Arla Milk Boycotts: The Controversy Behind Bovaer.

Arla Foods has asserted that the Boevar cattle food supplement will not enter the human food supply, despite claims from conspiracy theorists targeting the farmer-owned cooperative.

A recent initiative to incorporate a methane-reducing additive into cattle feed has led online consumers to threaten a boycott of three prominent supermarket chains.

Arla Foods revealed the trial of this supplement last Tuesday, aiming to mitigate the emissions generated by cows within their production processes.

The feed additive, referred to as Bovaer, will be tested on 30 farms across the United Kingdom, as announced by the company in a post on X last week, which has garnered nearly six million views. Arla describes this initiative as a significant opportunity to lower emissions on farms.

As the largest farmer-owned dairy cooperative in the UK, Arla is collaborating with Aldi, Morrisons, and Tesco for this trial.

The announcement has garnered 13,000 responses on X, prompting numerous individuals to dispose of milk in toilets and discard tubs of Lurpak, asserting that Bovaer is harmful and poses risks to cows, farmers, and consumers alike.

Why is Bovaer being tested and what is it?

Arla has indicated that the use of Bovaer could lead to a reduction in methane emissions from cattle by as much as 27 percent.

A report published by the UK government in 2022 identified the reduction of methane emissions as one of the most rapid and cost-effective strategies to limit the increase in global temperatures to 1.5°C. Methane is responsible for roughly 13 percent of the net greenhouse gas emissions in the UK.

In 2021, the most recent year for which data is publicly accessible, agriculture was responsible for 49 percent of methane emissions in the UK, as reported by the Department for Environment, Food & Rural Affairs (Defra).

The manufacturer of the supplement, DSM-Firmenich, explains that Bovaer inhibits the enzyme in the cow’s rumen that facilitates the conversion of hydrogen and carbon dioxide into methane. Consequently, this results in a lower release of methane into the atmosphere by the cow.

The company's website asserts that Bovaer has been "proven safe for animal, farmer, and consumer." In addressing online criticism in the UK, the firm cites 150 trials conducted globally and 85 articles published in peer-reviewed journals that support its effectiveness.

What has caused the backlash?

Arla's online statement incited significant outrage, especially among climate change skeptics and conspiracy enthusiasts, as the product was inaccurately associated with software magnate Bill Gates.

A comment on the post on X, which received over 14,000 likes, stated: “You are f****** insane if you think adding toxic chemicals to cows food that could cause harm to the farmers and the cows will help alter the climate of the planet I will be avoiding ALL of your products.”

“Cows have been farting since cows existed, and the climate has always changed,” one consumer wrote.

Another stated that the company is making a “huge mistake”, adding: “Once word gets around people will avoid your products. We do not want that poison in our food. Change your plans or go bankrupt.”

A fourth wrote: “I used to regularly buy your products (mostly protein shakes and yoghurts), but won’t be any longer until you stop using Bovaer. I will also be boycotting Tesco, Morrisons and Aldi while they continue to play a part in this. Anyone with me?”

Calls for boycotts against Tesco, Morrisons, and Aldi have garnered considerable attention, with many individuals also utilizing TikTok to encourage participation in the boycott. Viral videos circulating online depict individuals disposing of milk in toilets and sinks as a protest against consuming products produced by Arla.

DSM Firmenich was compelled to clarify that Bill Gates, who has been the focus of various conspiracy theories, has no association with the company. The firm stated, “Bill Gates is not involved in the development of Bovaer.”

Is Bovaer Safe?

DSM-Firmenich has announced that the UK Food Standards Agency has granted approval for the use of Boevar, citing "evidence that it does not harm the animals or negatively impact their health, productivity, or the quality of milk." The agency concluded that the product is safe for both animals and humans, and it effectively reduces methane emissions.

When used as directed, Boevar is "fully metabolized" by the cow, ensuring that it is "not present in milk or meat, thus eliminating any consumer exposure."

The company further states that there are no health risks associated with the substance, and it does not affect milk production or reproductive capabilities.

Arla Foods reaffirmed these assertions in a statement released to address the criticism. The statement further included: ”Alongside the 2,000 farmers across the UK who own Arla, we work hard to produce healthy & quality food every day. We work to ensure that this is done safely, whilst also working to reduce our impact on the environment.”

The chair of the National Farmers’ Union Dairy Board, Paul Tompkins, expressed that uncertainties persist regarding the "long-term efficacy" of Boevar and its effective application on farms. “This latest trial, on a product which has already been approved by the Food Standards Agency as safe for consumers, could help provide some of this evidence,” he added.

The rollout of Bovaer has sparked significant controversy, raising questions about its long-term implications for animal welfare, environmental efficacy, and consumer safety. Despite assurances from Arla Foods and DSM-Firmenich, skepticism remains, fueled by concerns over the additive’s potential effects on cows and distrust of corporate motivations.

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Public backlash, including boycotts and misinformation campaigns, underscores the challenges of gaining widespread acceptance for such initiatives. While the goal of reducing methane emissions is commendable, the controversy highlights the need for greater transparency, comprehensive long-term studies, and open dialogue to address public concerns and ensure that sustainability efforts are genuinely beneficial and inclusive.

Inside Leonardo DiCaprio's Lavish Hollywood Hills Compound: A Multi-Million-Dollar Transformation!

Leonardo DiCaprio's luxurious compound in the Hollywood Hills has recently undergone significant enhancements. The acclaimed actor, known for his role in Titanic, possesses four properties in this prestigious area. At last, DiCaprio has a residence that aligns with his commitment to environmental sustainability.

Aerial View by Google Maps.Leo's home has been renovated to be eco-friendly

The 50-year-old actor and renowned environmental advocate has been renovating his Hollywood Hills estate over the past few years, and the updates now appear to be finalized. This 4,500-square-foot residence, perched atop a hill, offers breathtaking views and now reflects DiCaprio's eco-conscious values, as evidenced by new aerial images of the property. The exterior of the home is adorned with a variety of cactus plants, which are favored by environmentalists for their minimal water requirements.

Additionally, the landscape features other drought-resistant flora, a modest lawn, and a roof equipped with eco-friendly solar panels. This opulent residence includes five bedrooms, eight and a half bathrooms, and a personal spa retreat integrated into the hillside. The spa features a sunken hot tub within the pool, a private sauna designed for one, and inviting cedarwood seating.

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Leo possesses an expansive telescope situated at the end of his pool, allowing him to enjoy breathtaking views of the city and its surrounding landscape. Additionally, there is a substantial fire pit featuring sunken built-in seating, complemented by sun loungers, umbrellas, and an opulent customized king-sized day bed.

