Delivering the keynote address, British Ambassador to Finland, H.E. Theresa Bubbear, emphasised the vital role of the collaboration between the UK and Finland in advancing sustainable development goals. In this context, Bubbear reflected on the new Strategic Partnership Agreement between the two countries, signed on 20 May, which signifies a deepening of cooperation across various global issues, including:

• Environment and Climate Change: The agreement positions the UK and Finland as strong partners in tackling climate change and achieving shared environmental goals. Collaboration on areas like clean energy technologies and green finance could be instrumental in driving a sustainable future.
• Economic Cooperation: The partnership aims to strengthen economic ties between the UK and Finland. This could involve fostering trade partnerships, facilitating investments, and collaborating on innovation initiatives.
• Global and Multilateral Issues: The agreement emphasises cooperation on a broader range of global challenges, including security, defence, and migration. 

With upcoming elections in the UK and in the US, NatWest’s Senior Strategist, Imogen Bachra, presented a comprehensive macroeconomic update providing insights into the potential market impacts and geopolitical trends surrounding the two elections:

US Election

• Even if Biden retains the presidency, the races for the House and the Senate are also important as their outcome influences whether the President can implement his plans. It seems that the Republicans hold a clear advantage in the Senate vote. The Democrats currently have a slim majority, with 51 against 49 Republicans, so it wouldn’t take much of a swing for the Republicans to turn that around. As things stand, NatWest believe that’s the likeliest outcome. Meanwhile, the race for the House of Representatives looks to be a toss-up. Regardless of the presidential outcome, a Republican Senate flip would mean there would be no Democratic sweep, making it a challenge when it comes to passing major legislation.
• As ever, the state of the economy is likely to be a major factor in voting decisions: in a poll by NRP, 65% of respondents stated that inflation is “a very big problem” in the US. This represents a clear risk for President Biden as the incumbent generally receives the blame for any economic problems. While NatWest expects inflation to fall further in 2024, any economic slowdown – including due to the lagged impact of Fed rate hikes – is likely to worry the President.

UK Election

• With a possible 70+-seat majority in Parliament, Labour would have a secure base from which to carry out its plans – meaning continuity in macroeconomic policy (fiscal rules and processes, monetary policy) but some ambiguity on the micro side (sectoral regulation, labour market).
• Economically, the defining feature of the next parliament will be the tight inheritance on the public finances and the prospect of a multi-year fiscal consolidation if a Labour government is to meet the rule to lower debt in five years’ time. Delivering this will not be easy politically and is potentially sensitive to the size of the Government’s majority.
• Markets can expect a new government to deliver a full Budget in the autumn. There are some nuanced differences on Labour’s fiscal rules – which would allow higher borrowing for investment (the Conservatives’ rules cap overall borrowing). That may hint at slightly higher borrowing. Whether that approach would be justified hinges on how effectively any such borrowing for investment is deployed.

An ESG fireside chat – moderated by Caroline Haas, NatWest’s Head of Climate and ESG Capital Markets and joined by ESG specialists Antti Kontio, Head of Funding and Sustainability at MuniFin, and Salla Sulasuo, Head of Sustainable Transformation at Paulig Group – provided food for thought with an in-depth discussion about practical corporate ESG strategies and how Finnish companies are navigating the path towards a more sustainable future. The three speakers highlighted:

• Finnish companies are actively working on reducing their carbon footprints through various initiatives such as investing in renewable energy sources, enhancing energy efficiency, and adopting circular economy principles. According to Statistics Finland, greenhouse gas emissions decreased by 9% in 2022 compared to the previous year, highlighting the impact of these initiatives. At the same time, the carbon reduction measures create new business opportunities. This has also led to a 50% increase in investments in green bonds in Finland in the past year.

• Finnish companies prioritise transparency and accountability in their ESG efforts. Regular reporting on sustainability performance, setting clear targets, and engaging stakeholders are common practices. According to the Global Reporting Initiative (GRI), over 75% of large Finnish companies publish sustainability reports. As a consequence, Finland ranks #4 in the world in the Energy Transition Index 2023, a yearly report produced by the World Economic Forum.

• Driven by the government, Finnish companies had the opportunity to engage early with collaborative projects that leverage cutting-edge technologies and innovative solutions to address environmental challenges. One example is the Smart Energy Finland Program, which catalysed and funded energy-related ecosystems and testbeds in Finland and abroad, which ran from 2017 to 2021.

• Beyond environmental initiatives, Finnish companies also focus on social aspects of ESG. The Finnish Corporate Responsibility Network (FIBS) reported that 90% of Finnish companies have implemented policies to promote diversity and inclusion in the workplace, highlighting the comprehensive approach to sustainability.

Key contacts for continued discussions

To discuss ESG topics that are relevant to you, please reach out to:

• Caroline Haas – Head of Climate & ESG Capital Markets NWM Plc.
• Martin Arnborg – MD Nordics, NWM N.V.
• Olivier Werenne – Head of eFX Sales EMEA and APAC Head of eFI Sales Continental Europe NWM N.V.