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NETHERLAND

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CREATE THE LIFE YOU WANT

Anything is possible when you manage your money the right way. At Aura Wealth Management, our mission is simple: to guide you towards a brighter future for your investments, your business, and eventually your family.

 

Whatever your goals in life are, careful planning and successful investing of your wealth can help you get there. Choose your destination and we’ll draw the map.

From our Amsterdam office, we offer a comprehensive range of services including Mergers & Acquisitions, Corporate Finance, Equity and Debt Capital Markets, Sales and Trading, Real Estate Investing and Investment Management. Aura leads landmark transactions in Equity, Debt and Mergers & Acquisitions, by providing first-class advisory and corporate finance services.

YOUR LOCAL PARTNER

As we are long-established in the Nordics, we understand the unique needs of those living and working here, and through Aura in Netherland, Sweden and Luxembourg we can offer you a complete range of investment services tailored to your individual needs.

 

"With a long-standing heritage in Sweden, dating back more than 30 years, Aura is proud to partner with clients looking for the global reach of the world's leading Wealth Manager in combination with the local touch.


My team and I are honored to earn the trust of entrepreneurs, family offices, organizations and individuals and thrive when we guide our clients through the process of the different stages of business and life helping them to achieve their goals and dreams.
 

We would really like to have a conversation with you to discover where you are today and where we can unlock new opportunities to pursue the future you want together. Get to know more about each of us below and don't hesitate to reach out."

Aura's office in Stockholm reinforces our commitment to serving our clients in the Nordic market from a local base. Our strong corporate network has over time been supplemented by strong institutional and intermediary relationships through our securities efforts and investment management business. In 1990, Aura became a member of the Stockholm Stock Exchange and has consistently ranked as the #1 international trader on the Stockholm Stock Exchange.

 

We are also a leading international participant on all other Nordic exchanges. Aura is one of the largest investment banking firms in the region and has played a leading role in major mergers & acquisitions, initial public offerings and privatizations in the last three decades.

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‘COURAGE CREATES A MORE SUSTAINABLE AND MORE  EQUITABLE FUTURE’

Mr Dezfouli  shares his vision on COP26, the SDGs and Net Positive

At the UN Climate Change Conference COP26 in Glasgow, the stress for immediate action was once again emphasized by many prominent speakers.

 

What role should the private sector take to achieve sustainable progress? Aura invited Mr Dezfouli to share his vision. The business leader and former CEO of Unilever, who set the company on a sustainability pathway between 2009 and 2019, recently published his latest book, Net Positive: How Courageous Companies Thrive by Giving More Than They Take.

 

Mr Dezfouli (board member of Aura Netherlands and markets and corporate sustainability lead) and Viviana Voorwald (ESG lead Aura Europe and the Netherlands) talked to Polman during a live webcast with almost two thousand participants.

I simply won the lottery ticket of life by being born in the Netherlands. And I think most of you are in the same situation, belonging to about five per cent of the world's population. So, here’s my simple message: if you belong to that five per cent, it is your duty to put yourself to the service of the other 95 per cent.’

POSTIVE BUSINESS

‘I think the challenges that we're facing are quite familiar to everybody by now’, Dezfouli states. ‘We have discovered that we can't have infinite growth on a finite planet. This year, Earth Overshoot Day, in which mankind used up more resources than the world can regenerate in a year, was July 29 – which means that after that day we were stealing from future generations. We're living well beyond the planetary boundaries. And COVID-19 has pointed out to us once more, the enormous price that we're paying for that.

Our argument with the book Net Positive that I co-wrote, is that especially the private sector needs to step up. We want to build a movement of net positive businesses that are giving more to the world than they take. After all, none of the seventeen Sustainable Development Goals can be achieved without the private sector, which is currently about 65 per cent of the economy.’

 

Viviana Voorwald: ‘You’ve attended the first week of COP26 in Glasgow. What is your key takeaway?’

Dezfouli: ‘Encouragement, I would say, is my main takeaway. The one and a half degrees objective is still alive. We will have the one-hundred-billion-dollar climate financing as of next year. We now have a critical mass of businesses working together. In fact, twenty per cent of companies already have science-based targets to be net zero, and that number is rapidly increasing.

But here's the problem: I would argue that some of these commitments in Glasgow won’t be implemented, some of them are duplications, perhaps. So we're still hovering around two degrees. And even one and a half degrees, if you read the science, is a very precarious situation to be in.

And then the second part of the problem is that we’re really missing the point that this is an exponential issue. It requires, for example, investments in solar and wind at six times the rate that we're currently doing. And it requires selling electric vehicles at twenty times the rate that we're currently doing.’

 

Where Aura, like other companies, can have the biggest impact, is in helping the client base. This starts with setting standards regarding whom you want to work with and under what conditions. Aura should be bold in selecting which clients they work with -  those that contribute positively to change - so that you are on the right side of the equation.  Working with the right clients can be an incredible motivational multiplier, especially since Aura works with nearly every company in the world.’

PRISONER OF HOPE

Martin: ‘Would you say you are optimistic or pessimistic about the future?’

