This Is Why We Need High-Quality News Sources

ball of generic newspapers with the word NEWS visible

Take a quick scan of online news and you might conclude that the internet has played an important role in democratising the spread of information.

Makes sense. There appear to be more news providers than ever, liberated by the near-zero cost of digital publishing.

No longer is the flow of news restricted by the time, trouble and, above all, cost of printing and distributing news content to readers.

Instead, the process of publishing news is reduced mainly to its essentials: gathering, selecting and collating.

Certainly the proliferation of information sources complicates our task at VitalBriefing of searching, curating and summarising relevant news to distribute to our clients. The volume of online information relating to a particular topic or issue has exploded massively in recent decades. As such, it significantly increases the importance of our role in assessing and selecting the sources we use to find the news our clients need.

Yet, what we’ve found is that even as the number of news sources rises each year — and in a multitude of languages — the proportion of those that are high-quality and reliable is diminishing. And not only as a proportion of the overall information flow, but in absolute terms.

In short, as quantity is swelling, quality is waning.

Shrinking pool of experience

There’s no secret behind this. Gathering news in a serious way is an expensive business. Across Europe and other parts of the world, the number of news organisations with the resources to provide comprehensive coverage of current affairs at a national and international level is shrinking.

The erosion of newspapers’ advertising base (not to mention those of TV and radio stations) by competition from internet platforms has undermined their ability to employ journalists and editors of the highest quality.

Experience is a particularly expensive quality, and many news organisations find they cannot afford much, if any, or at least not as much as in the past. And many news businesses have struggled to really understand the internet, its business models, audience behaviour — and to compete successfully for revenues there.

An aspect of the shrinking of breadth and depth in the news business long predates the internet. Until some 20 years ago, many newspapers employed teams of foreign correspondents, bringing their readers first-hand accounts of international news.

Starting in the 1970s and accelerating, however, their numbers have steadily been shrinking as media instead turn to news agencies such as Reuters, the Associated Press, dpa and Agence France-Presse.

The wire services strive to provide a good service but they are not immune to budgetary headwinds. This has an impact on the number, experience and expertise of the journalists they employ, and even more the editors who act as gatekeepers of the quality of their work.

Over the past couple of decades, I have seen numerous examples of how these constraints are eroding quality and accuracy.

When information matters

It doesn’t help that news information as a commodity is significantly less valuable than financial data — which is important, but to large segments of the public, even among decision-makers in business and politics, often means little without expert and cogent analysis.

Not that financial and business news are exempt from the overall trend toward erosion of expertise and quality. Quite the contrary: Many more lucrative activities can be performed with a sound knowledge of finance, economics and business than to write about it.

That shows in the output. The result is a diminishing pool of capability and understanding in areas in which it matters greatly.

I see too many young journalists trying to deal with complex topics for which they lack sufficient grounding. I should know — I was one of them. But I was fortunate to benefit from the guidance of mentors and editors who taught me over the years. I fear there are far fewer such influences around today. As noted, they’re expensive.

And the quality of coverage is all the poorer for it.

Original content and press releases

In the absence of sufficient journalistic expertise to create valuable original content, the void is filled by official information and press releases.

True, thanks to Google and its peers it’s so much easier today to seek out information online than by making phone calls or, perish the thought, visiting libraries. But scraping data from companies’ websites is no substitute for critical analysis and asking difficult questions.

The notion of press releases takes us full circle to the issue of the proliferation of what appear to be online news sources. A substantial proportion of the information found online is simply that — recycled press releases begging for clicks that bring revenue from advertisers.

Yes, it’s information of a sort. But journalism it isn’t.

So you’re thrown back to a diminishing circle of news organisations that still remain dedicated to reporting and analysis that enhances the knowledge and understanding of its audience. In many cases they support themselves through subscription plans that inevitably restrict the availability of that high-quality information.

Some, bravely, are trying to avoid this fate. I’m thinking of outlets such as the left-of-centre UK newspaper The Guardian, which asks readers to donate what they can, or The Washington Post, that found a high-rolling saviour in the form of Jeff Bezos.