Among the notable features of the property is a spacious room located beneath the main level, which offers a picturesque view of the hills, as well as a combined personal basketball and tennis court. Leo acquired this residence in the 1990s from Madonna for $2.5 million.

LOS ANGELES - JAN 4: Leonardo DiCaprio, Lily Gladstone at the 2024 Palm Springs International Film Festival Gala

The estate consists of two adjacent properties, the second of which he purchased in 1994 for a total of $4 million, as reported by Realtor.com. Over the years, he has acquired multiple properties on the same hill, resulting in a vast compound. In 2003, he acquired a four-bedroom, six-bathroom residence for an undisclosed sum. In 2018, he purchased the neighboring four-bedroom, four-bathroom mansion for $4,850,000. In December 2022, Leo expanded his holdings by acquiring a $10.5 million, 3,500 square-foot home featuring four bedrooms and four bathrooms, located on the northern edge of his compound.

Currently, Leo's estate encompasses over five acres, with a total of 15 bedrooms and 15,000 square feet of living space. Recently, the actor marked his 50th birthday with an extravagant, star-studded celebration at a private residence in Los Angeles.

Brad Pitt & Leonardo DiCaprio

The evening served as a gathering of cinematic icons, featuring director Steven Spielberg and his spouse, Kate Capshaw, among the attendees. The guest list also included notable figures such as Robert De Niro, Brad Pitt, Edward Norton, and Tobey Maguire, who is a close friend of Leonardo DiCaprio.

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A memorable moment of the evening occurred when the legendary musician Stevie Wonder performed a heartfelt version of "Happy Birthday" for Leonardo, evoking a strong emotional response from the actor. As the festivities progressed, the presence of stars continued to impress, with arrivals including Anderson Paak, Dr. Dre, Jamie Foxx, Paris Hilton, Katy Perry, Orlando Bloom, Mark Ruffalo, and Robin Thicke.

Leonardo's father, George DiCaprio, was present with his wife, Peggy, while his mother, Irmelin, attended alongside her husband, David Ward.

Prince William to Attend COP30 Climate Conference in Brazil: A Royal Commitment to Global Environmental Change

As the world anticipates the COP30 climate summit in Brazil next year, an important guest will be joining the ranks of global leaders and climate advocates: Prince William. Known for his passionate commitment to environmental causes, Prince William’s decision to attend the summit in Brazil signifies an important step in his advocacy for urgent climate action. His presence is expected to spotlight the importance of a united global response to environmental issues and underscore the British monarchy’s role in promoting sustainability.

At Finance Monthly, we take a closer look at what this attendance means in terms of international climate policy, the impact of Prince William’s commitment, and how his presence can influence public engagement and political commitment to tackling climate challenges.

The Significance of COP30 in Brazil

The 30th Conference of the Parties (COP30) to the United Nations Framework Convention on Climate Change (UNFCCC) is expected to be one of the most critical climate events in recent years. Hosted in Belém, Brazil—a region emblematic of both the world’s environmental richness and its vulnerability—COP30 will bring together countries, organizations, and activists to discuss climate policies, set actionable goals, and address the urgent threats facing the global ecosystem.

Brazil, home to the Amazon rainforest, is an especially relevant location for this summit, given the ongoing challenges around deforestation, biodiversity loss, and Indigenous land rights. The Amazon plays a critical role in regulating the Earth’s climate, and the fate of its ecosystem has far-reaching implications. Holding COP30 in Brazil places a special emphasis on the responsibility of all nations to protect these precious, shared resources.

Prince William’s Environmental Commitment

Prince William has long been an outspoken advocate for environmental protection, sustainability, and conservation. Through his foundation, the Royal Foundation of The Prince and Princess of Wales, William has launched several initiatives, including the ambitious Earthshot Prize. This prestigious award encourages individuals and organizations to propose innovative solutions to environmental challenges, with a specific focus on restoring and protecting the planet.

The Earthshot Prize, named in homage to President John F. Kennedy’s “Moonshot” speech, provides financial grants to fund promising solutions across categories like biodiversity conservation, climate repair, ocean revitalization, and waste elimination. By championing this initiative, Prince William has demonstrated that he is not only a figurehead but also an active participant in finding solutions to global challenges.

His involvement with COP30 is a continuation of this dedication, bringing attention to the need for international cooperation and innovative thinking in climate policy. Prince William’s high-profile attendance will likely amplify the urgency of climate issues, making it clear that protecting the planet is a cause that transcends borders and requires a truly global effort.

Why Prince William’s Attendance Matters

Prince William’s attendance at COP30 is expected to bring several key benefits:

1. Raising Public Awareness: As a prominent member of the British royal family, Prince William’s influence is far-reaching. His participation in the summit will help raise public awareness around the world, mobilizing more individuals to take personal action against climate change and encourage their governments to implement sustainable policies.
2. Political Influence: Prince William’s presence may serve to influence policymakers, motivating them to make meaningful commitments and collaborate on international climate goals. With his backing, climate pledges could be viewed with greater legitimacy and urgency, encouraging leaders to prioritize ambitious targets.
3. Strengthening International Ties: The UK has historically been a strong advocate for climate action, and Prince William’s attendance can strengthen international relations on this front. His presence may foster greater cooperation with Brazil and other nations attending the summit, creating stronger bonds over shared environmental goals.

Prince William’s Broader Vision for Climate Action

Prince William has spoken publicly about his vision for a sustainable future, often highlighting the importance of global collaboration in addressing climate issues. He has been vocal about his desire to leave a livable planet for future generations, especially for his children. This deeply personal connection to environmental advocacy is central to his work, driving his commitment to initiatives like the Earthshot Prize.

At COP30, Prince William is likely to emphasize themes of unity, innovation, and resilience. His message will align with the larger goals of the summit, reinforcing the importance of coming together as a global community to face one of the most pressing challenges of our time.

What to Expect from Prince William at COP30

While Prince William’s specific role at COP30 has not yet been fully disclosed, he is expected to deliver a keynote address and participate in key discussions on climate policies. His speech is anticipated to focus on the importance of ambitious, actionable goals and the role of innovation in achieving a sustainable future.

Prince William may also highlight the achievements of the Earthshot Prize and discuss future opportunities for cross-border collaboration. His involvement at COP30 is likely to include meetings with world leaders, environmental advocates, and representatives from Indigenous communities, reinforcing the need for a collaborative approach to climate action.

The Prince’s agenda is also expected to include visits to local Brazilian communities and environmental projects, providing him with firsthand experience of the ecological challenges facing the region. This could allow him to gain deeper insights into Brazil’s unique climate struggles and strengthen his advocacy for more protective policies in regions critical to the global ecosystem.