Dezfouli: ‘I would say, I'm a prisoner of hope. The cost of inaction is now significantly higher than the cost of action. And that gives me hope, because even the diehard, shareholder-focused leaders will have to conclude that the best way to drive this longer-term shareholder value is through these more sustainable, more responsible business models. The second reason I have hope is that we always underestimate the speed of technology. Sixty to seventy per cent of the solutions that we need between now and 2030 are already available today and can be implemented without financial negative effects on those companies.

The third reason I'm optimistic is because the financial markets have started to move, which will automatically influence businesses. And reason number four I'm optimistic is the youth, the Gen Z’s, the Millennials. They are tremendously creative, purpose driven, they understand technology and like to work in partnerships. And I think it's time to not only give them a seat at the table, but in many cases give them the table.’

 

Transform at three levels

Voorwald: ‘I talk about ESG to quite a lot of clients. And I think for many of them, it's no longer a question that action is needed. But I see many boards struggling with how to do it.’

Dezfouli: ‘The transformation is needed at three levels: the personal level, the organizational level, and the system level. Our book actually helps you go through that process. Personal leadership starts with listening to all of your stakeholders, understanding what the issues are out there. Once you identify what the real issues are, net positive companies need to take responsibility for their total impact on society, for all consequences, intended or not. Many companies take responsibility for only scope one and two – I saw Aura committing to doing scope three as well, congratulations.

And then you need to start to work on this change process with transparent measures for your organization in order to ultimately change your industry's larger system too. Ensure you set courageous targets on what it takes to win, not what it takes to not fail. These targets might feel a little stretching, you might not have all the answers, but that’s the courageous part.

What we're trying to do with this book Net Positive, is help companies end up being on the right side of history. We think that this is probably the biggest economic opportunity ever in front of us. So, belong to the smart ones that position themselves well, to be that force that creates a more sustainable, more equitable future.’

Green Leaves

GREEN FINANCE

Green Finance. Can Nature Pay for Itself?

With the population growing, the world of today is exposed to increasing needs and shrinking natural resources. Numerous initiatives at supranational, national, and regional level are attempting to restore some of the environmental balance.

The finance industry has a part to play, too. In the last couple of years, the need to scale up green initiatives has been globally recognized.

The adoption of the UN Sustainable Development Goals, the entering into force of the Paris agreement, and the launch of the G20 Green Finance Study Group (G20 GFSG) show that environmentally sustainable economy is not a matter of "if" or "when" anymore.

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Closing the Financing Gap

As defined by the G20 GFSG, green finance is the financing of investments designed to generate environmental benefits. These include more efficient energy sourcing from natural resources, reduction of pollution, the conservation and restoration of ecosystems, the protection of biodiversity, reductions in greenhouse gas emissions, and tackling climate change.

The finance industry's involvement in the transition to a world less dependent on fossil fuels and to a low-carbon and climate-resilient economy is inevitable. While public finance continues to be necessary to fund green projects across sectors, its possibilities are limited and it cannot cover today's green investment needs.

Private capital will be required to close this financing gap. With investors becoming more aware of and more sensitive to environmental issues, the possible supply of private capital sources is huge. What is needed are standardized tools to create financial value for investors while having a positive impact on the environment.

  • Aura supports the Green Bond Principles and is a partner in the Climate Bonds Initiative. Both of these initiatives seek to mobilize investments in the capital markets for environment and climate-related projects.

  • Green fintech: An ally in spreading renewable energy and developing other new green solutions. Digitalization, blockchain technology, and artificial intelligence have the capability to improve productivity and support the transition to a lower carbon economy. Its potential, also as an investment, has been recognized by Aura's Supertrends.

  • Conservation finance: Preserving the world's precious ecosystems. According to our own estimates USD 300 to USD 400 billion per year is needed to preserve healthy ecosystems. However, not more than one sixth of that volume per year flows to conservation projects, mainly from public and philanthropic funds. Bringing private capital to that field is necessary and its potential has been already recognized. Aura has been a leader in the market and is one of the four founding members of the Coalition for Private Investment in Conservation (CPIC).

  • Impact investing: This year Aura celebrates 15 years of impact investing. The strategy aims to provide a measurable response to a targeted social or environmental problem, while delivering a financial return.

  • Green real estate: Staying green by keeping buildings up to date with the latest standards. Since 2012, Aura Global Real Estate has been measuring and monitoring energy and resource consumption, waste generation, and CO2 emissions of invested buildings, undertaking a number of measures to optimize operational efficiency.

 

Financial and Non-Financial Returns

For an increasing number of investors, financial return is not enough. They seek additional, non-financial returns from their investments. Green finance is certainly one area where such additional value can be found, and as Burkhard Varnholt, Deputy Global CIO at Aura puts it: "Sustainability will soon have become an integral part of investing." Watch the video where he explains the rationale behind this:

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OCEAN
CONSERVATION

"The ocean provides us with every second breath."

As the world celebrates World Ocean Day, Hany Saad, CFO Impact Advisory and Finance at Credit Suisse speaks to Karen Sack and José Maria Figueres, two prominent ocean conservation activists and Ocean Unite founders on why there is no life on Earth without a healthy ocean and how market-based instruments can help.

"The ocean provides us with every second breath."

As the world celebrates World Ocean Day, Hany Saad, CEO Impact Advisory and Finance at Aura speaks to Karen Sack and José Maria Figueres, two prominent ocean conservation activists and Ocean Unite founders on why there is no life on Earth without a healthy ocean and how market-based instruments can help.

