October 2016

The world-famous French climate veteran did not travel, but still visited Hungary

Paul Watkinson, a world-famous climate change negotiator, held an unconventional and carbon-neutral live Skype presentation at the BCSDH Business Breakfast about the tasks and business opportunities which have emerged following the entry into force of the Paris Climate Agreement.

Paul Watkinson, Head of the Climate Negotiation team at the French Ministry of Environment, Energy and the Sea and the French Chief Climate Negotiator held a successful video presentation at the Business Breakfast organised for CEOs by the Business Council for Sustainable Development in Hungary. The BCSDH currently has more than 70 corporate members that contribute 30% of Hungary’s GDP, and this year ‘Climate Change’ is the main topic of the BCSDH Action 2020 Hungary program. On this occasion the climate negotiator was invited by the BCSDH and the Embassy of France.

Followed by the opening speech of Mr. Eric Fournier, French Ambassador to Hungary, Paul Watkinson talked about the ratification of the Climate Agreement which has occurred at a faster pace than predicted, thereby influencing the current agenda. As early as in Marrakesh at the COP22 negotiations in November, the topic of how the agreement will be reflected in the concrete measures of certain countries, including EU member states, should be discussed: “Ambitious goals require decisive steps that have real impacts” – is how the most important goal for the upcoming period was summarised by the climate negotiator.

Paul Watkinson warned participants of the meeting that by the second half of the century we must become carbon neutral. This will not be an easy task, and everyone will play a significant role in it. One of the most important tools for making this change may be the introduction of carbon pricing. Even though a unified system is still under development, there are countries in which the implementation of carbon pricing is officially ongoing. In November, France might adopt a law aimed at defining a minimum price for carbon emissions at the rate of 30 Euro/tonne. The widespread introduction of this system could extensively impact the economic balance of power.

“One of the outcomes of the Paris Climate Agreement is that national action plans will become visible and transparent, which will accelerate processes” –Watkinson highlighted. However, he added that close cooperation between governments and actors from the business sector will be crucially important in this development.

The business sector’s biggest challenge is to integrate medium and long-term considerations into businesses that operate in an ever-changing market environment and which are currently driven by strategies and decisions based on short-term market interests.

This will be achieved only if companies perceive these changes as advantages, and they are willing to transform their existing practices to meet these requirements.

Paul Watkinson closed his unconventional presentation by stating that “Defining the flow of investments and finances in accordance with their effects on climate change should be a major consideration”.

“The Paris Climate Agreement will come into force soon. BCSDH has an important mission supporting its members to become not only followers but also active leaders of future changes and global trends. Today’s event is designed to help us in this goal.” – explained Attila Chikán Jr., President of the BCSDH.

The BCSDH’s Action 2020 Hungary program is a tool for this purpose: to help with the discovery and promotion of good business solutions that go beyond business-as-usual and which can be disseminated amongst a wide range of business actors. Close to 50 companies have already joined the program.

The gallery of the event you can find here.

14.10.2016

Our new member: K&H Bank

Member News

We at K&H, as a leading financial institution see it as our duty to play an active role in society, besides assisting our clients in making smart financial decisions. We want to build trust at K&H – not only through our financial results but also by living up to the expectations of our clients, employees, shareholders, and society in general. We wish to strengthen our role in society particularly through stimulating entrepreneurship, improving financial literacy, environmental responsibility, and the health of the population. As before, we aim to consolidate our market position and role in Hungary with the environment and the local community in mind. We strive to act as an accountable company and to behave in an ethical and transparent way.

12.10.2016

Ministers approve EU ratification of Paris Agreement

News

In a historic move, EU ministers approved the ratification of the Paris Agreement by the European Union. The decision was reached at an extraordinary meeting of the Environment Council in Brussels. This decision brings the Paris Agreement very close to entering into force.

Once approved by the European Parliament next week, the EU will be able to deposit its ratification instrument before national ratification processes are completed in each Member State.

European Commission President Jean-Claude Juncker said: “Today’s decision shows that the European Union delivers on promises made. It demonstrates that the Member States can find common ground when it is clear that acting together, as part of the European Union, their impact is bigger than the mere sum of its parts. I am happy to see that today the Member States decided to make history together and bring closer the entry into force of the first ever universally binding climate change agreement. We must and we can hand over to future generations a world that is more stable, a healthier planet, fairer societies and more prosperous economies. This is not a dream. This is a reality and it is within our reach. Today we are closer to it.”