The Role of the British Monarchy in Climate Advocacy

Prince William’s attendance at COP30 continues the British monarchy’s legacy of involvement in environmental conservation. His father, King Charles III, has been a vocal environmental advocate for decades, speaking out on issues like climate change, sustainable agriculture, and rainforest protection well before these topics became mainstream. King Charles’ environmental activism paved the way for Prince William to follow in his footsteps, with a renewed focus on practical solutions and global partnerships.

The British monarchy’s influence extends far beyond the UK, and by leveraging his position, Prince William can help build a bridge between leaders and communities who may otherwise struggle to connect over climate concerns. His attendance at COP30 will showcase the monarchy’s commitment to remaining relevant in a changing world, using its platform to support positive environmental change.

Prince William’s Influence on Future Generations

As a young, relatable member of the royal family, Prince William’s commitment to climate action resonates with younger generations. His approach is forward-thinking and optimistic, often focusing on practical solutions and encouraging innovation. By attending COP30, Prince William is signaling to young people worldwide that climate action is both necessary and achievable.

This involvement is likely to inspire a new generation of environmental leaders, urging them to take action on both individual and collective levels. His presence at the summit serves as a reminder that today’s decisions will shape the world for future generations, a message that aligns closely with the Earthshot Prize’s mission.

A New Chapter in Global Climate Advocacy

Prince William’s attendance at COP30 is more than a symbolic gesture—it’s a call to action. His involvement reaffirms the urgent need for global collaboration on climate policy and emphasizes the impact that prominent figures can have in mobilizing public support. With his focus on practical solutions, innovation, and sustainable development, Prince William is helping to lead a new chapter in climate advocacy that aims to bring tangible results.

By joining world leaders, environmental activists, and communities at COP30, Prince William demonstrates that climate change is a universal issue that demands everyone’s participation. His dedication to this cause will undoubtedly resonate during the summit and beyond, encouraging us all to work together toward a sustainable future.

Prince William’s commitment to attending COP30 represents a powerful statement about the importance of climate action and global cooperation. As he steps into this role, he will bring attention, inspiration, and influence to the international community’s efforts to combat climate change. At Finance Monthly, we celebrate his dedication and look forward to seeing how his participation can amplify the voices of climate advocates and inspire the world to take meaningful steps toward a healthier, more sustainable planet.

In 2019, the UK Government set a goal of Net Zero by 2050 with an additional pledge to reduce emissions by 68% compared to 1990 levels, by 2030.

However, The British Standards Institution’s Net Zero Barometer report, surveying 1,000 senior decision-makers and sustainability professionals in the UK, found that financial services are falling behind: while 61% of the IT sector have set sustainability goals, financial services sits at 42%. Banks need to understand and address this lag and fast - needing access to the right data to understand the problem and address it in multiple ways.

Pressure on Financial Services

Unsurprisingly, the financial sector has come under a lot of scrutiny from regulators and the public alike, for a perceived lack of action and its role in supporting unsustainable practices. The issues have been kept in the spotlight not just by vigilante groups like Just Stop Oil, but also by recent examples like an active shareholder revolt at HSBC, pushing them to divest from energy companies.

But it is not just activists and regulatory groups. There is significant proof in the data that consumers are seeking alternatives to the traditional banking orthodoxy. Customers of retail banks have shown strong demand for green finance products, with 45% seeking sustainable credit & debit cards, and 31% seeking green loans and mortgages.

The focus on environmental, sustainability and governance (ESG) within investing has also ramped up year after year. We’re starting to see a new phase that we call ‘banking on purpose’, connecting boards and consumers in visions for a greener future, whilst increasing prosperity for the communities they support.

ESG considerations are set to loom large over companies — this will be important to maintaining reputations at a consumer, shareholder and board level.

Integrate Green into the Offering

Promisingly, data reveals that 83% of new build houses in the UK are eligible for a green mortgage. However, £2.9 trillion of UK housing stock is currently ineligible, providing a significant opportunity for banks to serve these homeowners. Offering loans to support renovations that seek to improve the energy efficiency rating of properties can help FS institutions embed consumer-focused initiatives into their offerings, rather than having them as an afterthought.

Retail banks have started to promote sustainability and are affecting change — for example, Lloyds Banking Group’s ‘Helping Britain Prosper’ strategy directly tackles the challenges of ESG for all stakeholders, securing more sustainable returns and capital generation by honing in on housing access, inclusion, and regional development, while aiming to reduce its own carbon emissions by over 50% by 2030. Its efforts are aligning with a sustainable financing portfolio, pledging over £52 billion in investment by 2024 as part of their ESG strategy.

Change is equally underway at the consumer level with NatWest introducing its own carbon tracker feature that analyses consumer transactions and applies it to a regulated emissions calculator, calculating the carbon footprint throughout the complete process. By introducing this feature as well as suggesting ways customers can reduce their own personal impact, they hope to save 1 billion kilograms of CO2e emissions per year, the equivalent of planting 1 million trees.

To ensure banks can become sustainable whilst remaining competitive, accurate measurement of emissions is critical and must include scopes 1, 2 and 3 emissions. This is not a simple task and requires a digitally enabled, agile and modern core at the centre of the business.  If Financial Services firms want to drive meaningful impact, they will need to move from treating sustainability from the periphery to the core of their business priorities.

By putting environmentally friendly initiatives at the heart of their business strategies, the banking industry can fulfil the needs of their customers and ensure we all play our part in building a more sustainable future. This is certainly a positive start to the UK’s mission of reducing its greenhouse gas emissions by 2050, we still expect to see this industry ramp up its efforts as we get closer and closer to the point of no return.

With institutional investors banding together to promote investment in sustainable companies, regulators on the verge of demanding auditable numbers from firms to prove that they are meeting their often public commitments on reducing environmental impact, and consumers increasingly intolerant of anything that smells like greenwashing, the best time to start working on your environmental, social, and governance (ESG) strategy and reporting capabilities was yesterday.

Since yesterday isn’t an option, you had better start now. The general consensus we hear among our contacts in the regulatory world and the 150 clients in our account-to-report advisory programme is that ESG reports in the foreseeable future will face the same level of scrutiny that financial reports have always received – with similarly swift and onerous consequences for weak results, obfuscations, and mischaracterisations.

Within two to five years, we expect major companies in many jurisdictions will be required to file ESG reports that include auditable numbers. European regulators are leading the way on this, but the SEC is close behind. They will likely begin with reporting requirements that are built on the Task Force on Climate-Related Financial Disclosures (TCFD) which recommends 11 disclosures across governance, strategy, risk management and metrics. The initial focus is on climate change but this will likely expand in scope to include other environmental concerns such as biodiversity, as well as wider social themes such as inclusion, diversity and equality.

