Governance, Risk & Compliance

Business Interruption & Cyber Incidents – Top Threats In Asia Pacific

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19 January 2023

According to Allianz Risk Barometer 2023, Cyber Incidents and Business Interruption rank as the top company concerns amid the rise of economic and energy risk.

  • Allianz Global Corporate & Specialty (AGCS) publishes 12th annual survey of key business risks around the world, according to 2,700+ respondents
  • Pandemic outbreak plummets down the list of worries as Covid-19 restrictions have largely been removed
  • Climate-related concerns increase in Asia Pacific, with natural catastrophes and climate change amongst the top five risks

It is both stability and change in the Allianz Risk Barometer 2023. Cyber Incidents and Business Interruption rank as the biggest company concerns for the second year in succession (both with 34% of all responses). However, it is Macroeconomic Developments such as inflation, financial market volatility and a looming recession (up from #10 to #3 year-on-year), as well as the impact of the Energy Crisis (a new entry at #4) which are the top risers in this year’s list of global business risks, as the economic and political consequences of the world in the aftermath of Covid-19 and the Ukraine war take hold.

Such pressing concerns call for immediate action from companies, explaining why both Natural Catastrophes (from #3 to #6) and Climate Change (#6 to #7) drop in the annual rankings, as does Pandemic Outbreak (from #4 to #13) as vaccines have brought an end to lockdowns and restrictions. Political risks and violence is another new entry in the top 10 global risks at #10, while Shortage of skilled workforce rises to #8. Changes in legislation and regulation remains a key risk at #5, while Fire/explosion drops two positions to #9. View the full global and country risk rankings

The Allianz Risk Barometer is an annual business risk ranking compiled by Allianz Group’s corporate insurer Allianz Global Corporate & Specialty (AGCS), together with other Allianz entities, which incorporates the views of 2,712 risk management experts in 94 countries and territories including CEOs, risk managers, brokers and insurance experts. It is being published for the 12th time.

AGCS’ CEO Joachim Mueller comments on the findings: “For the second year in a row the Allianz Risk Barometer shows that companies are most concerned about mounting cyber risks and business interruption. At the same time, they see inflation, an impending recession and the energy crisis as immediate threats to their business. Companies – in Europe and in the US in particular – worry about the current ‘permacrisis’ resulting from the consequences of the pandemic and the economic and political impact from ongoing war in Ukraine. It’s a stress test for every company’s resilience.

“The positive news is that as an insurer we see continuous improvement in this area among many of our clients, particularly around making supply chains more failure-proof, improving business continuity planning and strengthening cyber controls. Taking action to build resilience and de-risk is now front and center for companies, given the events of recent years.”

In 2023, the top four risks in the Allianz Risk Barometer are broadly consistent across all company sizes globally – large, medium and small – as well as across core European economies and the US (energy crisis excepted). Risk concerns for businesses in Asia Pacific and African countries show some deviation, reflecting the different impact of the ongoing war in Ukraine and its economic and political repercussions.

Digital And Disruption Dangers

Cyber Incidents, such as IT outages, ransomware attacks or data breaches, ranks as the most important risk globally for the second year in succession – the first time this has occurred. It also ranks as the top peril in 19 different countries, among them Canada, France, Japan, India and the UK. It is the risk that small companies (<$250mn annual revenue) are most worried about.

“For many companies the threat in cyber space is still higher than ever and cyber insurance claims remain at a high level. Large companies are now used to being targeted and able to repel most attacks. Increasingly, we see more small- and mid-size businesses impacted who often tend to underestimate their exposure. They all need to continuously invest in strengthening their cyber controls,” says Shanil Williams, AGCS Board Member and Chief Underwriting Officer Corporate, responsible for cyber underwriting.

According to the Allianz Cyber Center of Competence, the frequency of ransomware attacks remains elevated in 2023, while the average cost of a data breach is at an all-time high at $4.35mn and expected to surpass $5mn in 2023. The conflict in Ukraine and wider geopolitical tensions are heightening the risk of a large-scale cyber-attack by state-sponsored actors. In addition, there is also a growing shortage of cyber security professionals, which brings challenges when it comes to improving security.

For businesses in many countries, 2023 is likely to be another year of heightened risks for Business Interruption (BI) because many business models are vulnerable to sudden shocks and change, which in turn impact profits and revenues. Ranking #2 globally, BI is the number one risk in countries such as Brazil, Germany, Mexico, Netherlands, Singapore, South Korea, Sweden and the US.

The scope of disruptive sources is wide. Cyber is the cause of BI companies fear most (45% of responses); the second most important cause is the energy crisis (35%), followed by natural catastrophes (31%). The skyrocketing cost of energy has forced some energy-intensive industries to use energy more efficiently, move production to alternative locations or even consider temporary shutdowns. The resulting shortages threaten to cause supply disruption across a number of critical industries in Europe, including food, agriculture, chemicals, pharmaceuticals, construction and manufacturing, although warm winter conditions in Europe and stabilization of the price of gas is helping to ease the energy situation.

A possible global recession is another likely source of disruption in 2023, with potential for supplier failure and insolvency, which is a particular concern for companies with single or limited critical suppliers. According to Allianz Trade, global business insolvencies are likely to rise significantly in 2023: +19%.