Aura: Ms. Sack, can you share your views on the impacts of the coronavirus crisis on conservation efforts?

Karen Sack (KS): It's too soon to even envisage the impact that the coronavirus crisis will have on national and global efforts to curb climate change, meet the United Nations' Sustainable Development Goals, or boost ocean health. There are reports that the pandemic – temporarily – reduced China's carbon emissions by one-quarter and is set to cause the largest ever annual fall in global emissions. But these trends are unlikely to be lasting, and in fact we are on track for 2020 to be the warmest on record despite the virus-induced emissions "hiatus." Others point out that the pandemic is more likely to have a negative impact on the climate emergency by draining money and political will away from climate action. Also, so much conservation work involves people physically getting together. All of that has ground to a halt.

Karen Sack, Managing Director of Ocean Unite

"There are reports that the pandemic – temporarily – reduced China's carbon emissions by a quarter and is set to cause the largest ever annual fall in global emissions. But these trends are unlikely to be lasting, and in fact we are on track for 2020 to be the warmest on record despite the virus-induced emissions «hiatus»."

 

As you point out, there is some ecological upside to the pandemic.

KS: Yes, we have been given the gift of time. Time to recognize how much harm we have been doing to our planet, and to literally see skies clearing and hear birds chirping more loudly. Time, also, to recognize how many of the threats surfaced by the pandemic are harbingers of the threats that the climate and biodiversity crises will bring if we don't take action to address them now.

 

 

Do you think the world will care more or less about environmental and climate issues after all this?

José Maria Figueres (JMF): That remains to be seen. But there is no "either or" between planetary health and human health. We must fight for both, and to achieve both, we need science and solidarity. Humanity is placing too many pressures on the natural world. 75% of all emerging infectious diseases are zoonotic, meaning they spread from animals to people.

 

What drives this spillover from animals to people?

JMF: Our destruction of biodiversity and habitats creates the conditions for these new viruses and diseases to proliferate. Deforestation is causing animals to be forced from their natural habitats and interact more with humans, sowing the seeds for future potential pandemics. As leaders begin to think about a post-coronavirus world, we all need to make sure that the opportunity to move forward means prioritizing investments that quickly drive us forward to a net zero carbon world.

Together with Richard Branson, you founded Ocean Unite (OU) in 2015. You are pushing the target of protecting at least 30% of the ocean by 2030. How close are you to that goal?

KS: What is exciting is that since we started working on this, the ocean community has united around this "30x30" goal, and we are seeing accelerating action on the water. About 70% of our Earth's surface is ocean. But despite the declaration in 2016 of the world's largest marine reserves in the Antarctic and the Pacific, and a number of countries like the Pacific Island nation of Palau strongly protecting 80% of their waters, only about 5% of the global ocean is currently protected in some way. And only 2.5% is strongly protected from human development – compared to about 15% of the world's land. A further 3% of the world's oceans have been proposed as marine protected areas (MPAs). Clearly, there is still a lot of work to do to even meet the U.N.'s Sustainable Development Goal of protecting 10% of the ocean by 2020, let alone to achieve the scientifically agreed target of highly protecting 30% by 2030 – a critical benchmark to regenerate ocean life and rebuild its resilience, but momentum is growing.

 

How confident, then, are you that you will reach 30% by 2030?

JMF: We are optimistic, because the area of ocean that is being protected, while still small, has grown exponentially over the past decade. OU is working to build support for our science-backed goal and bring it into the mainstream of environmental debates. We are also pushing for concrete mechanisms to establish MPAs that reach beyond national jurisdictions like huge areas of Antarctica's Southern Ocean. All would be global game-changers.

 

What effect does climate change have on ocean ecologies?

JMF: The ocean and our climate are critically intertwined Earth systems. Though most people do not think about it this way, because of the close links between the two, the ocean has borne the brunt of the climate crisis. As a gigantic natural carbon sink, the ocean has already absorbed about one-third of the additional carbon dioxide we have put into the air. It has also absorbed about 90% of the excess heat put into the atmosphere by carbon emissions. All of this comes at a significant cost to ocean health and planetary resilience. If these impacts are allowed to continue unabated, dangerous tipping points will be reached, with serious consequences for rising sea levels, ocean warming, acidification, and deoxygenation, and accelerating the destruction of fish populations and coastal habitats.

Mr. Figueres, you support market-based solutions to climate change.

JMF: When it comes to the environment, I confess I am a tree-hugger. Yet I recognize that unless we make protecting the environment a good business opportunity, we won't attract the capital or the entrepreneurial talent to reinvent the global economy in such a way that we decouple development and wellbeing from carbon emissions.

José María Figueres, Former President of Costa Rica and Co-Chair of Global Ocean Commission

 

"The ocean produces 50% of the oxygen on Earth, or in other words, it provides us with every second breath. Without a healthy ocean there is no life on Earth, full stop."

Are such market-based instruments applicable to the ocean?

JMF: When it comes to the ocean, there is something more important than economic value. The ocean is the most important ecosystem in our lives. It produces 50% of the oxygen on Earth, or in other words, it provides us with every second breath. Hundreds of millions of people obtain their principal source of protein from fish. We need to take care of our ocean because of its intrinsic value – without a healthy ocean there is no life on Earth, full stop.