Finance to the rescue

This combination of regulatory and institutional investor scrutiny is part of why the logical clearinghouse for ESG data in most companies – when they recognise the need to operationalise this – won’t be a sustainability task force or procurement office, but the same people who have always provided regulators and investors with the numbers they need: the finance function. 

One reason why there has been a degree of wait and see and perhaps some apprehension is that it is still a little bit early to consider what the operational steady state of this process will look like. ESG reporting standards are still going through consultation phases and the final interpretation of these into detailed accounting is going to take time to fully evolve. But one thing is for sure… it is definitely coming.

The messaging we are hearing is these sustainability standards will take shape faster than traditional accounting standards. The new standards are built on some pretty strong foundations, as there has been a large investment over many years by bodies like the Sustainability Accounting Standards Board (SASB), Climate Disclosure Standards Board, Global Reporting Initiative (GRI) and the GHG Protocol, so the thinking is already very well evolved and thus it is easier to have a good idea of what we are likely to see in the years ahead. 

Chief financial officers (CFOs) will need to play a role wider than just the custodian of the delivery of disclosures but also will need to help coordinate the integration of environmental concerns into the larger business strategy. This will include a reboot of enterprise risk management, strategic planning, and investment appraisal.  Perhaps, most importantly, it will be necessary to redefine the performance management processes to reset incentives to guide management behaviour toward ESG priorities. A further area requiring the attention of finance is the need to address additional accounting. As we enter a transitional phase, companies are needing to manage their carbon footprint via the purchase of energy attribute certificates and may also invest in carbon offsets, and engage in emissions trading activity. It is also likely that there will be additional taxes and regulatory reporting requirements at the country level.

Finally, it is worth underscoring that transparency, honesty and integrity are going to be incredibly important. Companies that appear to not be acting in good faith will likely see an impact on shareholder value. If a lack of rigour and diligence in the accounting is discovered, the punishment is likely to cause a severe dent in shareholder value and also have reputational impacts that will be difficult to recover from. 

The first three steps

Although most major companies at this point have made ESG-related resolutions, few have been clear about how they are going to make good on those promises. Fewer still are clear about how to report on their progress. At a minimum, you need to do three things: 

1. Implement the recommendations of the TCFD. The TCFD framework is built on four pillars - governance, strategy, climate risk management, and metrics and targets. It provides specific guidance via 11 disclosure recommendations. At a minimum, your organisation should seek to ensure that each of these is being adhered to.

2. Be aware of developments that will affect your carbon accounting. If you follow US GAAP, you should monitor what the SEC and Financial Accounting Standards Board are saying. If you observe International Financial Reporting Standards, you should look at your country’s regulatory position and the position taken by the European Union and in particular the European Financial Reporting Advisory Group’s work on the refreshed Climate Sustainability Reporting Directive. On top of that, you will also want to review the ISSB draft standards and monitor their progress through consultation phases, become familiar with the GHG Protocol corporate accounting and reporting standards, and drill into the work completed by standards bodies like the GRI and SASB. 

3. Remind your colleagues that you will need to walk the talk. If you made a public sustainability promise, such as going carbon neutral by 2030, be sure you have an actionable plan to pursue it. You will need to have a detailed road map with achievable milestones that can support those earlier promises – and, most importantly, you will have to hit those milestones.

About the author: Stephen P. Ferguson is the leader of The Hackett Group’s Account-to-Report Advisory Programme in Europe – an advisory service that includes members from 150 major companies.

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Among other social issues, climate change awareness has increased significantly in circles of investors, and institutions are taking notice. Indeed, the extent to which a company is recognised for its environmental, social and corporate governance (ESG) has emerged in recent years as a key criterion for investment, and this is clearly more than a fleeting trend. Today, sustainable investing, also known as ESG investing, is a significant market force. 

As a result, institutions have begun implementing ESG goals in their portfolios. While these goals have rendered previously profitable investment sectors no-go zones (tobacco, fossil fuels), new sectors are emerging as potentially lucrative hotspots.

One of these sectors is the supply chain. Massive investment in supply chain visibility has increased efficiency. A side-effect of this investment has been greater control over emissions. Coupled with reduced waste and the potential for greater emission controls, investors stand to gain significantly.

Here's how supply chain visibility can help you achieve your ESG and broader portfolio goals.

A better understanding of Scope 2 and 3 emissions

The supply chain world is a complex one, with multiple entities interacting to produce results. This web of interdependencies makes tracking emissions a tough task. For instance, a manufacturer might use sustainable raw materials and environmentally-friendly production techniques. Yet, if its logistics partners rely on unsustainable sources of energy, the manufacturer's ESG efforts are moot.

Traditional reporting has targeted Scope 1 or direct emissions. These days, ESG guidelines prescribe measuring Scope 2 and 3 emissions created by indirect consumption. For instance, emissions generated through the purchase of utilities such as electricity and water fall under Scope 2. Emissions generated in a company's value chain (such as last-mile emissions) are considered part of Scope 3.

Data visibility in the supply chain is a function of interconnected systems. A logistics company's technical infrastructure integrates with a manufacturer's, allowing everyone access to shipment information relating to locations and conditions. As a result, manufacturers can measure delivery time and track emissions generated per delivery.

Insight into these datasets gives stakeholders a chance to plug ESG leaks. For instance, how well are vendors performing? Are they adhering to ESG guidelines or greenwashing performance? Data allows stakeholders to educate their partners and prioritise ESG goals while maintaining margins, thereby increasing their firm’s attractiveness to investors.

Revisiting product recyclability concepts

Sustainable consumption is becoming an important value among shoppers. As fast fashion companies are increasingly discovering, consumers are not afraid of voting with their wallets. The food and healthcare sectors have felt this impact as well, as moves towards local produce and vegan lifestyles attest.

Manufacturers can leverage supply chain data to understand consumer needs and design reusable products. Data relating to product returns, purchase frequencies, and product damages provide stakeholders with key information regarding product life cycles.

In the past, manufacturers maximised profits by creating fragile products that would inevitably need replacing within a few years. However, as consumer behaviour changes, this manufacturing trend will likely be replaced by a move towards longer-lasting goods. 

Multiple supply chain datasets generated via condition monitoring, inventory, manufacturing line IoT instruments, and customer returns help manufacturers understand their products' life cycles so they can curb waste. Greater visibility also gives manufacturers insight into the impact green materials have on their sales.

By developing interconnected systems, manufacturers can correlate the use of sustainable materials with retail sales and returns. Powerful analytics platforms can detect changes in consumer preferences as they occur, helping manufacturers redesign their processes as needed.