Top Asia Pacific Risks

Business Interruption (#1 with 35% of responses) is the top risk in Asia Pacific, surpassing Cyber Incidents (#2 with 32%) which ranked top for the previous three years. Natural Catastrophes (#3 with 27%), Changes in legislation and regulation (#4 with 24%), and Climate Change (#5 with 22%) make up the other top risks in the region.

Business Interruption ranks in the top three risks in all countries in Asia Pacific and is the top risk in Singapore and South Korea. This comes as little surprise as companies need to navigate supply chain disruption, uncertain geopolitical, economic and climate risks, as well as long-term transformations such as digitalization and decarbonization.

Ranking second in Asia Pacific, Cyber Incidents remains a significant concern in the region, especially in Japan and India where it ranks top. Cyber Incidents claimed top spot in India for the past six years, and the country has been dealing with cyber security concerns for a while. For example, in November 2022, multiple servers of the All India Institute of Medical Sciences (AIIMS), a federal government hospital that caters to ministers, politicians and the general public, were infected. Businesses in Japan were also most concerned about Cyber Incidents, which claimed top spot for the past three years. Notably, in 2022, a large Japanese car manufacturer closed all of its factories nationwide for a day following a cyberattack at a supplier. The suspension affected an output of around 13,000 vehicles.

Changes in legislation and regulation rose from #5 to #4 year-on-year, keeping its place among the top five Asia Pacific risks for the fifth consecutive year, and was also the top risk in China, where companies are facing an increasingly tightening regulatory environment and industries as disparate as technology, finance, education, and transport have had to adapt to a new regulatory climate.

Climate-related concerns gained ground in Asia Pacific. Natural Catastrophes rose from #4 to #3 year-on-year, spurred by notable events such as widespread flooding across South Asia from January to October, which led to the deaths of over 3,500 people, and the devastating heatwaves suffered by China in the sixth warmest July and August since 1880. Secondary perils are not to be underestimated too, with floods in eastern Australia resulting in insured losses around $4bn, the country’s costliest ever natural catastrophe. Climate Change rose from #6 to #5 year-on-year, as companies are confronted with a wide range of transformation risks resulting from new market conditions or product requirements, or from changes in business strategy.

Mark Mitchell, Regional Managing Director, Asia Pacific at AGCS, said, “Despite the easing of supply chains from Covid-19 related recovery, businesses in Asia Pacific continue to face significant business interruption as they need to navigate a plethora of challenges. This includes global shortages and inflationary pressures as a result of the war in Ukraine and geopolitical tensions, and other perennial risks in the rankings such as cyber and natural catastrophes.

“These risks, coupled with the threat of recession this year, will once again force companies to evolve and adapt their business models, as they did at the start of the pandemic. Businesses also need to continue to enhance resilience by working with stakeholders and partners to develop alternative suppliers and improve business continuity management.”

Upgraded ESG Technology Alliance Drives Changes in Governance across ASEAN

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DigitalCFO Newsroom | 22 November 2022

Taiwan and Japan take technological exchanges a step further.

Geopolitical tensions in the Asia-Pacific region have triggered a crisis in global supply chains. Taiwan and Japan have recently expanded their collaborative efforts and exchanges in the technology field. Both markets share the characteristics of interdependence and complementarity. Thus, the two regions have close partnerships, especially in foresight technology and economic and trade cooperation. With flourishing governmental and civil exchanges, Taiwan-Japan collaborations continue to thrive.

Sunrisemedium, a Taiwanese digital media outlet, and Startup Island TAIWAN, a public sector start-up brand, organized the ESG Opportunity Matchmaking and Exchange Forum for Taiwan-Japan in November of this year, to which they invited 9 major technology start-ups from Taiwan and Japan to discuss the opportunities for cooperation between the two regions in the ESG field. The forum focused on joint efforts to enter the ASEAN market with solutions and collaborative approaches in three dimensions: digital transformation, environmental sustainability and intelligent infrastructure. The participating technology start-ups from Japan include QUANDO, zeroboard and VACAN. Taiwan’s participating companies include Wishing-Soft, Sustaihub, Dawoko, Canopy Impact Investment, Blutech and TMY Technology.

Representatives from Taiwan and Japan reached consensus on three important topics that are key in accelerating regional integration and achieving the goal of carbon neutrality by 2050:

1. The relationship between Taiwan and Japan evolves from trusted partners to a regional ESG technology alliance: Jointly capturing the Asia-Pacific market requires one to two years of resource coordination and planning, and needs to drive a collective supply chain upgrade for ASEAN members

2. Taiwanese and Japanese companies jointly promote ESG with altruism as the core: Companies in the two regions serve as models for and drivers of the digital infrastructure and circular economy ecosystem in the Asia-Pacific region. One assists others to maximize their business value.

3. Taiwan and Japan accelerate the sharing of their experience in the application of AI in both regions: Taiwan and Japan have similar population aging processes, lifestyles and educational systems. As such, this dramatically shortens the journey of AI machine learning.