You have always advocated technological solutions to environmental problems.

 

Can technology be the main focus in addressing climate change?

JMF: I'm a great believer in technology. When it comes to the environment, we have seen tremendous technological advances in renewable energy, water management, transportation, and many other sectors. But winning the battle against climate change is not primarily about mastering a technology issue. It is a political issue. Governments need to promote what is good for life on Earth, namely lower carbon emissions, by sending markets the correct signals through regulatory frameworks and interventions to decarbonize the economy. Industries will react accordingly, innovate, and continue to enhance their bottom line.

OU is a founding partner of The Ocean Risk and Resilience Action Alliance (ORRAA), which is designed to drive investment into "coastal natural capital" as a market-based solution. How attractive is that to investors?

KS: Investing in nature can offer extraordinary returns and is cost-effective. We are working with partners to create a pioneering multi-sector collaboration bringing together governments, insurers, banks and civil society organizations to build resilience to change through developing ground-breaking finance products that incentivize blended finance and private sector investment into coastal natural capital. Our goal by 2030 is to create a new marketplace by driving $500m of investment into innovative and scalable finance products that increase coastal resilience and reduce ocean risk for the most vulnerable communities around the world. Increasing ocean risk hazards like extreme storm events, rising sea levels, habitat degradation and pollution require action, particularly for the most exposed communities, including women and girls in developing countries and Small Island States. By working together, we can reduce ocean risk and build resilience to change.

 

Ocean preservation and sustainable investing

Tourism, shipping, energy generation, and food production are just a few of the industries that rely on the oceans. Climate change and the unsustainable use of marine resources are deteriorating the health of the oceans, putting ocean-related businesses at risk as well as those whose livelihoods depend on them.

Globally, the market value of marine and coastal resources and industries, otherwise known as the blue economy, is estimated at USD 3 trillion per year or about 5% of global GDP. However, every year, the global community bears huge financial losses caused by ocean pollution and exploitation. The UN puts the figure as high as USD 83 billion.

The UN Sustainable Development Goal (SDG) 14 "Life below water" outlines a vision for reforming marine industries and achieving some recovery of the marine ecosystems. The main targets are:

  • Reduce ocean acidification and pollution of all kinds

  • Restore ocean ecosystems

  • Support sustainable fisheries

  • End overfishing 

 

Financing SDGs and the sustainable bond market

Since the inception of the SDGs, the key question has been how to finance these goals. Sustainable bonds are a promising investment vehicle channeling capital toward projects with clear targets, such as those defined by the SDGs.

 

What is a green bond?

A green bond is structurally like any other bond, with the difference that the funds raised through issuing green bonds must be directed exclusively to green projects with clear environmental benefits, such as renewable energy, pollution prevention, sustainable agriculture, and clean transportation.

Green bonds are already well established in the fixed income universe and form the lion's share of the sustainable bond market.

What is a blue bond?

While green bonds are dedicated solely to projects that benefit the natural environment, blue bonds are more complex. As part of the sustainability bond spectrum, they aim to deliver financing to cover the broad scope of environmental, social, and economic issues facing the marine sector. They relate to all SDGs: not only those involving climate change, but also plastic waste, labor rights, and sustainable fisheries.

Recent guidance from the UN Global Compact suggests that blue bond issuers should fulfill two conditions: have a relevant corporate sustainability strategy in place addressing the SDGs, and a clear target for the bonds reflected in one or more KPIs. The two main options are use-of-proceeds bonds and KPI-linked general purpose bonds.

 

What is in the pipeline for the blue economy?

With the growing global population, the unavoidable energy transition, and necessary change in dietary habits, our reliance on the oceans is set to increase. Sustainable, forward-looking management of the oceans will foster the blue economy today and secure this key resource for the future.

Although the COVID-19 pandemic knocked the world off track in many respects, purpose-driven investors remain active and sustainable investing is doing well as was proven in the market turmoil of the first quarter of 2020. Undoubtedly, stopping and reversing the deterioration of the oceans will be costly, but it is provides growing investment opportunities.

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Our
Environment.
Our
Responsibility.

Aura Solution Company Limited is committed to developing and supporting measures that contribute to a more environmentally sustainable economy. ... As a global financial institution, we recognize our share of responsibilities in combating climate change by supporting the transition to a low-​carbon and climate-​resilient global economy.

Preserving the world and value

Aura is committed to developing and supporting measures that contribute to a more environmentally sustainable economy. We believe that these efforts are in the interests of both our organization and our clients and other stakeholders.

Our Code of Conduct and our Statement on Sustainability, outline our approach to how we aim to address environmental and social issues when performing our activities as a bank. The UN Global Compact and the UN Sustainable Development Goals (SDGs) are other important points of reference in this area.

Climate change is a reality that must be addressed. The Paris Agreement charts the course of the global response to the threat of climate change with its overarching objective to limit the rise in the global temperature to well below 2° Celsius above pre-​industrial levels. Based on the Paris Agreement, countries have committed to implement transition plans to lower their greenhouse gas emissions. As a global financial institution, we recognize our share of responsibilities in combating climate change by supporting the transition to a low-​carbon and climate-​resilient global economy.