Why quality matters

If you ever doubt the value of high-quality news sources, consider the more than five years spent by the Financial Times (full disclosure: I have worked for the FT from time to time over many years) investigating the credibility of the financial statements of Germany’s fintech stock market darling of the 2010s, payment processor Wirecard.

For years, the newspaper’s journalists kept nagging away at inconsistencies and discrepancies in Wirecard’s accounts that pretty much wholly escaped the company’s regulators. Wirecard dismissed the FT’s reporting as lies encouraged by the company’s rivals and short-sellers — right up until June 18 this year, when it acknowledged that €1.9 billion on its balance sheet was non-existent and it collapsed into bankruptcy.

As an illustration of what makes high-quality news sources valuable amid so much online noise, it’s hard to improve on that.

Private Equity In The Covid-19 World: Hero Or Villain?

Covid-19 impacts economies across the globe

The private equity industry has long struggled to overcome a public reputation for maximising profit and jeopardising healthy businesses by loading them with unsupportable debt and charges. In light of the new world we live in, can the sector restore its image by helping to relaunch economies after the Covid-19 pandemic?

Over the past two decades the private equity sector has evolved from a marginal and mostly obscure corner of the investment industry into a core element of the financial system.

Now the Covid-19 pandemic and its aftermath poses unique challenges for private equity firms and their investors living in a world where company valuations are fluid and volatile, creditworthiness is cloudy and governments seem set to play a far more prominent role in economic management than at any time this century.

In terms of financial heft, private equity should be well placed for a leading more in economic recovery. Worldwide, the industry is flush with cash — or at least commitments.

Private equity funds have a record $2.5 trillion available in ‘dry powder,’ money pledged by investors that firms have not yet drawn down.

The environment promises to be welcoming for firms with money to spend, especially those specialising in distressed debt, of which there is plenty expected to emerge over the coming months and years, or those seeking to build industry-leading portfolio companies through bolt-on acquisitions that add scale.

Alternative to turbulent public markets

True, the market environment for private equity investment was looking less favourable before the pandemic emerged and lockdowns began. The huge pile of dry powder reflects in part an increasing shortage of suitable investment targets, which had been pushing up prices.

But private equity, along with other types of more complex and longer-term investment, looks more attractive to institutional investors than turbulent public equity markets, cash earning next to nothing in interest and bond markets yoked to the imperatives of central bank monetary easing strategies.

Not to mention the clouds gathering over that staple of institutional investment portfolios, commercial real estate.

However, private equity has its own hurdles to overcome to position itself as a saviour of struggling companies and stuttering economies.

First and foremost? A wretched public image, fuelled by both misunderstanding of what private equity is and does and by the industry’s frequent tone-deafness to wider concerns of society.

Private equity’s opaqueness, complexity and lack of public accountability is often placed in contrast with the (supposed) transparency of companies listed on public markets.

Critics such as Sheila Smith, a former senior economist at the UN Development Programme, describes the sector as “termite capitalism”, targeting a business model characterised by reliance on borrowed money rather than investors’ capital, asset stripping and job destruction, opaque fee structures, unsustainable extraction of returns through dividends funds by further borrowing and use of debt and offshore structures to reduce, often to zero, tax liabilities in the companies in which portfolio companies operate.

Investing for the long term?

In vain do private equity companies protest that their business involves not wanton extraction of assets but the creation of value through the restructuring and re-energising of struggling, directionless companies, the empowering of capable managers and the incentivisation of employees, and that they focus on companies’ long-term development, not just the next quarter’s bottom line.

Because it’s such an emotive phrase, they don’t like to speak of ‘creative destruction.’

But that’s a key driver of the private equity model: stripping away dead-end jobs and businesses and replacing them with new ones that are more productive and have a long-term future.

