue to buy more SAF but furthers the entire market – encouraging a more sustainable future of flight.

This represents a shift in mindset for many. Only when we stop thinking about just where we can affect change within our own areas of expertise and start thinking about how we can collaborate for shared benefit, we realise our true potential and further our shared goals. At JetBlue, we recognise that we are in this together and welcome those partnership opportunities. We invite you aboard.