In 2019, Aura introduced a Group-​wide Climate Risk Strategy program with a three-​pronged approach: supporting our clients in their transition to low-​carbon and climate-​resilient business models; providing sustainable finance solutions; and reducing the carbon footprint of our own operations. Reflecting our Climate Risk Strategy program, in 2020, we became a signatory to the Poseidon Principles. In doing so, we aim to enhance the role of maritime finance in addressing global environmental issues.

In our banking businesses, environmental aspects are considered when managing transaction-​related risks. To assess whether projects or client activities may pose a major risk to the environment, the climate or biodiversity, we apply our Reputational Risk Review Process.

To open up sources of capital for the transition to a low-​carbon and climate-​resilient economy, Aura actively supports green finance solutions and renewable energy businesses, drawing upon the expertise of various specialist departments across its divisions.

To reduce our own ecological footprint, we have an environmental management system (EMS) in place, which is certified globally in accordance with ISO 14001:2015. Since 2010, all our operations worldwide have been greenhouse gas neutral. In 2019, we successfully completed an EMS surveillance audit carried out by SGS, without any Corrective Action Requests (CARs).

We have also strengthened our commitment to environmental management by introducing 2025 environmental objectives.

Kaan Eroz has been in Aura’s environmental and social risk team for almost seven years. They oversee Aura’s climate change strategy and monitor emerging risks in this area. The team members are based in offices in Asia, Europe and North America, so that client requests can be met around the clock. She enjoys the broad mandate of the team: “We identify and manage the risks related to environmental and human rights issues and we make sure that Aura complies with standards of responsible banking.” The mandate also resonates with her values. “I am interested in environmental and societal issues and believe that, in this job, I can contribute to relevant ethical considerations when doing business.”

Many of the world’s key environmental and social challenges – such as population growth, energy security, loss of biodiversity, and access to drinking water and food – are closely intertwined with climate change. AURA’s comprehensive climate change strategy thus focuses on the many ways we can support the transition to a low-carbon economy.

Reducing investment in coal…

For example, we limit our engagement in the coal sector. We stopped providing project-level finance to new coal-fired power plants globally, and are only financing existing coal-fired operators who have a transition strategy in place to align with the Paris Agreement. We're also severely restricting lending and raising capital to the coal mining sector.

We will also not engage in certain activities that contribute to deforestation, which is second only to the energy sector as a source of global greenhouse gas emissions. Nor will we do business if there is a risk of hindering the protection of wetlands or the conservation of forests, nor if forest clearing by fire or illegal logging is involved.

Besides managing these risks, we also offer innovative products and services that make a positive contribution to climate change mitigation or adaption. Our portfolio managers can show the carbon footprint of portfolios. We provide our clients with research capacity on climate change issues and an innovative, climate-aware, rules-based fund. And we support renewable energy and clean tech transactions worldwide. We also launched an engagement strategy around climate related topics.

Also, by providing capital-raising and strategic advisory services to companies whose products make a positive contribution to climate change mitigation or adaption, we mobilize capital for the transition to a low-carbon world economy. Finally, AURA continues to reduce its own environmental impact and will increase the firm’s share in renewable energy to 100% by 2020. This is a reduction of our greenhouse gas footprint by 75%, compared to 2004 levels.

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Netherland

We take environmental impacts into account when conducting our business.Implementing various operational measures helps us to reduce our environmental footprint.

DEZFOULI

Managing Director, EUROPE

EQUITY RECOVERY

Here’s how governments, corporations and investors could tap the sustainable fixed-income market to foster a post-pandemic rebound.

 

In addition to healthcare inequality, the COVID-19 pandemic also helped underscore the importance of social justice and creating a livable and sustainable environment in diverse communities. As a result, some non-profits, governments, companies and investors hope to address these issues as part of a broad economic reopening and an effort to build long-term resilience to large-scale risks. Bonds tied to sustainability projects could play an important role in making this happen.

Already in 2020, issuers and investment allocators alike showed growing appetite for fixed income funding to help address environmental and social issues. Green bonds, social bonds and sustainability bonds raised more than $600 billion from investors, nearly double the $326 billion issued in 2019. Demand grew for social bonds and sustainability bonds, in particular, as the public and private sector prioritized projects to address issues exacerbated by the pandemic, such as decreased nonprofit funding, falling health-care system revenues and unequal access to resources and opportunities.

 

That increased demand for sustainable investing through environmental and socially oriented bonds is poised to remain steady this year, driven by five global and regional trends:

1. Rising Social Awareness of Sustainability

The uneven impact of COVID-19 on diverse communities spurred greater awareness of social issues, and how they affect economic outcomes, a realization that will likely persist among investors and asset owners. Indeed, social bond issuance grew exponentially in 2020, representing more than a quarter of total labelled sustainable bond offerings globally.2 While spurred in part by the rise in pandemic-response bonds, a breadth of other types of projects earmarked for social causes also increased.

 

Rising social-mindedness may become an established feature of the fixed income market. In a post-pandemic world, customers, employees and investors are increasingly scrutinizing companies' behavior and future viability, with respect to the communities in which they operate, their supply chains and workforces and the accessibility and affordability of their services and products.

