Hello,
Finance bros at Wall Street are excited about a new trend: ‘transition finance’.
The term describes allocating capital to activities that will ultimately help cut carbon emissions in the wider economy. Investors also find corporate decarbonisation very lucrative as it presents a $50 trillion investment opportunity, according to some estimates.
However, while big banks are in on the game, JPMorgan feels that green assets are now defined more narrowly and diverting investments into limited economic activities “downplays the fundamentals of financial logic”.
Climate financing has been a topic of tense debate, as witnessed in the kerfuffle at the COP29 climate summit where many developing countries, including India, felt they were shortchanged by their wealthier counterparts. But one country offers a model roadmap: New Zealand.
The Kiwis instituted the Aotearoa Circle in 2019, which brings leaders from the public and private sectors together to participate in a forum to focus on sustainable finance as well as broader environmental objectives. The country prides itself in integrating Indigenous values into environmental governance.
As an employee, experts think you can do one specific thing to lower your carbon footprint: work from home.
A Cornell University and Microsoft study published earlier this year found that switching from working on-site to working remotely five days a week led to a 54% reduction in a worker’s employment-related carbon footprint.
The Kerala government’s Work Near Home initiative, announced recently, can also achieve similar results. By offering state-of-the-art workspaces in smaller towns, this project aims to bridge the gap between urban and rural areas.
In other news, look and feel matter, even if the product is chocolate. A UK man received £2 compensation and an apology after he found a “smooth” Mars chocolate bar without its signature swirl.
Now isn’t he a … smooth operator?
In today’s newsletter, we will talk about
- Is AI a job killer? Companies think not.
- Will profits always evade quick commerce?
Here’s your trivia for today: What is the name of a digital asset that can represent a share of a company?
In-depth
Is AI a job killer? Companies think not.
With the advent of many AI applications, humans feared losing their jobs as companies started implementing the technology to streamline their tasks. However, that’s not the case entirely.
Companies are hiring for roles that didn’t exist before—AI trainers, ethical AI architects, and Chief AI Officers at the C-suite level—which require new skills and pay a premium salary compared to a normal tech job.
Friend, not foe:
- Milind Shah, Managing Director of Randstad Digital India, says the net impact of AI on employment will likely be a shift in job roles with more emphasis on high-skill positions, including data scientists, AI engineers, and AI product managers, necessitating significant reskilling efforts.
- Jaideep Kewalramani, COO and Head of Employability Business of TeamLease Edtech, believes the demand for AI professionals will increase exponentially over the next five years, depending on the job role. “It will be primarily driven by the fact that AI will become all pervasive across industries and roles.”
- Charu Malhotra, Co-founder and Managing Director of Primus Partners, predicts salary premiums will continue to rise as companies seek specialised talent. “Positions like AI engineers, ML specialists, and data scientists often earn a premium with salaries 20-40% higher than traditional software developers or IT professionals.”
Quick Commerce
Will profits always evade quick commerce?
Once quick commerce companies like Zomato’s Blinkit, Zepto, and Swiggy’s Instamart have direct control over the inventory by owning the products sold to customers, profits are likely to take a hit, believes Deepak Shenoy, Founder and CEO of portfolio management service firm, Capitalmind.
“The profits you see in a Blinkit … is primarily because inventory costs are not being accounted for meaningfully in the parent organisations because they are not allowed to own the inventory,” said Shenoy, sharing his insights with YourStory’s Founder and CEO, Shradha Sharma.
Emerging sector:
- “You over-order something and you under-order something else, you will have inventory holding costs. This is not visible on Zomato’s balance sheet because they don’t officially own any of these entities,” said Shenoy.
- Both Blinkit and Swiggy Instamart have separate entities operating their dark stores and owning the inventory, whereas Zepto operates under a licensed or franchise model.
- “I think long-term quick commerce will have a lot of functionalities, but the problem that comes with it is that once you go beyond the eggs, meats and rice- you move from fast-moving consumer goods to slow-moving consumer goods,” he said.
News & updates
- Musk v Altman: Elon Musk is asking a US federal court to stop OpenAI from converting into a fully for-profit business. Attorneys representing Musk, his AI startup xAI, and former OpenAI board member Shivon Zilis, filed for a preliminary injunction against OpenAI. It would also stop OpenAI from allegedly requiring its investors to refrain from funding competitors.
- Back to work: BT (formerly British Telecom) is mandating a return to the office three days a week from January as chief executive Allison Kirkby continues her attempts to turn around the UK telecoms group. She said its existing “three together, two wherever” hybrid working guidance would become policy that office-based staff would be “accountable for following”.
- Big sale: Online retail continued to be the big winner of the holiday season on Black Friday, with record levels of ecommerce spending in US. In-person shopping, however, was down 8%, according to both Adobe Analytics and Salesforce.
What you should watch out for
- Monetary policy: The RBI’s monetary policy committee will meet on December 6 to decide on the repo rate. The central bank is now under pressure to cut rates as the economy grew at the slowest pace in almost two years in the recent quarter. The GDP growth for Q2 FY25 slowed to 5.4% year-on-year, down from 6.7% in Q1. However, an HDFC Bank report stated that the RBI would keep the repo rate steady at 6.5%.
- Stock movement: Sensex and Nifty ended the last week of November 1% higher amid easing geopolitical tensions and favourable election results. However, after the underwhelming Q2 FY25, the Indian stock market is expected to react in a range-bound on Monday. The markets will also be influenced by monthly auto sales figures, to be released on Monday and are expected to reflect the festive sales bump. Their sway will also depend on FII inflows, global cues, and macro data points.
What is the name of a digital asset that can represent a share of a company?
Answer: Crypto security token.
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