With the synergy of assistance, complementarity and reciprocity, Taiwan and Japan have initiated 9 key paths to industrial transformation. The 9 key paths include heavy industry, manufacturing, energy, construction, transportation, information and communications, low-orbiting satellites, agriculture, livestock and life services. The forum focused on three key themes in line with the ESG paths:

1. Digital transformation overcomes human limitations and successfully drives business decisions:

  • QUANDO’s remote collaboration platform accelerates the transformation of aging industrial facilities;
  • Wishing-Soft’s SaaS dramatically reduces ESH (Environmental, Safety and Health) risks; and
  • Sustaihub’s AI technologies optimize ESG decisions.

2. Carbon reduction, the circular economy and local entrepreneurship nurture environmentally sustainable supply chains:

  • zeroboard’s cloud services for the calculation of greenhouse gas emissions help companies decarbonize;
  • Dawoko’s forestry circular economy connects 30 companies to help create a new model for living responsibly; and
  •  Canopy Impact Investment’s integration platform empowers new ventures in agriculture and food to expand the impact of their ESG paths.

3. Smart infrastructure facilitates digital governance in public and private sectors:

  • VACAN’s AI-based platform, which detects space that is not being used such as empty seats in restaurants and empty spaces in parking lots, maximizes space utilization and can be repurposed to meet emergency relief needs;
  • Blutech’s wireless sensing technology overcomes limitations of field management such as physical wiring; and
  • TMYTEK uses 5G and satellite communication technologies to build the data transmission and communications foundation for a smart city. 

Taiwan-Japan exchanges and cooperation are just around the corner. The two goals for 2023 are:

1. Leverage Taiwan’s strength in executing proofs of concept (PoCs): Collaborating on the plans for the Japanese supply chain market, and establishing a presence in the Asia-Pacific, European and American markets

2. Connect Taiwan’s and Japan’s supply chain data: Sharing the digital build of software and hardware to reverse the renewable energy deficit in the Asia-Pacific region

Japan, as a leader in the circular economy, is the first G7 country to consider ESG when making decisions concerning investment in foreign exchange reserves in 2021. In addition, Japan has put in place policies on digital governance and boosted the transformation of local traditional industries. All the efforts eventually make the society be prepared to enter the aging society with AI applications. These policies and their applications will influence digital development across all ASEAN countries. Taiwan, as the invisible driver of the global technology supply chain, will continue to support the R&D and applications of Japanese partners. Furthermore, Taiwan is also developing flexible international co-creation models. Taiwanese innovation teams are able to empower Japanese counterparts to deliver more comprehensive and sustainable services to ASEAN members. Resource integration will be the focus of Taiwan-Japan exchanges in 2023. Sunrisemedium and Startup Island TAIWAN will match the ESG resources of more Taiwanese and Japanese companies and create cross-country clustering benefits in Asia-Pacific supply chains.

Launch Of New ESG App Building Services for Data Collection In Hong Kong

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DigitalCFO Newsroom | 26 August 2022

 To help companies collect and process a large number of various types of ESG information more conveniently, GreenCo has successfully developed and launched a new ESG Portal.

As Environmental, Social and Governance (“ESG”) regulations and disclosure requirements become more stringent, the collection, storage and analysis of ESG-related data are going to play a more important role in companies’ ESG management. To help companies collect and process a large number of various types of ESG information more conveniently, GreenCo has successfully developed and launched a new ESG Portal for the digital management of ESG data, which is one of the first digital ESG data platforms in Hong Kong that can be customized according to individual company’s needs.

GreenCo’s new ESG Portal is specially designed for the digital management of ESG data collection. Individual clients will have their own customized portal for management. This portal is perfect for companies with various geographical locations and companies that need to collect data from a large amount of branches or stores.

Remote and easy access

The ESG Portal is an application with different digital forms embedded. Individual clients will have access to their own portal, while their staff in multiple business locations can remote access the platform and submit their entries easily. This can also come in handy for the ESG Portal is designed to be adaptable to all sizes of electronic screens, ranging from phones, tablets to laptops views. To facilitate easy work allocation, GreenCo is going to assist its client to design the structure of the portal according to their reporting lines and segregation of duties.

Quality Control

To control the quality of the data collected, the ESG Portal is also equipped with the data validation function which is designed to prevent invalid or human error in the input process. Supported by GreenCo’s abundant experience in serving over 60 public companies covering a wide spectrum of industries and geographical locations, the data validation criteria are designed to lead to better and error-free data.

Automated Calculations

Furthermore, the ESG Portal also supports the basic scoring algorithm and calculation, which can help save time and reduce errors. In addition, ESG scorecards can be designed for clients to perform ESG evaluation on a digital basis. This can also help clients that looking for solutions in evaluating their supplier’s ESG performance or fund manager in evaluating their investee’s ESG performance.

Cost and Benefit

The actual cost will depend on customer’s specific requirements (on validation and interfaces) and ESG data organization structure. It may cost around 50% of the annual reporting budget for the first time and around 20% to 33% of annual reporting budget for the next few years. The benefit is huge for time cost savings in centralized data management, the risk of personnel change, promoting consistency and error prevention.