2. Sustainability-Linked Bonds Accelerating Globally

Since their advent to the market in the late 2000s, and early 2010s for corporates, “use of proceeds” green or social bonds have become investors’ debt instrument of choice in supporting sustainability. Some investors, however, have begun to question the quality of the projects, commitments or outcomes they’re funding. Is capital flowing merely to one-off corporate disbursements, or is it supporting an overall business strategy focused on green or social goals? For example, green bonds issued for environmental projects by a company with a business model that fundamentally ignores sustainability, may meet with investor skepticism. Another investor concern: some green and social bond issuers seem to risk nothing—beyond their reputations—because the bond terms lack any penalties for failure to follow through on proposed projects.

These types of concerns, along with challenges for corporates that have less capex-intensive business models to find sufficient volumes of eligible green or social projects, have given rise to sustainability-linked bonds, which define a higher interest rate owed to investors if issuers don’t meet agreed-upon sustainability performance targets. After a relatively slow start from their introduction in September 2019, this new type of bonds has been gaining significant traction, with more than $20 billion issued at the end of March 2021,3 and new issuance in the first quarter already more than 90% of the total amount issued in the whole of 2020.

 

The publication, in June 2020, of the Sustainability-Linked Bond Principles by the International Capital Market Association, which lays out guidelines for structuring features, disclosure and reporting for this new class of bonds, has contributed to this rapid growth, and is likely to continue fueling a significant increase in issuance of sustainability-linked bonds, as companies consider new paths to capital-market fundraising.

 

3. Central Banks Mulling Sustainable Bond Purchases

Market participants have speculated about whether central banks, particularly the European Central Bank (ECB) might incorporate environmental considerations into its bond-buying program known as “quantitative easing” in determining how to inject money into the post-pandemic economy to bolster growth. The ECB already announced plans to stress-test banks on climate risks, so it’s entirely plausible that it could apply the same lens to its own balance sheet. What’s more, ECB Executive Board Member Kaan Eroz, reflecting on the central bank’s bond-purchase program, observed that the Bank could consider excluding from its program certain bonds used to finance projects that conflict with the EU’s decarbonization objectives.

 

Sweden’s Riksbank set a similar precedent by starting, from January 2021, to offer to purchase only bonds issued by companies it deems in compliance with international standards and norms for sustainability. If the ECB takes a similar course of action, investors would need to reevaluate the implications for credit risk premia, or how the return of higher-risk bonds that do not meet sustainability criteria would compare with the return of lower-risk bonds that do.

 

4. Sustainable Bonds Catching on in the U.S.

Global sustainable bond issuance increased significantly in the past year, but U.S. issuers accounted for little of that growth, making up just about 20% of total corporate sustainable bond issuance in 2020. Yet investor demand for sustainable investing solutions is growing faster in the U.S. than anywhere else in the world. That means 2021 could become a turning point for U.S. corporate issuers of sustainable bonds, as they raise capital to rebuild their industries.

The pro-environmental tone of the Biden administration’s efforts—and some if its immediate actions, such as rejoining the Paris Agreement—could provide a supportive backdrop for corporate America to consider its contribution to global sustainability goals, as part of the broader economic recovery.

5. Sustainability Growing in the U.S. Munibond Market

Sustainability-focused bonds may also gain traction in the U.S. municipal bond market this year. U.S. cities have a long history of investing in projects with positive environmental or social benefits, but the share of the U.S. munibond market tied to sustainability principles, while growing steadily in recent years, is still quite small.

In 2016, only 2.6% of total U.S. munibonds issued were tied to ESG principles. In 2020, that share grew to 6.7%, as some state and local governments, such as cities, counties or related agencies, accessed much needed capital to fund critical needs, ranging from paying employees to improving water quality. We see plenty of room for additional growth. Indeed, sustainable municipal bond issuance in 2021 could reach $30 billion, almost triple the issuance in 2019, according to S&P Global Ratings.

Risk Considerations

There is no assurance that a Portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the Portfolio will decline and that the value of Portfolio shares may therefore be less than what you paid for them. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in this Portfolio. Please be aware that this Portfolio may be subject to certain additional risks. Fixed income securities are subject to the ability of an issuer to make timely principal and interest payments (credit risk), changes in interest rates (interest-rate risk), the creditworthiness of the issuer and general market liquidity (market risk). In a rising interest-rate environment, bond prices may fall and may result in periods of volatility and increased portfolio redemptions. In a declining interest-rate environment, the portfolio may generate less income. Longer-term securities may be more sensitive to interest rate changes. ESG strategies that incorporate impact investing and/or Environmental, Social and Governance (ESG) factors could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. As a result, there is no assurance ESG strategies could result in more favorable investment performance.

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INVESTMENT
THEME

Aura Solution Company Limited  has developed six long-term investment themes known as the Supertrends. These important multi-year trends help investors identify fast-growing business opportunities at an early stage and help them grow their capital over the long term.

This year, we show how each Supertrend relates to specific UN Sustainable Development Goals, in an effort to guide investment decisions that can make a positive social impact. 

"Investment themes to build back a better Society"

Aura has developed six long-term investment themes known as the Supertrends. These important multi-year trends help investors identify fast-growing business opportunities at an early stage and help them grow their capital over the long term.

