In today’s rapidly evolving market, investors need to stay on top of the latest trends and themes that fuel growth. In this monthly publication, we offer our market commentary across our themes, covering new opportunities and potential challenges. By providing a deeper understanding of our themes, we aim to help you make more informed investment decisions and achieve your investment goals.
Battery recycling, especially in the EV sector, is proving to be not only environmentally beneficial but also economically viable. Companies like Redwood Materials, founded by Tesla’s former CTO J.B. Straubel, are leading the way in demonstrating its financial feasibility. Redwood has developed processes that enable them to recycle 95% of battery minerals, which substantially reduces the reliance on new material mining. This is crucial as it cuts down the economic costs associated with raw material extraction and processing. The company’s approach has proven to significantly lower CO2 emissions by 40-70% compared to traditional recycling. By recycling batteries on a large scale, it has set a precedent for reducing the U.S.’s dependency on international battery supply chains dominated by China. With the company’s capacity to support the production of a quarter-million EVs annually and plans to expand this capacity, they exemplify how recycling practice can support growing market demand for EVs in an economical way. Another standout example is Umicore which have demonstrated the economic and environmental potential of battery recycling. Umicore’s advanced materials technology, for example, plays a crucial role in recycling precious metals from used cathodes, helping to reduce the demand for virgin materials. These companies exemplify the potential to unlock substantial economic value from resources in use.1
Could fossil fuel subsidies fight the energy transition? In 2022, fossil fuel subsidies reached $7 trillion worldwide– a staggering sum that has risen from $5 trillion in 2020 due to government support amid surging energy prices. New research shows that eliminating these subsidies could cut global CO2 emissions by 43% below expected levels by 2030, aligning with the goals of the Paris Agreement. Furthermore, reforming subsidies could yield $4.4 trillion, or 3.6% of global GDP, by 2030. Despite the political challenges, implementing a plan with defined goals, engaging stakeholders, introducing gradual price increases, providing targeted aid to low-income families and maintaining neutral energy pricing can enable countries to effectively reallocate these resources. The money saved from ending fossil fuel subsidies is likely to be more than enough for the energy transition. Estimates for the annual investment needed by 2030 range from $4 trillion (IEA) to $9 trillion (Climate Policy Institute), but we think the actual figure could be lower due to rapidly falling prices and learning rates. Progress is ongoing, but governments must ensure that their industrial policy pledges do not merely serve as rhetorical smokescreens for protectionism. Global cooperation and coordination are essential to address climate change, not geopolitical finger-pointing.2,3,4
A new report by PwC emphasised the critical need for sustainable infrastructure that is both financially viable but also adaptable to meet escalating urbanisation and environmental challenges. It is estimated that by 2050, 68% of the global population will reside in urban areas, necessitating infrastructure that minimises environmental impact while supporting growth. These are not mutually exclusive goals. One approach involves flexible design which is essential for sustainable infrastructure, particularly in the energy sector. Crucially, this enables strategic adaptability over traditional fixed designs, which often result in excessive costs due to the inflexibility of expanding or modifying infrastructure. For example, consider high-voltage direct current (HVDC) lines, where flexibility in design could potentially generate significant financial returns and environmental benefits by solving or both capacity and adaptability throughout the lifecycle of the infrastructure. This approach not only meets immediate demands but also accommodates future uncertainties such as economic shifts and technological advancements, thus supporting a sustainable and resilient urban future.5,6