The Director of GreenCo, Max Tsang explained that “With our years of experience in helping our clients to prepare their annual ESG Report, we can see that some clients with diverse business segments and business locations need a lot of help in data collection as well as consolidation and processing of the scattered data. In view of this, riding on the trend of digitalization, we have developed the ESG Portal as a one-stop solution for our clients to better collect and handle their ESG data. We believe that by better managing the ESG data, companies can track their progress more easily and thereby allowing opportunities to enhance their ESG performance.”

Stephanie Chan, the senior consultant of GreenCo, is convinced that the new ESG Portal not only helps companies to collect ESG data in a more organized way, but can also help companies prepare for future regulatory updates such as independent assurance of the annual ESG report. “With the ESG Portal, all ESG data are collected and saved on the server. Whenever audit evidence is needed, clients can simply export the data saved with the submission personnel and submission data clearly logged, resulting in easy reporting and auditability,” she added.

As the world is moving away from the traditional way of data processing that involves loads of paper forms and spreadsheets, GreenCo hopes that this launch of the ESG Portal can help its clients to transit towards a more sustainable digitalized future.

ESG Indices to Improve SZSE Characteristic Index System

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DigitalCFO Newsroom | 12 August 2022

SZSE Issued Evaluation Method of ESG and ESG Indices to Improve SZSE Characteristic Index System and Provide Services to Low-Carbon and Sustainable Development.

On July 25, Shenzhen Securities Information Co., Ltd. (hereinafter referred to as “Shenzhen Securities Information”), a wholly-owned subsidiary of the Shenzhen Stock Exchange (“SZSE”), formally launched the evaluation method of CNI ESG and released the ESG Indices and the ESG Top Indices of the SZSE core indices (namely, the Shenzhen Component Index, the ChiNext Index, and the Shenzhen 100 Index) following such evaluation method. These are the practical measures taken by SZSE to fully implement the new development concept, make full use of the platform functions of the capital market, continuously improve SZSE’s characteristic index system, actively meet the diversified investment needs of the market on ESG, and provide better services for the green, low-carbon, and high-quality development.

The evaluation method of CNI ESG aims to provide the tools for ESG evaluation adapted to the Chinese markets. There are 15 themes, 32 fields, and more than 200 indicators established under three dimensions: environment, social responsibility, and corporate governance. These comprehensively reflect the practice and performance of listed companies regarding their sustainable developments and provide a solid foundation for further promotion of the development and innovation of the ESG indices and index products of SZSE. The evaluation method followed four principles: acting locally, learning from international experience, showing distinctive characteristics, and improving dynamically. It focuses on carbon neutrality, innovation-driven development, rural revitalization, common prosperity, and other national strategic targets. It also combines the international ESG evaluation practices with the long-term research experience of Shenzhen Securities Information to explore and construct a characteristic index system. The index data cover all A-share companies, the index scores are based on the objective rules and public information, and the evaluation results are updated quarterly. According to the latest results, the ESG performance of A-share companies has been improving. The ESG performance of bottom-ranked companies has enhanced significantly as well. These reflect that China’s capital markets have achieved good results in serving sustainable development.

The ESG Indices are positioned as the performance benchmarks of ESG investment. Regarding the selection of the ESG Indices’ sample stocks, the Shenzhen Component ESG Index (“SZI ESG”), the ChiNext ESG Index (“CNT ESG”), and the Shenzhen 100 ESG Index (“100 ESG”) take the Shenzhen Component Index, the ChiNext Index, and the Shenzhen 100 Index as their parent indices, respectively. The constituents of their parent indices are sorted according to the primary industries of CNI to which they belong and are ranked from high to low according to their scores of CNI ESG. Those stocks whose ESG scores fall in the bottom 20% of the industries to which they belong are excluded, and the remaining stocks are selected to constitute the sample stocks of respective ESG Indices.

The ESG Top Indices are positioned as high-quality ESG investment targets and highlight the return performance of the ESG factors. Regarding the selection of the sample stocks of the Shenzhen Component ESG Top Index (“SZI ESG TOP”), the ChiNext ESG Top Index (“CNT ESG TOP”), and the Shenzhen 100 ESG Top Index (“100 ESG TOP”), the constituents of their corresponding core indices are ranked from high to low according to their scores of ESG. SZI ESG TOP takes the respective top 200 stocks as its sample stocks, while CNT ESG TOP and 100 ESG TOP each take the respective top 50 stocks as their sample stocks.

According to estimates, from the benchmark date of 29 June 2018 to 30 June 2022, the annualized returns of SZI ESG, CNT ESG, and 100 ESG are 9.4%, 17.0%, and 11.7%, respectively. Their characteristics of movements are consistent with their parent indices, as the correlation coefficients of their daily returns exceed 0.99. They demonstrate relatively slight advantages in their return performance over their parent indices. The annualized returns of SZI ESG TOP, CNT ESG TOP, and 100 ESG TOP are 9.8%, 17.5%, and 14.0%, respectively, and are significantly better than those of their parent indices. In addition, their annualized excess returns are 1.5%, 2.5% and 2.5%, respectively.