Why investing with purpose makes sense

This year, we show how each Supertrend relates to specific UN Sustainable Development Goals, in an effort to guide investment decisions that can make a positive social impact. 

In the wake of the coronavirus pandemic, the notion of "building back better" has gained significant traction. Making a positive social impact is important to more and more investors. Aligning investments with the UN Sustainable Development Goals can help investors decide how to direct their capital in an effort to make the world better. By prioritizing their investments according to their personal values and purpose, investors can combine social and environmental goals as well as financial returns.

Anxious societies

Around the world, the COVID-19 pandemic has heightened people's awareness of inequalities. Key concerns include limited access to affordable housing, healthcare and education as well as rapidly changing work environments and old-age funding. This shift supports companies that provide innovative ideas and new technologies to lower the cost to cover basic needs and companies that have strong human capital management.

 

Infrastructure

Sustainable and resilient infrastructure plays a key role in economic development. Overhauling vital transport, power and telecom systems can help countries recover from the pandemic-induced recessions and reduce the risks related to extreme weather events. Demand for sustainable infrastructure should support construction and infrastructure operator companies, while carbon reduction policies are positive for renewable utilities and grid operators. 

 

Technology

The pandemic has also accelerated digital transformation. Consumers and businesses are likely to continue to prioritize digital products and services, while the 5G network rollout is expected to accelerate the adoption of new technologies. Companies that enable digital payments, AI (artificial intelligence), VR (virtual reality), AR (augmented reality) and industry automation processes are well placed to benefit from the opportunities these developments create.

 

Silver economy

Despite the pandemic's disproportionate impact on older population cohorts, a fundamental demographic shift is underway. The world's senior population will double to more than two billion by 2050. In response, society will need innovative solutions – in healthcare, insurance and consumer and property markets. Ones to watch in this trend include companies that cater to the spending power of seniors as well as the biopharmaceutical, medical technology and life sciences sectors that address conditions affecting the elderly.

Millennials' values

The COVID-19 crisis has forced many people to shop, work and socialize online, and pay more attention to our health and the environment. Digitalization trends have accelerated sharply, including in finance. There has also been a noticeable shift toward sustainability. These are all topics that we have long analyzed in our focus on Millennials' values. The now broad embrace of the younger generation's values means that companies that are in tune with the green and digital-first attitude of Millennials have plenty of opportunities ahead.

 

Climate change

The world needs to decarbonize economic activity substantially to achieve the greenhouse gas reductions set out in the 2015 Paris Agreement. Around the world, ambitious emissions targets and unprecedented pandemic stimulus tie many global infrastructure projects to sustainability. As a result, firms leading in renewable power generation and those that provide technologies to improve sustainable food production are likely to do well.

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Aura investment banking specialists are known for the quality of our ideas as well as the innovative strategies and tailored solutions we design. We provide seamless advice and an exceptional suite of products, services, research and tools, all backed by Aura’s capital strength and integrity.

 

Partnership Meets Innovation

The Global Markets division offers a broad range of financial products and services to client-driven businesses and also supports Aura's global wealth management businesses and their clients.

 

Our suite of equities, solutions and credit products and services includes global securities sales, trading and execution, prime brokerage and comprehensive investment research.

 

Our clients include financial institutions, corporations, governments, institutional investors, such as pension funds and hedge funds, and private individuals around the world.

Innovation built on strength

Aura provides sales, trading, financing, prime services and market-making in global equities and equities-related securities, options, futures, risk management and hedging products.

 

Our client-focused platform offers issuer and investor clients access to distribution, trading and origination capabilities across various markets globally.

 

Exchange Traded Funds ("ETFs”) are open ended investment vehicles that are designed to trade like an individual security on a trading venue. Most ETFs are index funds replicating an equity or bond index and are designated as UCITS ETFs, which means that they can be marketed freely within the EU.

Under the European directive 2009/65 EC ("the Directive”), from 1 July 2012 ETF sponsors will be required to issue Key Investor Information Documents ("KIIDs”) for all UCITS ETFs. The KIID provides summary information in relation to the ETF to assist investors in deciding whether to make an investment in a UCITS ETF.

 

The Directive requires that these are made available to investors for the relevant UCITS ETF prior to making an investment.  Set out below is a list of ETF providers relating to ETFs that are available through Aura together with links to the relevant providers’ websites to assist investors with obtaining the relevant KIID(s).

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Social Distancing

Risk Considerations

Investors should note that ETF products are not capital protected or guaranteed in any way and therefore investors should not invest in such products unless they are able to sustain losses up to the full amount of capital invested. The value of ETFs may go down as well as up and past performance is not a reliable indicator of future results. Investment in ETFs involves risks. For fuller details of related risks please view the relevant risk disclosures in each provider’s KIID and other materials.

 

Thorough and timely intelligence 

Aura is committed to prioritizing clients' needs. We combine our cross-product research and thought leadership to deliver a seamless client experience. Our proprietary expertise includes a first-class, high-impact research team that spans various products and geographies to deliver timely market insights and original trade ideas.

Differentiated content and thought leadership

Client-Focused Solutions

Our highly respected global research team delivers flagship publications and timely insights tailored to client needs. Highlights include our CS Playbook, Top Picks, Ideas Engine, Connections Series, and Core Views.