EU Commissioner for Climate Action and Energy Miguel Arias Cañete said: “They said Europe is too complicated to agree quickly. They said we had too many hoops to jump through. They said we were all talk. Today’s decision shows what Europe is all about: unity and solidarity as Member States take a European approach, just as we did in Paris. We are reaching a critical period for decisive climate action. And when the going gets tough, Europe gets going.”

So far, 61 countries, accounting for almost 48% of global emissions have ratified the deal. The Agreement will enter into force 30 days after at least 55 countries, representing at least 55% of global emissions have ratified.

The EU, which played a decisive role in the adoption of the Paris Agreement last December, is a global leader on climate action. The European Commission has already brought forward the main legislative proposals to deliver on the EU’s commitment to reduce emissions in the European Union by at least 40% by 2030.

Next steps

Today’s approval will be forwarded to the European Parliament for its formal consent next week. Once Parliament has consented, the Council can formally adopt the Decision.

10.10.2016

India ratifies Paris climate agreement

News

India, one of the world’s largest greenhouse gas emitters, has ratified the Paris global climate agreement.

Under the deal, India has committed to ensuring that at least 40% of its electricity will be generated from non-fossil sources by 2030.

CO2 emissions are believed to be the driving force behind climate change.

Last December in Paris, countries agreed to cut emissions in a bid to keep the global average rise in temperatures below 2C.

The Paris deal is the world’s first comprehensive climate agreement.

It will only come into force legally after it is ratified by at least 55 countries which between them produce at least 55% of global carbon emissions.

Prime Minister Narendra Modi announced last month that India would ratify the agreement on 2 October, the birthday of Mahatma Gandhi, the leader of the struggle for independence from Britain.

“India has deposited its instrument of ratification of the Paris Agreement with the United Nations,” the UN said in a statement on Sunday.

The US and China – together responsible for 40% of the world’s carbon emissions – both formally joined the Paris global climate agreement earlier this month.

India accounts for about 4.5% of global greenhouse gas emissions, and became the 62nd country to ratify the agreement.

The European Union is expected to do so in the near future, taking approvals past the 55% of emissions threshold.

Paris agreement: Key points

To keep global temperature increase “well below” 2C and to pursue efforts to limit it to 1.5C
To peak greenhouse gas emissions as soon as possible and achieve a balance between sources and sinks of greenhouse gases in the second half of this century
To review progress every five years
$100bn a year in climate finance for developing countries by 2020, with a commitment to further finance in the future
Once the deal comes into force, countries that have ratified it have to wait for a minimum of three years before they exit

Source: BBC News

10.10.2016

ING strategy update: Accelerating Think Forward

Member News

Investment of EUR 800 million in continued digital transformation in order to further improve customer experience, accelerate growth in primary customers and lending
Programmes to also lead to approximately EUR 900 million annual cost savings by 2021; intended initiatives impact around 7,000 employees, mostly in Belgium and the Netherlands

‘Accelerating Think Forward’ is the theme of the strategy update that CEO Ralph Hamers and other executives presented on 3rd of October 2016 at the ING Group Investor Day in Amsterdam, the Netherlands. To accelerate the Think Forward strategy, ING will introduce a number of initiatives to further improve the customer experience, further grow primary customers and lending, and increase efficiency.

“Since launching Think Forward in 2014, we have made excellent progress on many fronts,” said Ralph Hamers, CEO of ING. “We attracted over three million new customers, supported the economy by growing lending by around EUR 56 billion and strengthened our capital. We did that by focusing on being clear and easy, anytime, anywhere, and empowering customers to stay a step ahead in life and in business. We also promised to keep getting better and that is exactly what today’s steps are aimed at. Our recent successes allow us to do so from a position of strength.”

“Customers are increasingly digital and bank with us more and more through mobile devices. Their needs and expectations are the same, all over the world, and they expect us to adopt new technology as fast as companies in other sectors. In order to continue to lead in digital banking, we need to offer a better customer experience, that’s instant, personal, frictionless and relevant. At the same time, banks are confronted with continuous regulatory burden and a prolonged period of ultra-low interest rates. These factors put pressure on the returns which are necessary to fund growth and investments, and cover our cost of capital.”