FMC, a leading agricultural science company and AgroSpheres, a biotech company specialising in sustainable crop protection, have partnered to develop new bioinsecticides. This marriage brings together two companies with significant expertise in promoting more sustainable food production. FMC brings its experience in high throughput testing, evaluation, and commercialisation of crop protection products. Meanwhile, AgroSpheres contributes its innovative technology for producing and formulating bioinsecticides based on RNA interference (RNAi). RNAi has the potential to be a powerful tool for future crop protection. For one, it can promote effective and targeted pest control. Successful development of RNAi bioinsecticides could provide farmers with new tools to combat pests, potentially leading to higher crop yields and reduced reliance on traditional chemical insecticides. RNAi technology also offers a more targeted approach to pest control compared to some traditional insecticides. This could reduce the impact of pesticides on the environment and human health. This partnership marks a major step in promoting sustainable agriculture through innovation.7
So far in 2024, the cybersecurity sector has been marked by several compelling developments. A significant incident was the Bank of America data breach, where sensitive customer data was exposed due to a breach at Infosys McCamish Systems. This event has highlighted the complex vulnerabilities within the interconnected ecosystems of financial institutions and underscored the critical need for enhanced third-party risk management. Meanwhile, the National Institute of Standards and Technology (NIST) released Version 2.0 of its Cybersecurity Framework. This update is particularly notable as it expands the framework’s applicability beyond critical infrastructures to include a broader range of organisations, focusing on supply chain risks and emphasising governance to bolster cybersecurity defenses across various sectors. Additionally, the year saw a dramatic instance of cyberwarfare, where pro-Ukrainian hackers targeted the Russian Center for Space Hydrometeorology, deleting 2 petabytes of critical data. This attack significantly disrupted the operations of over 50 state entities, including the Russian Ministry of Defense. These events from 2024 illustrate the dynamic and high-stakes nature of today’s cybersecurity landscape, pushing organisations and governments toward more stringent and innovative measures to protect digital infrastructures.8,9
As the digital payments landscape continues to evolve, corporate treasurers are playing a pivotal role in adapting to emerging trends to enhance efficiency and security in financial operations. Corporate treasurers are the financial guardians of a company and are ultimately responsible for its financial well-being. As digital payment technologies rapidly progress, treasurers are increasingly engaging with real-time payments, digital wallets, and various forms of digital currencies such as cryptocurrencies, stablecoins, and central bank digital currencies. The use of distributed ledger technology (DLT) and blockchain is also gaining traction, providing transparent, secure, and decentralised transaction networks. Additionally, biometric security and A.I. are reshaping payment security strategies by improving authentication processes and detecting fraudulent activities. Corporate treasurers must remain informed and proactive in integrating these advancements to optimise liquidity management, streamline payments, and ensure compliance within their organisations.10
Bloomberg, “Tesla Co-Founder JB Straubel Built an EV Battery Colossus to Rival China”, April 2024. Available at: https://www.bloomberg.com/news/features/2024-04-18/redwood-material-s-nevada-ev-battery-recycling-facility-attempts-to-rival-china
International Monetary Fund, April 2024. Available at: https://www.imf.org/en/Topics/climate-change/energy-subsidies?utm_source=substack&utm_medium=email
IEA, “Net Zero by 2050″April 2024. Available at: https://www.iea.org/reports/net-zero-by-2050?utm_source=substack&utm_medium=email
Financial Times, “The $9tn question: how to pay for the green transition”, April 2024. Available at: https://www.ft.com/content/6873d96e-3e40-45c6-9d84-8ce27b7b23e1?shareType=nongift&utm_source=substack&utm_medium=email
Bloomberg, April 2024.
PWC, “Flexible by design: The key to financially viable and sustainable infrastructure”, April 2024. Available at: https://www.pwc.com/gx/en/issues/esg/the-energy-transition/sustainable-energy-infrastructure/flexible-design-vital-for-sustainable-infrastructure.html
FMC, “FMC Corporation announces multi-year collaboration with AgroSpheres”, April 2024. Available at: https://www.pwc.com/gx/en/issues/esg/the-energy-transition/sustainable-energy-infrastructure/flexible-design-vital-for-sustainable-infrastructure.html
Techopedia, “Biggest Data Breaches And Cyber Hacks of 2023 And 2024”, April 2024. Available at: https://www.techopedia.com/biggest-data-breaches-and-cyber-hacks
NIST.Gov, “NIST Releases Version 2.0 of Landmark Cybersecurity Framework”, April 2024. Available at: https://www.nist.gov/news-events/news/2024/02/nist-releases-version-20-landmark-cybersecurity-framework
HSBC, “A new payments paradigm”, April 2024. Available at: https://www.gbm.hsbc.com/en-gb/insights/innovation/a-new-payments-paradigm
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