Some of the criticism is certainly unfair. The obsession with the offshore tax haven structures of private equity (and other alternative investment firms) tends to ignore the key classes of institutional investor that are non-taxpayers, such as university endowments and charitable organisations.

Rather than a pure creature of plutocratic vampire capitalists, the private equity industry is driven principally by the needs of their investors: pension funds to meet their commitments to retirees and insurance companies to meet policy-holder claims.

It’s against this unfavourable reputational backdrop that the private equity sector must face the challenges of the post-pandemic world.

What will it look like?

Swings and roundabouts

In the short to medium term, the industry is suffering similar hits to revenue and profit as other businesses. Antoine Drean, founder of private equity placement agency Palico and consultancy Triago, expects profit-sharing – carried interest – on above-benchmark returns to dry up, especially for firms with heavy exposure to the most vulnerable areas of the economy, such as the hospitality, travel and energy sectors.

Hugh MacArthur, Graham Elton and Brenda Rainey of consultancy Bain & Company argue that dealmaking is set for a slump while firms focus on the health of existing portfolio companies and bank lending to the sector is likely to be significantly constrained and subject to significantly tighter conditions (although this is likely to be offset by the sheer volume of dry powder and likely lower valuations of acquisition targets).

They say private lenders, a significant force in the market since the global financial crisis, should also help fill the gap while the need to exit mature portfolio companies in order to provide returns to investors will also spur deal flow.

The Bain & Co. partners also warn that some investors may find themselves financially squeezed if calls on existing capital commitments exceed private equity distributions.

This points to a reduction in fundraising, at least temporarily, after a decade of soaring inflows from investors looking to private equity’s historically higher levels of return to offset the impact of interest rates at rock-bottom or worse.

While the industry’s overall levels of return are likely to take a quick hit from lower valuations on existing investments, especially those made near the peak of the market, the recessionary environment should yield more profitable opportunities.

Private equity and Covid-19: Core role in institutional portfolios

Can we expect a better reputation for private equity in the months and years after Covid-19? There’s no guarantee that public perceptions will change radically in the near future.

Since the onset of the pandemic, the sector has drawn fire from politicians and others over the insolvency of venerable names of American retailing such as Neiman Marcus and J. Crew, although the critics tend to ignore that the businesses have been deteriorating for years in the face of changing consumer habits and growing internet competition.

However, with near-zero interest rates apparently locked in for years to come, barring an upsurge in inflation that stubbornly refused to materialise despite a decade of loose monetary policy, the core position of private equity in institutional asset portfolios seems more likely to strengthen than to diminish.

In a world where job preservation is now a central economic policy objective, private equity firms will also be under pressure to avoid wholesale layoffs and business closures.

They and their investors likely will have more skin in the game as the peaks of bank leverage of recent years recede and the days of egregious debt-driven dividend recapitalisations are probably mostly over for the foreseeable future. If private equity can claim to be playing a role in saving viable companies and jobs, it may become less of a bogeyman for critics of capitalism.

But it shouldn’t count on being better loved.







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From the 2008 Financial Crisis to Coronavirus Recession: Are the Banks Safe This Time?

It took massive public-sector bailouts financed by unprecedented levels of borrowing to reverse the global financial crisis of 2008-09 brought on by rash lending and investment policies of banks in the United States and elsewhere. With the world on the brink of a coronavirus-triggered recession, how is it different this time?

“In 2008, the banks were to blame for the crisis, but the real economy was not in crisis,” CSSF CEO Claude Marx observed recently. “Now we are in the reverse situation, where a health crisis is causing an economic crisis, and…the banks are part of the solution.”

In fact, the abrupt cutback of bank lending in 2008 and 2009 contributed to the plummet of most countries’ economies into recession.

However, Marx notes, the confidence enjoyed by the banking sector is a critical aspect of governments’ response to the current coronavirus pandemic. One reason: new rules designed to ensure that institutions are substantially better capitalised than 12 years ago, as well as guarantee schemes expanded to protect retail deposits.