Supply chain visibility data can also be passed on to consumers, offering them ESG validation. For instance, medical packaging in the EU comes with a QR code that gives customer information on product sources and ingredients. Similar moves in retail and food are underway, giving companies the ability to use ESG as an edge in the markets.

Better routes for freight and last miles

Delivery route design is an intricate process, with logistics companies balancing several variables. For instance, vehicle capacity, technology, weather, geopolitical conditions, and infrastructure en route are a few variables that need balancing. They’re also under tremendous market pressure to deliver products on time and in optimal condition.

It's easy to believe that ESG will take a backseat, given these variables. However, supply chain visibility data naturally boosts ESG by reducing waste in the delivery chain. For instance, optimal route design automatically reduces waste caused by improper storage and good handling. 

Automated alerts generated by IoT devices attached to shipments prevent goods from falling out of ideal conditions while in transit. These datasets also reveal the state of infrastructure along delivery routes, allowing companies easy route evaluation.

Given the sophisticated nature of these models, adding a layer of ESG-related goals is relatively straightforward. For instance, designing routes with fewer emissions while balancing other variables is simple thanks to advanced technology such as smart contracts and AI.

Sophisticated route modelling techniques also allow stakeholders to model deliveries before executing them. Thus, emissions and related ESG data can be projected in the scenario planning phase. Any deviations from these expected levels can be examined and addressed to create even more efficient systems.

Better visibility, more sustainability

Visibility data is giving supply chain stakeholders the chance to create efficient processes. A direct result of these efforts is better net margins thanks to reduced costs and waste. Investors stand to gain significantly from these advances while meeting their portfolios' ESG goals.

Between 2020 and 2018, the field of socially responsible investment grew to a valuation of 17.1 trillion USD. Companies that align with ethical investment now hold 33% of assets managed in the United States, too, and that number is poised to grow in the near future. 

What is ethical investing?

Ethical investments support businesses responsible for positive social or environmental change. Instead of investing in corporations with horrible discrimination policies and histories, many consumers instead search for companies that promote employees regardless of gender, race, or disabled status. Understanding ethical stocks & shares investing is an increasingly important tool for modern traders interested in building socially responsible portfolios. Luckily, trusted authorities in the world of financial brokers and investments, AskTraders, have put together a guide to make finding smart investments a bit easier.

What can consumers who are interested in socially responsible and ethical investing look for when considering new investments? From workers’ rights to environmentally conscious companies and more, here are some business activities and issues to keep in mind. 

Environmentally conscious companies and stocks

Discussion about the environment and the many ways humans can negatively affect it is increasing as temperatures rise worldwide. The search for environmentally friendly businesses and businesses dedicated to actively improving the environment is on the rise. Many potential investors are on the lookout for stocks that seem to represent decisive action on the issue of environmental health.

If this issue is important to you, you should look out for businesses taking action, not simply those paying lip service to the idea. A corporation that extolls the virtues of green energy while sending massive carbon emissions into the environment daily, in other words, is probably not the best investment you could make. Look at future goals and steps that have been taken in the past to advance the good of the environment. 

Animal welfare

The idea of “cruelty-free” products has been an increasingly important one for decades. The concept has become an important one in the broader financial industry, even outside of industries that might be traditionally tied to things such as animal testing. More and more consumers want to know if the creation or use of a product involves harming an animal and if the people running companies support animal welfare. 

From cruelty-free stocks to stocks that emphasise vegan products, there are many businesses espousing animal rights around the world. And while they might not be the most profitable, investors interested in ethical trades should keep this issue at the forefront of their minds. 

Equality

Social justice continues to be an important aspect of today’s society. What do the companies you are considering investing in say about equal hiring and employment practices? Do their actions match those claims? Consider equal opportunity records and policies before investment. Be diligent with research, too, and keep in mind that equality refers to gender equality as well as racial equality and even disabled worker equality. There are many ways companies can show support for diverse populations (or ways in which they can ignore them). 

Workers’ rights

Another crucial ethical investment consideration is how companies handle workers’ rights demands. Some businesses are actively on the lookout for issues impacting their employees’ health and productivity, especially as the world grapples with the COVID-19 pandemic. Others, however, are less concerned. From employing children to firing ill or disabled employees and much more, the issue of workers’ rights is an ever-evolving one. 

Finding the perfect ethical investments

What issues are important to you? Finding the perfect ethical investments begins with investors who know what matters to them. List some of the issues most important to you, be it something listed above or an entirely new issue. Now look for businesses that align with those topics. Do your research before investing, and do not be swayed by polished websites with no substance. You are looking for action, not simply well-written declarations. 

Are you ready to get started with ethical investing? Keep the information above in mind, and do not be afraid to reach out to professionals for help. Remember that investing is not a race, no matter how exciting the initial rush might be, and sometimes sleeping on a decision is the best way to move forward. 

Why ICT operations must be at the forefront of climate change improvement

Compared to fast fashion, fishing with nets, or drilling for oil, the use of ICT and its relationship to carbon emissions is not a well-trodden narrative. However, ICT is expected to soak up 21% of electrical consumption by 2030, with the sector demanding between 5-9% of electrical use worldwide, equating to 3.5% of emissions globally. With internet use increasing by as much as 78% in the last year, mainly due to the pandemic, and a global trend of technological reliance, the environmental effect needs to be understood and efforts should be made to reduce the impact. 

Because ICT has driven innovation that has such a positive impact on personal, social and business operations globally, its utility has often overshadowed the detriment it may have on the environment. However, just like other sectors battling to improve their carbon footprint, there are methods, practices and, indeed, technological changes that can greatly offset ICT’s carbon emissions. 

Storage use and the need to migrate

Legacy systems for businesses such as banks have long relied on domestically owned, stored and operated hardware to facilitate their business operations. Naturally, with these systems in place, their implementation follows a long-standing and often out-of-date methodology that is ill-equipped to adopt new, environmentally friendlier technologies as they arise. Similarly, these systems fall short of optimisation and scaling opportunities when compared to newer advancements, since the legacy hardware operates at a maximum capacity. This means that the energy requirements of the legacy hardware cannot be reduced in line with business needs or market fluctuations, and the opportunity to save energy is lost.

To counter the environmental impact of these legacy systems (and see increases in operational efficiency, effectiveness, scaling and faster time-to-market), those still using physical, on-site hardware need to explore the possibilities provided by cloud storage technologies.

In recent research we conducted on cloud technology and banking institutions, we found that 81% of respondents had adopted cloud technologies to save costs, while 95% cited the increased time-to-market of cloud and 86% said the key benefit was the virtually unlimited scaling opportunity. This trend is complemented across businesses more generally, with 50% of businesses using the cloud to store company data in 2021, an increase of 20% when compared to 2015. 