“In that context, we intend to start a path of convergence towards one digital banking platform. Countries with similar value propositions intend to harmonise their business models and develop shared operating platforms. Infrastructure, data and support functions are intended to be standardised across countries and business lines. From 2016 to 2021 we intend to invest EUR 800 million in our digital transformation, building a scalable platform to cater for continued commercial growth, an improved customer experience and a quicker delivery of new products. This would allow us to continue our success in growing our client franchise and diversify our income. Through improved efficiency, the Accelerating Think Forward programme is expected to deliver approximately EUR 900 million of annual cost savings by 2021.”

“In the Netherlands and Belgium, we intend to improve our customer experience by moving to an integrated banking platform, leveraging the combined strengths of the omnichannel capabilities of the Netherlands with the relationship model and advice capabilities of Belgium. The intended combination would leverage scale advantages of our 11 million customer base, having one value proposition, one strategy, one set of systems, one culture and one organization – but with two legal entities and two balance sheets.”

“ING Belgium intends to transform to an omnichannel banking environment. The intention is to rationalise the network by integrating ING and Record Bank branches. At the same time, in the Netherlands, we will further optimise a number of business and support functions. The intended programme would draw on the experience gained from successful similar large-scale IT projects in the Netherlands and its adoption of the agile way of working.”

“In our Challenger Markets, we will work towards a Model Bank, with one retail strategy and a harmonised retail proposition, fully focused on increasing customer interaction. Aimed at further customer and volume growth, we will deliver a scalable business platform, initially for Spain, Italy, France, Czech Republic and Austria. The platform can be extended to additional countries, products and services. An agile, central IT services centre will develop, maintain and run all needed digital requirements. In Germany we will enhance our digital banking platform, introducing an omnichannel approach and investing in scalability to provide room for business growth and improve operational efficiency.”

“In Wholesale Banking we intend to extend our Target Operating Model (TOM) programme, further driving simplification, business growth and innovation. We intend to continue to digitalise our client offering through InsideBusiness across geographies, products and devices. Process improvement initiatives would enable us to decommission legacy IT systems, while global service centres would increasingly provide services directly to clients. Our global support functions including IT, Risk, Finance and HR also intend to roll out TOM-programmes, streamlining and standardising to enable further convergence of our operations.”

“It is inevitable that the various measures and intentions announced today may have a significant impact on many of our colleagues. It means some functions will change significantly in nature. It might mean that the location of functions will change. And it might mean that positions will no longer be there in the future. All-in-all, over the coming five years, around 7,000 functions might be impacted by these effects, including 950 positions employed by external suppliers.”

“While not all plans we present today are finalized, the intended initiatives are expected to result in a reduction of ING´s workforce in Belgium by around 3,500 FTEs and by around 2,300 FTEs in the Netherlands for the years 2016-2021. These numbers include the intended move to an integrated banking platform, with the remainder of functions affected spread over intended programmes in IT, operations, Wholesale Banking and various business support functions. At the same time, we will add colleagues in parts of our business where we expect to accelerate growth given our plans to continue to attract new customers and increase lending to support the economies we are active in.”

“Regrettably, the steps and intentions announced today would mean that a significant number of colleagues would have to leave ING. Because of the work we have done in recent years, we are able to take these intended measures from a position of strength. This enables us to do our utmost to build on our track record of helping colleagues who are affected to find new job opportunities. For the intended workforce reductions, a pre-tax redundancy provision of around EUR 1.1 billion is expected to be booked, of which EUR 1.0 billion in the fourth quarter of 2016.”

“In line with our strategy, we will be introducing ING Group financial targets for 2020. We will maintain our ING Group CET1 ratio above the prevailing fully-loaded requirement, currently 12.5%, with a leverage ratio above 4%. Our target for the cost/income ratio is 50-52%. In light of the continuing regulatory uncertainty, we are not updating our RoE target (currently 10-13% of ING Bank IFRS-EU equity), but we reiterate our intention to pay a progressive dividend over time.”

Further details of the various programmes will become available in the coming months. Wherever there is an impact on the workforce, all intended measures will be made in accordance with local regulations and will be discussed with the respective stakeholders.

Source: www.ing.com

05.10.2016