Imprudent parents

Increased transparency affecting both regulators and investors, as well as tools such as stress tests, have been established to prevent both a ‘business-as-usual’ mentality and disregard of the lessons of the century’s first decade.

In the grand duchy in particular, cautious business practices are a well-engrained habit already. For that, we can credit the two Luxembourg institutions that required state rescue: Dexia BIL and Fortis Banque Luxembourg, both brought down by the imprudence of their parents abroad.

For the most part, privately-owned commercial banks have played the key role in channelling government funding into loans and guarantees to preserve businesses and jobs.

But Marx acknowledges that the risk of a recession brought on by the coronavirus cannot be ruled out altogether.

If the economic shutdown prompts widespread bankruptcies and defaults on the share of government-backed loans where the risk is retained by commercial institutions, as well as on previous lending, we may be headed again for trouble.

Because of the banks’ capital strength, and in several cases deep-pocketed shareholders, the risk of a coronavirus-based recession affecting Luxembourg is lower than in most other countries.

But policymakers worldwide must consider seriously the risk as the confidence of a rapid rebound that was widespread just months ago — remember the famous V-shaped recession and recovery? — has begun to fade.

Today, economists are illustrating the recovery with hockey stick charts more like Nike’s trademark swoosh logo.





Risk of losses

Federal Reserve chairman Jerome Powell has argued that US economic activity could contract temporarily by as much as 30% and that a full-scale recovery may be delayed until the end of 2021. He says it depends on people regaining confidence that their risk of illness is low, which in turn may rest on the widespread availability of a Covid-19 vaccine.

He expects unemployment to continue to climb for at least another couple of months before a rebound begins in the second half of this year.

Already, the Fed has warned in its semi-annual report on financial stability that US banks are at risk of material losses that could strain even their post-financial crisis capital and liquidity buffers, as well as the billions of dollars they have set aside in provisions for potential non-performing loans.

Any renewal of volatility in financial markets could create additional financial stress if asset prices fall, it adds.

There is also concern in France’s banking sector about the longer-term implications of the government’s credit guarantees. Industry members warn that a significant number of companies taking government-backed loans could be heading for a debt crunch over the next next years — perhaps as early as this summer — given that their profitability is likely to remain depressed for some lime.

Encouraged by the European Central Bank’s ultra-low interest rates, companies have been loading up on debt in the form of bank loans and bond issues for years.

“The risk is that by putting French companies that were already not in good health on life support, we could be adding a financial crisis to today’s consumption crisis, perhaps in a year, when companies are no longer able to refinance themselves and banks may be closing the credit taps,” worries Pierre-Arnoux Mayoly, a partner with law firm McDermott Will & Emery.

Apart from general concern about businesses, especially small ones, and households whose financial equilibrium may have been eroded by loss of income since March, policymakers are closely examining companies in particularly vulnerable sectors, along with those that were already heavily indebted before the pandemic took hold.

Potential problem areas that were already causing concern before the pandemic include highly-leveraged hedge funds disproportionately affected by market volatility and asset price declines.

They also may have contributed to the turbulence by having to sell assets to meet margin calls or reduce portfolio risk. A year ago 14% of US hedge funds accounted for half the industry’s net borrowing.





Leveraged but not covenanted

Red flags are also waving over so-called leveraged loans — lending to companies that were already highly indebted, typically with debt exceeding five times their earnings before interest, tax, depreciation and amortisation (ebitda).

These include a significant number of private-equity-owned companies burdened with debt from their acquisition cost or from special dividends paid to investors — paid not out of profit but additional borrowing.

Analysts say the two high-profile, private equity-owned US retailers, J. Crew and Neiman Marcus, that have filed for bankruptcy over the last two months were crippled by debt burdens — $1.7 billion and nearly $5 billion respectively — that prevented them investing to meet the challenge of e-commerce and new shopping habits.

The sector’s problems aren’t purely coronavirus-recession-related. Indeed, they have been worsened by the steady erosion over the past seven years of loan conditions imposed by banks, especially for leveraged loans and private equity-backed companies.