Migrating from physical storage to a flexible cloud infrastructure also reduces the need to add additional systems as time goes by, thereby promoting a strategy for the long-term improvement of sustainability practices. Google is a great example of a cloud provider that has invested huge sums into making its operations sustainable and has used carbon offsetting to compensate for all of the carbon it has ever created. By 2030 their goal is to run all its servers using 100% carbon-free energy, meaning their customers can tap into Google’s green credentials to support their own sustainability journey. 

Appropriate technical architecture

Excess code is an underestimated but invasive principle of business technology. Often, the technical make-up of websites, machinery or ICT software has unnecessary code that lengthens the processing time and data transmission of an operation. With longer processing times comes more power usage, hindering business efficiency and cost-saving opportunities. 

With an increased focus on inefficient coding and its effect on ICT’s environmental impact, the concept of ‘green coding’ is gaining increased traction. Green coding concentrates on coding efficiency and aims to provide systems and guidelines to ensure a business’ ICT architecture is as efficient as possible, with the ambition being to lower power usage, processing time, and therefore overall energy consumption. The outlook for ICT needs to change – processes should be updated to use the absolute minimum energy required to fulfil their function, before shutting down until required again.

Every small gain that can be achieved in reducing processing energy, will ultimately support a large reduction in carbon footprint.

Energy proportionality

Most IT systems within banks and many other organisations have historically lacked the ability to efficiently manage their energy consumption, or have the ability to react to market fluctuations. The energy used by core ICT systems is therefore often ‘fixed’ and not proportionate to the utilisation of those systems. The concept is known as ‘energy proportionality’, whereby utilisation levels can be measured as a percentage of utilised computing power. While high utilisation is the objective, low utilisation is still the norm and is usually a result of an overestimation of how much software and therefore server capacity is required or will be used. Energy proportionality can also be exacerbated when there are multiple software and ICT operations taking place, or where replicated data centres or resiliency is felt to be required.

 Adopting a combination of cloud technology and green coding can reduce the disparity of projected and actual utilisation. While green coding ensures that the delivery of software applications is as efficient as possible, cloud technology is capable of providing real-time changes to storage and processing capabilities as markets, traffic or software usage changes. This approach has huge benefits for cost-cutting, as migrating to cloud systems usually means you can also adopt a ‘pay-as-you-go’ cost structure for your data processing and storage requirements. Having automated power output based on actual energy expenditure is capable of eradicating overestimations for energy use, thereby saving energy consumption and promoting high utilisation as a result.

Streamlining operations for the future

Advancements in storage technology utilising the cloud, allows many businesses to tap into the efficient, low-energy consuming infrastructure, streamlining their operations and achieving maximum efficiency. Not only will this help firms lower their carbon emissions output by reducing unnecessary power usage, but can also allow them to improve the effectiveness of their systems and processes to save time and costs whilst supporting scaling opportunities and reducing time-to-market. 

Combined with the growing knowledge of green coding principles, the cloud can be used in conjunction with precise technical architecture to provide firms with improved efficiency for their business in both an operational and environmental sense.

All of those within the ICT sector have a responsibility to streamline their emissions output and using these technologies and disciplines is a clear-cut method to fulfil this ambition. 

About the author: Dean Clark is Chief Technology Officer at GFT.

The World Economic Forum reports that a significant group of countries has pledged to by 2030, “end poverty, protect the planet and ensure that all people enjoy peace and prosperity.” That sounds like a tall order and admittedly, you have to be a bit of an optimist to imagine that those goals will be reached by that fast-approaching date. But even the more pessimistic (or ‘realist’ if you prefer) of those among us shouldn't throw in the towel. Some huge opportunities on the horizon have more than a little potential to significantly push the planet towards greater eco-sustainability, while at the same time providing more than enough profit for companies and investors – profits, which hopefully will then be further invested into developing ever more ideas and tech to create a virtuous cycle. Investments in biomanufacturing are building upon established bioscience, and startups are pushing all sorts of new low carbon solutions that are often proving to be both viable and cost-effective. These include sustainable manufacturing processes in biochemicals and fuels, biopharmaceuticals, and of course, foods.

The largest sector that may turn out to be a literal cash cow could be all things vegan. The vegan food world is turbocharging. People used to roll their eyes when a product would be described as “vegan meat,” but that's not the case anymore as even top celebrity chefs are reporting that new high-tech iterations of so-called ‘alternative meat’ – some of which is printed with a 3D printer – are game-changers that have so closely imitated the textures and tastes of meat that some may not be able to tell the difference. If a vegan kebab looks, tastes, smells, and even cooks like an ordinary kebab… is it not a kebab? The answer for most people appears to be yes. The list of companies rolling out ‘vegan’ editions of their products grows by the day. Tesla, Polestar, BMW, and Ford, for example, are just a few of numerous carmakers offering ‘vegan’ options. Porsche has a 100% vegan interior option for one model, and the floor of the vehicle is made from recycled fishing nets. Nearly half of the plastic found floating around our oceans is old fishing nets, so the idea is almost a perfect definition of win-win. Porsche also says that the new vegan interior produces 80% less CO2 than a leather version. Aside from luxury cars, there are big developments in vegan lifestyle products such as luxury handbags. Hermès now has a faux leather handbag made out of a type of fungus, while Nike is using ‘pineapple leather’ that's 100% sustainable and provides Filipino pineapple farmers with additional sources of revenue. Vegan, biofriendly, chemical-free cosmetics are also racing forward and promise to become sources of major revenue for both old and new manufacturers.

Many nations around the world are investing heavily in the journey to ‘net zero.’ China, long an example of some of the worst practices in polluting manufacturing, is fast on its way to becoming a leader in the new sustainable economy. Expect some incredible breakthroughs from China over the next five years in energy production and carbon capture as the Middle Kingdom has put in the work and looks set to soon reap the benefits. And yes, it must be acknowledged that it's easier to enact changes in a non-democratic one-party state, but China is at least moving in the right direction. The other big area to look out for is not a new idea and goes back to the idea of microfinancing and credit unions or community development banks with specific missions of serving lower or middle-income communities, and helping lift them out of poverty or the so-called ‘middle-income trap.’ Charging a tiny amount of interest on tiny loans might not sound like a money maker but when scaled, for example, India and China together having perhaps close to a billion people who might sign up – the numbers add up. 

