THE BIG READ: RULES OF ENGAGEMENT
China has emerged as the second global superpower under the leadership of President Xi Jinping
(AaaS) offerings. The starting point for AaaS was the behaviour of a rising class of consumer that places less value on owning a car, a holiday home or another product. These consumers prefer to use the asset (and pay for it accordingly) only when they need it. Due to its obvious advantages, this calculation is now spreading in industry as well. If, for example, a company no longer has to buy printers for offices or forklifts for warehouses, but pays for the use of these items, it converts fixed capital expenditure into variable expenditure for business operations. For the providers of these AaaS models, there are a variety of implications; for example, with regard to data management, financing structures, logistics and payment processing.
ESG frameworks A final overarching trend that is becoming increasingly relevant for business is sustainability. This is often described using the abbreviation ESG, i.e. sustainable business under the criteria of environment
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(environmental protection), social (socio- politically responsible business) and governance (sustainable and transparent corporate management and supervision). The way in which these criteria are dealt with increasingly determines which companies get access to equity and debt capital and on what conditions. It is now standard practice for most major international capital-gathering institutions to analyse and evaluate a company’s ESG performance before making investment decisions. According to estimates by Deutsche Bank Research, by 2030 around 95% of all investment money managed worldwide will be invested with the help of ESG criteria.1
develop a sustainability strategy and establish active stakeholder management if they want to attract capital flows.
Banks are challenged by these global trends in a variety of ways. On the one hand, they must adapt to these developments, and on the other hand, the regulatory
environment continues to tighten. They must therefore adjust accordingly. More importantly, they have to create financial services for the new economic world and at the same time enable companies to finance comprehensive transformation and restructuring programmes.
Companies must therefore
Obviously, the free market should determine success and failure in competition. In order for the better ideas and the better management to win the competition, global equality of opportunity must be ensured. But are the framework conditions actually fair, or to the detriment of European companies? In what ways can European banks help to compensate for competitive disadvantages?
The framework conditions for financing in Europe differ considerably from those in the US or China.2
The US, for example, has the
advantage of a much broader and deeper capital market through which companies can comparatively easily obtain venture
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