This trend has developed over the past decade amid rock-bottom interest rates that prompted lenders to compete for the business of more lucrative but riskier borrowers.

According to Moody’s, syndicated leveraged loan covenant quality set a decade-long low in the fourth quarter of 2019, with the majority of credit agreements permitting, for example, collateral-stripping asset transfers, the retention by owners of excess cash flow of the proceeds of asset sales, and substantial ebitda adjustments.





Easing capital rules to avoid a coronavirus downturn

Meanwhile, central banks and regulators have been accommodating with banks in the interests of keeping loans flowing into the economy, allowing institutions to draw on capital buffers introduced since the global financial crisis and to delay for a year compliance with new Basel III capital standards, measures designed to prevent a repeat of the banking sector’s problems in 2007-09.

The European Parliament is considering legislation that would ease stricter bank leverage ratio requirements due to take effect next year.

In addition to a one-year delay, the European Banking Federation also is backing an existing measure that would allow national regulators to exclude deposits held at the European Central Bank from their balance sheet total for the purposes of calculating the ratio.

Some governments want to go further. France’s finance ministry says the government-guaranteed loans issued by banks should receive the same treatment. There are even calls for the state debt on banks’ books to be excluded from leverage ratio calculations, a measure already temporarily in place in the US.

So while the banking industry may be confident right now that this time it is not the problem but the solution, a little caution is appropriate — the potential of a coronavirus recession is very real.

Neither the Covid-19 pandemic nor its economic consequences are close to being fully played out, and not even the most prescient expert can predict with assurance where all the chips are going to fall — or when.






You might also be interested in: Coronavirus’s Impact On Sustainability – What To Expect

Europe uses sustainable finance initiative to curb climate change

Europe is using its Sustainable Finance Initiative to fight climate change. But will it work? VitalBriefing Editor-in-Chief Simon Gray shares his expert insights on the matter.

With much fanfare, the new European Commission president, Ursula von der Leyen, has unveiled the continent’s “man on the Moon moment”: Europe’s Green Deal plan to to achieve carbon neutrality by 2050.

True, details of just how the EU plans to meet this challenging target will be revealed only in June. And Poland, where 80% of the electricity comes from coal, is holding back on committing to carbon neutrality until the EU earmarks more financial assistance to ease its transition.

Crucially, though, as the Trump administration sneers publicly at climate science, the EU is now formally on board for taking a global lead.

The Commission declared that to become the world’s first climate-neutral continent is “the greatest challenge and opportunity of our times”.

Its plan, announced in mid-December, includes investment in green technology, sustainable solutions and the creation of new businesses, acting as a catalyst for economic growth through a transition that’s “just and socially fair …[and] designed … to leave no individual or region behind”.

Immediate impact

Arguably, though, a less high-profile decision earlier that month may have a more immediate impact on carbon emissions and the environment.

On December 5, EU finance ministers and representatives of the European Parliament reached agreement in principle on the “taxonomy” of the Commission’s sustainable finance initiative: a common set of rules governing how to determine which activities can and cannot be counted as green investments.

The finance ministers’ accord still must be formally endorsed by EU leaders. But the road now appears clear for the full sustainable finance package to become EU law – and it could start influencing corporate behaviour in Europe and beyond well before the European Green Deal takes effect.

The Commission’s initiative features three elements, two of which were endorsed last year by the European Parliament and member states.

The first would require institutional investors and asset managers to reveal how they integrate — or fail to integrate — environmental, social and governance criteria into their risk management processes.

Green benchmarks

A second measure would amend the EU Benchmark Regulation by creating  a new category of standards comprising low-carbon and positive carbon impact measures to provide investors with better information on the carbon footprint of their investments.

The Commission also has proposed changes to subsidiary legislation to MiFID II and the Insurance Distribution Directive that would incorporate ESG criteria into the advice that investment firms and insurance distributors must offer individual clients.