According to the 2020 Report on US Sustainable and Impact Investing Trends, by the Forum for Sustainable and Responsible Investment or US-SIF, “as of year-end 2019, one out of every three dollars under professional management in the United States—$17.1 trillion—was managed according to sustainable investing strategies.” That's impressive but still has much room for growth. As the US-SIF also notes, “A number of studies have found that investors do not have to pay more to align their investments with their values, or to avoid companies with poor environmental, social or governance practices.” Whether jumping on the vegan trend, investing in biotech or putting money into sustainable investment funds, there is capital to be made from making the world a better place, as cliché as that term may be. There's no reason why your dollars can't make you more dollars while also aiding in sustainability and eco goals. 

Following the close of COP26, sustainability is at the forefront of everyone’s minds. The conference highlighted the need for organisations to drive greater investment, focus and action to make the world a more sustainable place to live.

Microsoft: Accelerating The Journey To Net-Zero

Ahead of the conference, Microsoft published an academic study in partnership with Dr Chris Brauer, Goldsmiths, University of London, that painted a picture of the UK’s current sustainability climate and a blueprint to accelerate action. Its findings offered a stark warning – despite strong sustainability commitments and ambitions – only 41% of UK organisations are set to hit the government’s 2050 net-zero target, currently. 

Why Are UK Businesses Struggling With Sustainability?

In benchmarking UK organisations’ progress on sustainability, the findings illustrated that UK leaders are struggling to turn sustainability commitments into tangible action and the financial services industry is no exception. When looking specifically at sector data, the team of academics found that currently, only 16% of financial institutions surveyed will be net-zero by 2050 – a number far below the national average of 41%. Although every organisation must play their part in reducing global warming, the UK’s financial institutions are in a unique position to drive change, not just for themselves, but for the entire UK economy. The financial services sector has the power to lead by example and by reducing their exposure to high carbon sectors, using tools to measure the impact of investments on the planet, they can encourage sustainable growth and investment across the nation. Before diving into how financial institutions can turn their commitments into action, it’s important to understand where exactly they’re struggling. 

For the majority, financial organisations are failing to set out policies that enact their sustainability strategies, for example, our research found that only 29% of UK financial organisations currently apply environmental standards in their supply chain. Second to that was a lack of in-house skills and expertise in sustainable practises, followed by a struggle to shift their corporate thinking towards more sustainable business operations. Many also found it difficult to identify the right technology to help, while calculating costs was another problem area. 

A Blueprint To Achieve Net-Zero

Despite the struggle to create a clear path to a greener future, the appetite for improvement is there, the UK’s financial institutions are willing to change, they just need help to get there. This is in part thanks to growing pressures from regulators, customers and even employees to become more sustainable. 

To support the sector in accelerating its journey to net-zero, we worked with academics led by Dr Chris Brauer, Goldsmiths, University of London, to create a series of short and long-term steps – a blueprint – that financial organisations can follow to help achieve net-zero; these steps not only explain how financial institutions can improve their own sustainability performance but how they can play a part in building the wider net-zero economy. 

The blueprint includes steps such as integrating the negative impact of climate change into extended risk assessments across the whole organisation to boost financing for investment in net-zero measures. Organisations should also include an environmental sustainability disclosure in all corporate reporting and accounting metrics. The financial service sector can also explore linking executive pay to progress on climate issues as an incentive for sustainable development. They should also work to improve access to finance for green investment by helping the Government establish robust, long-term policy frameworks and removing market barriers. Other measures laid out in the blueprint include accounting for natural capital, investing in sustainable infrastructures such as energy systems, water and transport networks and supporting greater supply chain resilience through innovative financial instruments and new, green investment portfolios. 

Finally, the blueprint calls for increased investment in technological innovation by switching to less energy-intensive digital infrastructure and harnessing more sophisticated, environmentally friendly solutions, such as machine learning, digital twin, and cloud-based technologies. 

The above may look like a lot of work, but it’s an investment that won’t fall short to pay its worth back, both for the planet and for the organisation. What’s more, potential employees – particularly the younger workforce – are increasingly demanding employers place sustainability and ethics higher up the corporate agenda. Our research found that only 22% of financial services employees believe their work premises are as friendly as their own home, and over half of them also said the strength of a firms’ sustainability plan would impact where they chose to work.

Organisations already reaping the benefits of following more sustainable practices include NatWest, which, together with Microsoft, are helping UK businesses better understand their carbon footprint through innovative measurement tools and tailored action plans to reduce their carbon emissions. This approach allows NatWest to reduce their own carbon footprint by helping their customers, a prime example of the ripple effect that financial services institutions can have on the UK economy by placing sustainability high on their priority list. 

Final Thoughts

Ultimately, we all need to work together to solve the climate crisis and financial institutions must play their part in helping create a better, cleaner world for everyone. Whether that be implementing new data measurement tools to help customers and the organisation itself track sustainability progress, or helping identify new ways for customers to discover green investment opportunities, each step will help a business do their bit to improve the planet, while they reap the rewards in terms of reputation, talent acquisition and more.

As the world watched on, global leaders, scientists and academics convened at the COP26 Summit in Glasgow just weeks ago, as Prime Minister Boris Johnson warned that the “doomsday clock is still ticking” in the effort against climate change. While this enormous undertaking has truly only just begun, traders and investors have no doubt been pricing new commitments into their portfolio management strategies.

All things considered, the path to a greener future is paved with investment opportunities, but this has not necessarily translated immediately to the stock market. Although the first day of trading on the London Stock Exchange following the summit saw some global mining giants take a hit, the FTSE 100 still managed to close the day out up 3.95 points, or 0.05%, at 7351.86. Typically, the markets struggle to account for any long-term view, and this remains the case post-COP26. This is especially the case considering that world leaders have mostly been speaking in terms of “phasing down”, rather than “phasing out” coal. 

For this reason, it is not exactly surprising that research* commissioned on behalf of HYCM has shown that only 45% of investors consider sustainable investing to be important to them. Without concrete and robust action to tackle climate change, it is perhaps even less surprising that caution still prevails among investors, with just 19% considering ESG investment to be a savvy investment strategy at present. 

So, what exactly is driving this mindset, and what should investors be watching as we transition to a zero-carbon economy?

‘Too much hype’ around ESG?

One potential answer to this question could be that concerns surrounding ‘greenwashing’ are deterring traders and investors from upping their investment in ESG assets. According to that same HYCM survey*, more than a third (38%) said that there is “too much hype” surrounding ESG investing at present. 

The question, then, is whether these trepidations are substantiated. The answer is yes and no; while investors are quite right to be sceptical of companies hopping on the green bandwagon with re-branding and lofty environmental claims, they should make themselves aware of genuinely green initiatives.