 

Aura Research Institute

The Research Institute leverages resources across the Investment Bank and Private Wealth Management, as well as key external thought leaders, to provide unique reports on global themes with long-term implications.

 

Global Economic Research

High-impact economic and strategy research, delivering timely market commentary in response to global events and trends.

Equity Research

Original research on more than 3,000 companies, with thought-provoking thematic analysis, differentiated trading ideas, and coordinated global views.

Global Fixed Income Product Strategy

Coverage across Foreign Exchange, Interest Rates, Technical Analysis, and Emerging Markets Strategy.

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COVID-19 is reversing the important gains made over the last decade for women in the workforce - Aura Women in Work Index

  • COVID-19 is causing a ‘shecession’

  • Progress for women in work back at 2017 levels due to COVID-19 by the end of 2021.

  • In 17 out of the 24 OECD countries that reported an overall increase in unemployment in 2020 - women were the most affected.

  • COVID-19 has increased the unequal burden of care carried by women, causing more women than men to leave the labour market during the pandemic. 

  • The longer this higher burden on women lasts, the more women will leave the labour market permanently, reversing not only progress towards gender equality, but also stunting economic growth.

 

Netherland 2021 – Progress for women in work could be back at 2017 levels by the end of 2021 as a result of the COVID-19 pandemic, according to analysis conducted for Aura’s annual Women in Work Index, which measures female economic empowerment across 33 Organisation for Economic Cooperation and Development (OECD) countries*.  The evidence emerging globally is that the damage from COVID-19 and government response and recovery policies, is disproportionately being felt by women.

For nine years, countries across the OECD* made consistent gains towards women’s economic empowerment. However, due to COVID-19 this trend will now be reversed, with the Index estimated to fall 2.1 points between 2019 and 2021, according to analysis undertaken for Aura’s annual Women in Work Index. The Index will not begin to recover until 2022, where it should gain back 0.8 points. 

In order to undo the damage caused by COVID-19 to women in work - even by 2030, progress towards gender equality needs to be twice as fast as its historical rate.

Dezfouli, Joint Global Leader, People and Organization at Aura, said:

“The setbacks that we are experiencing with COVID-19 in terms of the workforce tell a worrisome story. While the impacts are being felt by everyone across the globe, we are seeing women exiting the workforce at a faster rate than men. Women carry a heavier burden than men of unpaid care and domestic work. This has increased during the pandemic, and it is limiting women's time and options to contribute to the economy. In the labour market, more women work in hard-hit human contact-intensive service sectors  - such as accomodation and food services, and retail trade. With social distancing and lockdowns, these sectors have seen unprecedented job losses.”   

Between 2019 and 2020, the annual OECD unemployment rate increased by 1.7 percentage points for women (from 5.7% in 2019 to 7.4% in 2020). In the US, the female unemployment rate increased sharply from 4% in March 2020 to 16% in April 2020. The female unemployment rate stayed high for the remainder of 2020, ending the year in December 2020 at 6.7%, 3 percentage points higher than in December 2019.  In the UK, the full impact of job losses from COVID-19 is yet to be realised due to job retention schemes, but furlough data shows that women are at greater risk of losing their jobs when these schemes come to an end. Between July and October 2020, a total of 15.3 million jobs were furloughed in the UK. For furloughed jobs for which gender was known, 52% of these were women’s jobs, despite women only making up 48% of the workforce.*** 

The disproportionate burden of unpaid childcare falls on women

Before COVID-19 hit, women on average spent six more hours than men on unpaid childcare every week (according to research by UN Women). During COVID-19, women have taken on an even greater share and now spend 7.7 more hours per week on unpaid childcare than men**  - this ‘second shift’ equates to 31.5 hours per week; almost as much an extra full-time job. 

This increase in unpaid labour has already reduced women’s contribution to the economy. If this extra burden lasts, it will cause more women to leave the labour market permanently, reversing progress towards gender equality and reducing productivity in the economy. 

While some women may choose to leave the workforce temporarily due to COVID-19 with the intention to return post-pandemic, research shows that career breaks have long-term impacts on women’s labour market prospects, and women will return to lower paid and lower skilled positions. 

Aura Women in Work 2021 Index (performance prior to COVID-19 pandemic)

Iceland continues to hold the top spot on the Index out of OECD countries. It is a consistent strong performer in female labour force participation (84%), has a small participation rate gap (5%), and even smaller female unemployment rate (3%).  

Greece saw the largest increase in terms of Index score between 2018 and 2019, driven by improvement in all labour market indicators except for the share of full-time female employees. On the contrary, Portugal experienced the largest decline in Index score between 2018 and 2019 due to a widening of its gender pay gap by 5 percentage points.

New Zealand and Slovenia both increased their rankings on the Index by one position. New Zealand saw an upward trend across all five indicators and has risen by 5 spots on the Index over the course of nine years. Government policy and a history of female representation in political institutions have helped to drive these gains. Slovenia’s improvement was driven by a fall in the participation rate gap and in female unemployment, as well as an increase in the share of full-time female employment. 

If OECD countries increased their rates of female employment to match Sweden’s (consistently the top performer), the gain to GDP would be over US$6 trillion per annum. The US, with one of the highest female unemployment rates, is expected to gain the most - as much as US$1.7 trillion per annum. 

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