But taxonomy has always been the most critical element. The biggest issue in sustainable or green finance is how exactly it’s defined. Critics argue credibly that the lack of standard definitions has led to an epidemic of ‘greenwashing’ – investment firms and other businesses spouting green principles without adopting meaningful changes to their energy use, carbon emission or waste practices.

Universal classification

The proposed taxonomy regulation would set the conditions and framework for a unified classification system that defines an environmentally-sustainable economic activity.

But it hasn’t been without dispute and controversy — which explains the delay in approval from EU member states.

Most notably, France sought to have nuclear power deemed a low-carbon source of energy. But Paris appears to have admitted defeat in the face of vehement opposition from Austria, Germany, Luxembourg and the European Parliament.

However, the finance ministers agreed to a “do no harm” provision expected to exclude nuclear power when detailed rules are drafted.

The deal would create three categories for sustainable investments: “green”, “enabling” and “transition”, obliging companies with more than 500 employees to reveal the extent to which their activities fit these categories.

Cost of capital

How will all this affect businesses? By intensifying pressure on fund managers and institutional investors such as insurance companies and pension funds to focus their investments on companies that meet the Commission’s criteria — and to withhold their money from businesses that can’t or won’t do so.

So, expect the cost of capital for fossil fuel-oriented companies to rise, affecting their profitably and undermining their ability to compete with rivals that embrace renewable energy.

Yes, there’s already plenty of activity in the green investment sphere. But the lack of common standards has proved a major drawback. With the possibility that EU standards become widely adopted around the world, the Commission’s taxonomy could become the gold standard that, at last, vaults the green economy to global acceptance.


















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How the EU’s green finance ambitions could revolutionise fund management

The European Commission will soon launch ambitious plans that would position the EU as a global leader in the reduction of carbon emissions and the transition to a more sustainable economy that can contribute to curbing climate change. On behalf of our client, KNEIP, VitalBriefing looks at how Europe’s green finance goals could be a gamechanger for the fund management industry.

Click here to read How the EU’s green finance ambitions could revolutionise fund management.

 

Monetary and Fiscal Policy Divide North and South Europe

VitalBriefing Editor-in-Chief Simon Gray discusses the worrying current state of monetary and fiscal policy in Europe.

Countries in the north and south of the continent are divided in opinion as to what they believe the role of monetary policy should be in stimulating the economy. Moreover, consensus cannot be reached regarding the fiscal rules governing participation in the euro, Europe’s single currency.

With both sides of the debate entrenched in their positions, US banks have been able to dominate global finance and even steal investment banking business from their European counterparts.

With the global economy facing a possible recession, how will Europe solve this inter-continental discord?

Read the full article on Toolbox.com.

Tackling cyber crime: Shared threat needs shared response

Cyber security has become a major worry for the banking sector. The digital nature of business has been accompanied by evolving risk dynamics that call for constant reassessment. Meanwhile, it’s easier for cyber criminals to mount attacks, endangering individuals and organisations of all kinds and sizes.

Due to the complexity of this segment, financial institutions must take measures necessary to protect themselves and their clients. ING, a client of VitalBriefing, has been laser-focused on the threat. To show its valued customers just how seriously it takestheir cybersecurity, the bank asked VitalBriefing to create a suite of articles on the subject. Click here to read one of them: Tackling cyber crime – A shared threat needs a shared response.

https://www.ingwb.com/themes/cyber-security-articles/tackling-cybercrime-a-shared-threat-needs-a-shared-response

What in the world is a Circular Economy?

The meaning of the circular economy 
For the past decade, the expression ‘circular economy’ – with its promise to generate a more sustainable, equitable and just world – has steadily gained international traction. It actually represents an alternative to an ill-managed, extraction-based global economy generating unprecedented changes in the global climate and depleting the world’s natural resources.

Circular economy is relevant to every element of society, culture and economy. Yet, what does it really mean? What are its implications? How profound is its implementation for your organisation – and personal way of life?