With the continuous and in-depth advancement of the dual carbon strategy, the ESG investment in China has shown a rapid development trend, the concept of ESG investment is beginning to take root, and the ecosystem of ESG investment has become increasingly sound. In the future, SZSE will continue to, in accordance with the deployment requirements of the China Securities Regulatory Commission, thoroughly, accurately, and comprehensively implement the new development concept, and promote and improve the sustainable system of financial rules, to build a low-carbon sustainable allocation platform for investment and financing products, to serve the needs of diversified allocation of medium and long-term funds. Comprehensively leveraging on its function of the market organization, SZSE will expand the application of ESG evaluation results, guide financial resources to gather in low-carbon fields, commit to building itself as a sustainable exchange, and help promote high-quality development of the economy.

South Korea Plans Financial Tool To Head Off Crises

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DigitalCFO Newsroom | 27 July 2022

South Korea’s top financial regulator unveiled on Tuesday a draft plan for supporting distressed financial companies to prevent failures.

South Korea’s top financial regulator unveiled on Tuesday a draft plan for supporting distressed financial companies to prevent failures, rather than waiting to bail them out after they had defaulted and caused economic damage.

Under the plan, a credit facility run by the Korea Deposit Insurance Corporation (KDIC) would provide credit guarantees to financial companies in difficulty to sustain them while they arranged to replenish capital by issuing and selling bonds or preferred equity.

The facility would also provide short-term loans, the Financial Services Commission said in a statement, adding that it could be created by late 2023 if legislative revisions and other preparations went smoothly.

Taxpayers’ money would not be needed, it said. The KDIC would use its resources, already supported by deposit insurance premiums, and charge fees for extending guarantees and loans.

The commission said South Korea had several policy tools designed to cope with financial crises but the new plan was aimed at creating a means for staving them off.

In financial crises in the late 1990s and in 2008 and 2009, the South Korean economy suffered severely as financial companies became illiquid and had trouble paying obligations. The authorities helped them recapitalise, but by that time the damage had been done.

The commission stressed that the financial system was currently sound. The proposed facility may be called the financial stability account.

Source: Reuters

SMBC Appoints New Head of ESG Solutions in Asia Pacific

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DigitalCFO Newsroom | 25 July 2022

Priya Bellino, Head Of ESG Solutions, Asia Pacific

Sumitomo Mitsui Banking Corporation (SMBC) announced today the appointment of Priya Bellino as Head of ESG Solutions in Asia Pacific, effective 18 July 2022. 

Based in Singapore, Priya will be responsible for leading SMBC’s sustainable finance initiatives in Asia  Pacific. Working with a dedicated team of ESG specialists, she will drive SMBC’s continued ESG  ambitions and growth across the region. She will report to David Koh, Managing Director and Deputy  Head of Corporate Banking, Asia Pacific at SMBC.  

Priya brings with her a wealth of experience in the finance industry. She was most recently a leading  member of EY’s sustainable finance business consulting practice, where she advised major international and regional banks, asset managers and insurers on sustainable finance matters. These  included climate stress testing approaches, implementations under the environmental risk management  guidelines of the Monetary Authority of Singapore, and ASEAN decarbonization strategies, amongst others. 

Prior to EY, Priya spent 17 years of her career with Goldman Sachs in London and Singapore and  helmed various senior roles including Head of the Asia Pacific Risk Engineering department, where she  managed portfolio analytics, capital exposure monitoring and risk metrics reporting.  

She has a personal passion for sustainability and had previously set up her own sustainability consulting  firm, where she engaged in sustainability projects across industries and regions, including supporting  Imperial College London with capacity building initiatives for the Singapore Green Finance Centre,  which SMBC is a founding partner. 

Commenting on the appointment, David Koh said, “Our ESG mission and targets are clearer than ever, and we are delighted to have Priya onboard to help lead our sustainability efforts across Asia Pacific. Priya’s strong expertise and keen understanding of the sustainable finance space in the region adds to  SMBC’s strength in this domain. Together with the bank’s growing efforts and investment into  sustainability, we will continuously deliver best-in-class ESG innovations and solutions for our  customers as they embark on their climate transition journey.” 

Presenting The Pioneers Of Impact

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DigitalCFO Newsroom | 19 July 2022

The TTI Global Impact awards recognize the most innovative startups leading the way in achieving sustainability across all major economic sectors. 

For the second year now, the TTI Global Impact Awards celebrate the cutting edge advancements made in the sustainability and positive impact space. The awards recognise the most innovative startups leading the way in achieving sustainability across all major economic sectors. This year, the top 10 finalists were announced during the World Economic Forum in Davos on May 25th 2022. 

After a public voting phase with more than 5,800 votes, and after the votes from a panel of expert judges such as explorer Mike Horn, Lady Marina Windsor, Jason Silva, Benjamin Eymere (CEO of l’Officiel), Ryland Engelhart (founder of Kiss the Ground), sustainable fashion entrepreneur Samata Pattinson and Michael Lints (Partner at Golden Gate Ventures) – the final winners of this year’s Top Tier Impact Awards have now been officially announced. 