In the months and years to come, there will be many opportunities for traders and investors in the race to net-zero across many areas. From a growth perspective, in the capital goods area, there is a huge amount of potential in the supply chain for climate solutions. Likewise, the technology field will be a crucial enabler for climate solutions in the long-term, so investors should monitor these opportunities closely. 

At the moment, just one third (33%) of the investors surveyed* by HYCM plan to invest (or increase their investment) in green energy such as wind power, water stocks and solar energy in the next 12 months. That said, we can expect these figures to grow in line with changing environmental policy, such as a global carbon tax which would shock the stock market in the future. Green metals, such as copper, aluminium, nickel and lithium could also see gains over the medium term as their demand is expected to increase. Likewise, it is also important to note the fact that alternatives to traditional energy, such as oil, are already proving popular with traders and investors – right now, oil is one of the top traded commodities at HYCM.

Young investors will lead the charge

Another trend to be aware of is the fact that younger investors appear to be at the forefront of the shift towards net-zero. Compared with the smaller number (45%) of investors who said that sustainable investing was important to them, comparatively, the majority (60%) of younger investors aged 18-34 said that these investments were a priority, indicating a more values-driven approach towards investment.

When compared with other bodies of research, these figures stand up; research from MSCI has also shown that millennials have spurred the growth of sustainable investing throughout the 2010s – specifically, investors contributed $51.1 billion in sustainable funds in 2020, compared to the figure five years ago, which came in at $5 billion.

Traders and investors should expect these trends to stick, and this sunnier outlook will no doubt feed into the corporate mentality, as industry titans like Microsoft and Nike will be keen to establish their ESG credentials. All told, although COP26 may have failed to have an immediate impact on the stock market, the summit has likely set the tone for change over the medium to long-term, and traders and investors should ensure that they are kept in the loop with any policy changes and developments in this area.

HYCM recognises this trend and offers traders exposure to the renewable space through commodities and ESG stocks such as Tesla, and copper, which is expected to be more in demand as we build a greener future.

High Risk Investment Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information, please refer to HYCM’s Risk Disclosure.  

About the author: Giles Coghlan is Chief Currency Analyst, HYCM – an online provider of forex and Contracts for Difference (CFDs) trading services for both retail and institutional traders. HYCM is regulated by the internationally recognized financial regulator FCA. HYCM is backed by the Henyep Capital Markets Group established in 1977 with investments in property, financial services, charity, and education. The Group via its relevant subsidiaries have representations in Hong Kong, the United Kingdom, Dubai, and Cyprus. 

*About the research: The market research was carried out between 5th and 10th November 2021 among 2,000 UK adults via an online survey by independent market research agency Opinium. Opinium is a member of the Market Research Society (MRS) Company Partner Service, whose code of conduct and quality commitment it strictly adheres to. Its MRS membership means that it adheres to strict guidelines regarding all phases of research, including research design and data collection; communicating with respondents; conducting fieldwork; analysis and reporting; data storage. The data sample of 2,000 UK adults is fully nationally representative. This means the sample is weighted to ONS criteria so that the gender, age, social grade, region and city of the respondents corresponds to the UK population as a whole. Within this sample, 857 respondents had investment portfolios worth in excess of £10,000 – this includes all assets from bonds and currencies to commodities and stocks and shares but excludes any savings, pensions or property that is used as their primary residency.

The impact of plastic banknotes

Over the years much have been discussed about the impact of plastic on the environment, with striking images and news of it harming animal and human health. In fact, past research revealed that plastic banknotes are distinctively worse for the planet than cotton-based as they have a high carbon footprint and increase permanent waste at the end-of-life cycle. According to statistics, between 1950 and 2015, more than 8.3 billion tonnes of plastic were produced worldwide. Not even 10% of this was recycled.

The negative environmental impact is also exacerbated by the ongoing problem of counterfeiting plastic banknotes, evident in relevant markets and countries. Since their introduction, the number of counterfeit notes on the streets has increased, presenting a major threat not only to the environment but also to our society and economies. But according to ECB, counterfeiting rates of cotton-based euro are now at their lowest level since its introduction, proving the embedded security in the cotton substrate is harder to forge.

Why are cotton banknotes more sustainable?

As a plant, cotton certainly impresses with its sustainable efficiency and negative carbon footprint. All crops produce greenhouse gases during production, including cotton, which emits 1.7 kilograms of carbon dioxide to produce one kilogram of fibre. However, in its leaves and soil, it binds 2.2 kilograms of the greenhouse gas, meaning it removes more CO₂ from the atmosphere than it emits. In addition, as cotton fibres are almost pure cellulose, cotton is a very good biodegradable natural fibre.

Enhancing sustainability further, the cotton substrate of the banknotes is derived from cotton combings, a by-product from the textile industry as they do not have the qualitative properties required for textile production. For banknote production, the short fibres are an ideal high-quality raw material.

Although the standard (or “no label”) cotton production requires large amounts of water and fertiliser, there is an increased focus on the use of water and carbon-reducing solutions throughout the value chain, and on certified sources in purchasing. Organisations such as WWF have been working closely with farmers, buyers and government agencies to promote more ecologically and ethically sound cotton and use water more efficiently. Companies have been increasingly reusing water during the production process as well as purifying it to filter out any harmful substances before discharging it.

Ensuring security and durability

While sustainability is an increasingly important element of today’s banknotes, it mustn’t come as a compromise to security and durability. Currently, present innovations and exclusive high-tech processes allow for a hybrid solution, in which minimum quantities of plastic are used to raise the durability of cotton-based banknotes to a level comparable to a 100% polymer substrate.

An ultra-thin film of polymer protects a cotton core where all the important and sophisticated security features and machine-readable elements are embedded, including watermarks, threads, foils, see-through windows, or optically variable stripes. During the sheet formation process, all these security features can be inseparably bonded to the banknote paper, providing maximum protection against counterfeiting. When it comes to polymer banknotes, security elements are either printed or applied using processes and machines similar to those in the mass market, therefore, consequently making the notes easier for counterfeiters to appropriate. On the other hand, cotton-based notes have their security features fully embedded in the substrate, applied or printed. This provides confidence in the authenticity and stability of cash as a public good.

As cash continues to be an essential part of people’s freedom of choice of their means of payment, banknotes must first and foremost offer confidence in their security to minimise fraudulent activities. There are, however, growing pressures across all industries and supply chains to prioritise sustainability too, with banknote creation and disposal being no different. Today’s advanced processes and technology help achieve the optimum balance between durability, security and sustainability. They guarantee banknote longevity and the highest levels of security - all while helping the environment and reducing unnecessary plastic waste. That way people can continue to enjoy physical money, knowing that by making cash payments, they don’t contribute to the climate crisis.