Consider this: A recent study compiled and compared 114 definitions of circular economy in order to provide the first quantitative interpretation. The conclusion: Circular economy “means many different things to different people.”

We have the good fortune to cover the issue for our clients, so before you become discouraged or overwhelmed, we can help with some answers.

Comparing circular and linear economy showing product life cycle. Natural resources are taken to manufacturing. After usage product is recycled or dumped. Waste recycling management concept.

 

The meaning of the circular economy 
For the past decade, the expression ‘circular economy’ – with its promise to generate a more sustainable, equitable and just world – has steadily gained international traction. It actually represents an alternative to an ill-managed, extraction-based global economy generating unprecedented changes in the global climate and depleting the world’s natural resources.

Circular economy is relevant to every element of society, culture and economy. Yet, what does it really mean? What are its implications? How profound is its implementation for your organisation – and personal way of life?

Consider this: A recent study compiled and compared 114 definitions of circular economy in order to provide the first quantitative interpretation. The conclusion: Circular economy “means many different things to different people.”

We have the good fortune to cover the issue for our clients, so before you become discouraged or overwhelmed, we can help with some answers.

 

What is the circular economy?
Briefly, the circular economy is “a regenerative economic model.” Its purpose is to examine complex human behaviour and provide insights into a better allocation of resources. It’s holistic, taking into account the energy and materials we use, the ecological limits of our environment, and most important, people’s well-being.

In short, the circular economy seeks to create a system to meet our current needs while respecting the limits of our planet’s resources.

How does the circular economy function?
In this “regenerative system,” consumers and producers work together with policymakers at every level to generate environmental quality, economic prosperity and social equity. How does that happen? With an economic model that aims to retain as much value of products and materials as possible.

To get there involves refurbishing, remanufacturing, best re-use and recycling of the products and materials the world uses. The goal is a world without end-of-life of products and materials, reducing the generation of waste to its absolute minimum.

What does a circular economy strategy look like? We’re glad you asked:

– Waste virtually doesn’t exist. Products are designed to be disassembled and reused or, failing that, recycled. Long-lasting design ensures reduced energy use.
– Products components are categorised either as consumable (returned safely to the biosphere) or durable (designed for reuse and/or recycling).
– The energy required to power industry is renewable.

When is the circular economy arriving? 
It’s already here, permeating all sectors of the economy (which is why we at VitalBriefing cover it for our clients). You can find it in the products you consume, from cheese to smartphone, from clothing to the materials used to build your house.

The circular economy goes beyond strategies for reducing, re-using and recycling. It’s about generating an industrial ecosystem where these and many other strategies infuse every stage of products and services. Every day, we find a new company going circular, reducing the waste from its production, and collaborating with other circular-minded companies to create a healthy environment for their business and the world.

A few examples:

Luxembourg’s ArcelorMittal recognised for circular economy initiatives
ArcelorMittal has been recognised by the World Economic Forum for its ambitious circular economy efforts. The global steel group’s initiatives include paving more than 400 miles of Brazilian roadway with a product consisting mainly of waste steel slag, manufacturing a profitable low-carbon cement also from waste slag and pioneering steel re-use in structures. It has been producing steel in Luxembourg from scrap waste rather than primary raw materials for a quarter-century.

New businesses exploit massive seafood waste 
With about 40% of all seafood going to waste in an industry that has grown enormously over the past 50 years, new companies are starting to exploit seafood waste by-products in unusual ways. Ideas include applying fish skins as a treatment for burns, using fish scales in solar panel cells, and making salmon jerky from discarded fish meat.

IKEA trialing furniture rental and resale schemes 
Having won awards for its efforts to promote circular economy systems, Scandinavian flat-pack furniture giant Ikea is testing rental and buyback schemes in different parts of the world to cut down on waste. In Belgium, customers can re-sell, repair, or return their furniture, while in France and Japan, furniture can be returned to be sold in the store again.

To follow the circular economy more closely, or to have us help you follow the aspects that matter most to you, please contact: clientservice@vitalbriefing.com