Meet the startups who are building a positive paradigm for our planet: 

Agriculture & Food: BeeHero – Develops beehive technology, maximizing crop yields through pollination

Consumer & Retail: Circular – Second-hand subscription platform for electronics 

Education & Media: The Spaceship – Classes for entrepreneurs focused on solving social and environmental challenges

Energy & Environment: Carbofex – Turns waste into value by binding CO2 to the soil 

Financial Services & Web 3: The Sun Exchange – P2p solar panel leasing platform

Healthcare & Wellbeing: Meru Health – Mental healthcare platform teaching skills for healthy lifestyle habits

Sustainable Cities & Infrastructure: Africa GreenTec – Holistic system for sustainable electricity production and us

Diversity & Inclusion: Just Arrived – Connects newly-arrived immigrants with local companies

Alessa Berg, founder and CEO of TTI, said: “We took the leading voices of positive innovation to Davos during the WEF. We believe in a sustainable world full of diversity and inclusion.”

Billy Zane, Hollywood actor and TTI member, said: “In this second edition, the TTI Global Impact Awards brought some of the world’s leading innovators to Davos to celebrate positive change.”

Helena Wasserman Eriksson, Partner and Chief Revenue Officer at TTI, said: “In the current economic climate it’s inspiring to witness entrepreneurs building the companies that will be the new standard of companies from a sustainability and governance stand point. 

Road To ESG: Esker’s Commitment To Creating A Positive Impact

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Fatihah Ramzi, DigitalCFO Asia | 13 July 2022

Esker has a firm belief that a company should expand economically while also benefiting its entire ecosystem, society, and environment.

Customers, staff, and partners of Esker all share the firm belief that a company should expand economically while also benefiting its entire ecosystem, society, and environment. Esker refers to this as positive-sum growth. Esker wants to minimize their environmental impact in order to help safeguard the environment.

Esker promises to conduct all of its operations ethically and responsibly, from governance to supply chain. They want to foster a collaborative workplace atmosphere and a management style that values inclusion and diversity. Esker also hopes to increase client happiness and trust by offering cutting-edge solutions on a solid foundation.

“Our innovative and responsible solutions have a positive impact on society and the people within it and enable our customers to improve their own ESG performance,” says Jean-Michel Bérard, CEO of Esker. 

Mitigating Environmental Impact 

A new study finding, news item, or environmental calamity almost every day adds to the mounting body of evidence that the world is in serious trouble. Experts have cautioned that inaction might lead to social and economic catastrophes such as alarmingly high levels of hunger throughout the world, problems associated with mass migration, the collapse of international financial markets, and others. Business executives are reevaluating the goals and priorities of their companies in light of this.

Due to this, Esker continually works to minimize its influence on the environment and proactively calculates its carbon footprint. Their Lyon headquarters and postal manufacturing plant both have ISO14001:2015 certification as of 2019 and 2020, respectively. Esker is also devoted to implementing a “Green IT” strategy. To achieve this, they train their development teams on how to optimize workflows and select data center vendors who have a strong focus on environmental protection, such Microsoft Azure.

Promoting Ethical & Responsible Governance

The term “governance” especially refers to the system of regulations, checks, policies, and resolutions established to direct company action. Important stakeholders who indirectly influence governance include proxy advisors and stockholders. The board of directors is crucial to governance, and its decisions can have a significant impact on how much stock is worth.

The term “governance” especially refers to the system of regulations, checks, policies, and resolutions established to direct company action. Important stakeholders who indirectly influence governance include proxy advisors and stockholders. The board of directors is crucial to governance, and its decisions can have a significant impact on how much stock is worth.

Esker incorporates financial and non-financial best practices into company governance in addition to adhering to laws and regulations, particularly through the use of an internal code of conduct. Esker adheres to the Middlenext governance code, and its Supervisory Board supports gender balance and is completely autonomous.

Empowering Employees

From a new hire’s initial steps through their Esker career, Esker is devoted to a caring and dedicated corporate culture that encourages diversity and inclusion. Their objective is to promote workplace wellness, as evidenced by their low staff turnover (9%) and high recommendation rate (90 percent ).

One of the most crucial qualities a leader can have is empathy. According to a Businesssolver survey, 93 percent of employees say they are more likely to stay with an empathic employer, and 91 percent of CEOs think empathy is directly related to a company’s financial performance. Additionally, the top leadership skill according to DDI, a global consulting business, is empathy.

Put yourself into an employees’ shoes and try to understand their point of view regarding their role and contributions in the workplace. By taking their perspectives into account, companies can become a more emotionally intelligent leader and make their team members feel like they’re understood and valued.

Focusing On Customers

Customers today have greater expectations than ever before, and they are scrutinizing businesses more closely. They are contrasting their interactions with any brand to brands that are able to deliver simple, quick, and tailored interactions. And these customer-centred companies are the ones who profit from increased loyalty and competitive advantage.

The importance of putting the needs of the customer first has never been greater, with 89% of businesses basing their competition primarily on that factor. However, there is still a discrepancy between the number of businesses that claim to be customer-focused and the number of clients who concur.

Customers of Esker’s are the company’s lifeblood, and they rely on it to lead them down a successful path. In order to ensure that clients can benefit the most from Esker’s solutions, Esker also has a dedicated Customer Experience team and a cloud platform that is available 24/7 and complies with the highest security standards.

Esker is currently prioritising an ESG management, stewardship and strategy continuum. The company will continue developing and deploying its ESG strategy which they believe will significantly increase their impact towards a greener footprint as well as their ability and readiness to report out publicly as a sustainable business. This can be seen by how they are mitigating against risk and maximizing opportunity across their business operations.

Asian Companies Face Rising Credit Risks Despite Shorter Payment Delays

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DigitalCFO Newsroom | 29 June 2022

Improved economic conditions in 2021 contributed to a notable fall in the duration of payment delays across Asia-Pacific.

Coface’s 2022 Asia Corporate Payment Survey, conducted between November 2021 and February 2022, provides insights into the evolution of payment behaviour and credit management practices of about 2,800 companies across the Asia Pacific region during another pandemic year. Respondents came from nine markets (Australia, China, Hong Kong SAR, India, Japan, Malaysia, Singapore, Thailand and Taiwan) and 13 sectors located in the Asia-Pacific region.

No Deterioration of Payment Delays Despite The Impact of COVID Except In China

Improved economic conditions in 2021 contributed to a notable fall in the duration of payment delays across Asia-Pacific, dropping from 68 days on average in 2020 to 54 days in 2021, the lowest level in 5 years. The share of respondents experiencing overdue payment remained stable at 64% vs. 65% in the previous year. Among the nine economies covered, payment delays shortened the most in Malaysia and Singapore. By contrast, China was the only country that recorded a rise in payment delays, and also was the country with the longest average payment delay.

However, the survey highlighted some concerns. The share of respondents that mentioned an increase in the amount of overdue went up to 35% in 2021, against 31% in the preceding year. Furthermore, more companies reported ultra-long payment delays (ULPDs) of more than 10% of annual turnover, with this increase driven largely by China where the already high share of 27% in 2020 grew to 40% in 2021. The proportion of ULPDs slightly rose in Australia and India, while it stabilized or declined in the other six economies, with a significant drop in Hong Kong. The large majority of ULPDs are never paid, and therefore, cash-flow risks tend to increase when these ULPDs account for over 2% of a company’s annual turnover.

Sector-wise, the increase in companies experiencing ULPDs of more than 10% was particularly marked in the metals sector, for which it increased by 14 pp to nearly 23%, the largest registered among the 13 sectors. Other sector such as construction, ICT, transport and textile also face significant cash flow risks, with more than 30% of companies that experienced ULPDs reporting that such delays represented more than 2% of annual turnover.

Economic Expectations: Sustained Optimism But High Concern On Rising Material Prices

Overall, optimism remains intact, with 71% of respondents expecting economic growth to improve in 2022. This optimism was, however, unequal across the region. Singapore is more optimistic compared to the Asia average, with 83% (+17 pp) anticipating higher growth. Companies in Japan and Thailand, where the recovery was relatively subdued in 2021 and therefore with a greater scope for a stronger recovery in 2022, showed more confidence as well, both rising by 14 pp to 75% and 80%, respectively. By contrast, this share was only 44% in Malaysia, showing a significant decline (-29 pp) as compared to last year amid rising political uncertainty, with the possibility of a snap general election in 2022.

Rising raw material prices are increasingly mentioned by respondents when asked about the effect of COVID-19 on their sales performance and cash flow. Over half (54%) of the companies mentioned rising raw material prices as a key factor, up considerably from 31% in 2020. Raw material prices rose sharply in 2021, especially in crude oil, and were lifted significantly higher following the conflict in Ukraine. This intensified cost pressures for companies worldwide, including in Asia-Pacific, which heightened the risk of developing cash-flow problems.

Asian Businesses Margins Increasingly Under Pressure

Nowadays, businesses are dealing with a complex environment characterized by supply chain disruptions, geopolitical tensions, and surging inflation. Supply constraints persisted in 2021, partly due to fresh COVID-19 outbreaks and new lockdowns. Nonetheless, the world gradually reopened and private demand rebounded. This widened the gap between demand and supply of many products and raw materials, leading to significant increase in prices. Global supply chain pressures slightly abated at the start of 2022, but were reignited by the Russia-Ukraine conflict. Given both countries’ predominant role in global commodity markets, the conflict has led to a further surge in raw material prices, pushing inflation higher and, in turn, wages as well. Consequently, it weighed on business profitability by increasing production costs.

After enjoying subdued inflationary pressures through 2021, Asian countries are now recording rapidly rising inflation, especially in food and energy items. In some Asian economies, consumer price index (CPI) growth rate has exceeded central bank’s target. This was the case in Thailand, where CPI posted an annual increase higher than the upper value of the central bank’s target band of 3% for the fifth consecutive month in May. Inflation target were also breached in Australia, India, and the Philippines. After having experienced deflation during 10 months over 2020/2021, Japanese inflation went above the Bank of Japan’s target with 2.5% in April. Facing this surge in living costs, some countries decided to increase wages in order to help consumers to deal with the situation. In Japan, South Korea and Singapore, data revealed that average wage growth has accelerated since 2021. In Southeast Asia, Malaysia introduced a large minimum wage hike of 35% in May 2022. A rise in minimum wage is also set to be implemented in the Philippines in June and in Vietnam the following month.

‘Improved economic conditions in 2021 contributed to a notable fall in the duration of payment delays across Asia-Pacific. However, companies in the region faces rising credit risks, with more companies reported an increase in the amount of overdue. They were also more experiencing ultra-long payment delays of more than 10% of annual turnover, notably in China and, to a much lesser extent, in Australia and India.’, said Bernard Aw, Coface’s Asia-Pacific Economist.

Find here the Coface Asia Corporate Payment Survey 2022 produced by Coface.

Using analytics to alleviate fraud risks in financial services

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Attributed to Adam Mayer, Senior Manager, Technical Product Marketing, Qlik | 8 February 2021

Adam Mayer

Senior Manager, Technical Product Marketing, Qlik

Fraud typically involves deceit with the intention to gain at the expense of another illegally or unethically. Everyone can be vulnerable, as bad actors target both consumers and organisations alike. There are many types of frauds that consumers and organisations in the financial sector can be exposed to. For example, consumers can suffer from credit card frauds where someone steals their card details and misuses it, while banks can fall for loan frauds when customers borrow money from them with no intention of repaying the debt. Insurers aren’t spared as well and can be victims of insurance claim frauds where customers make claims for theft or breakage of items which have not actually been stolen or broken. 

Fraud is becoming more prevalent in this increasingly digital world. With a focus on digital payments, financial criminals have also shifted their targets online, as seen in the recent spate of phishing scams involving OCBC Bank in Singapore where 790 customers lost a total of S$13.7 million in one month. Globally, the number of online card fraud attempts increased by 23%, according to Feedzai’s Financial Crime Report Q3 2021 Edition. Therefore, it is important for financial services to stay on top of the potential risks they or their customers may be vulnerable to. Organisations must put in place processes and adopt the set of right tools to monitor and predict any potential risks for them to act quickly and nip it in the bud. Here is where data and analytics tools can help.

Analytical products can help organisations learn about the trends based on data around the types of frauds that are occurring, its frequency and severity to enable them to patch the potential gaps in their products or services. When it comes to fraud analysis, traditionally, financial institutions would have a set of rules in place that would examine requests and offer a decision to proceed with the request (or not). Unfortunately, as more rules are constantly added, these rules-based anti-fraud systems become very complex, and they don’t always adapt to hidden threats. This sometimes results in too many false-positives – blocking legitimate transactions while missing out on fraudulent transactions. 

On the other hand, analytics together with machine learning (ML) provides the ability to collect massive amounts of disparate data, analyse that data at scale and in context, and assign a risk score in real-time. This enables a risk-based fraud analytics solution to apply the precise level of security, at the right time, through step-up authentication. At Qlik, we have been equipping our customers with analytical tools and solutions to test and assess the adequacy and effectiveness of the business and IT controls that are in place to mitigate fraud. Examples include tests to identify unusual transactions, assess the frequency and value of transactions such as those that are above or below specific limits, and consumer behaviours that are out of the norm.

Implementing data and analytical tools to aid them in fraud prevention can be complex to some, especially small financial businesses. Here are some best practices on fraud analytics that can help organisations navigate through the process.

  • Use all available data to conduct fraud tests and ensure that these data are VACANT (Valid, Accurate, Complete and Nicely Timed).
  • Ensure that the analysis of the data achieves the desired purpose and use care in aggregations as it is easy to make mistakes in formulas. History is littered with cases where analysts made minor errors in formulas that caused major errors in results.
  • Instead of showing analysis results in tables, use visualisations to help tell a story with the results to create impact and drive change.

By leveraging data and analytics, organisations in the financial sector can take on a proactive approach to mitigating fraud based on the trends and predictions. Beyond enhancing the backend systems, organisations should also continuously educate consumers about prevalent scams, how to avoid them, and what to do if they become victims. Banks specifically, should create an open line of communication for consumers to escalate any suspected fraud cases so it can be dealt with in a timely manner.

The effectiveness of fraud analytics, along with consistent engagement with consumers, can potentially save organisations millions from fraudulent incidents and allow them to focus on the things that matter most – strengthening the trust between its customers and the brand.   

BlackLine Acquires FourQ, Redefining Intercompany Financial Management

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DigitalCFO Newsroom | 28 January 2022

Acquisition strengthens BlackLine’s intercompany accounting solutions, adding advanced tax and statutory reporting compliance capabilities to its financial operations management platform

Accounting automation software leader BlackLine, Inc. (Nasdaq: BL) announced today that it has completed the acquisition of FourQ Systems, Inc., a leader in intercompany financial management technology.  With FourQ, BlackLine enhances its existing intercompany accounting automation capabilities, further strengthening its position with the Office of the Controller by driving end-to-end automation of traditionally manual intercompany accounting processes and accelerating BlackLine’s larger, long-term plan for transforming and modernizing finance and accounting (F&A). 

Global trade, mergers and acquisitions, and ever-changing tax regulations create growing headaches for global F&A teams.  As a result, intercompany accounting—the management of financial transactions between separate legal entities that belong to the same corporate group—has become a big drain on valuable F&A resources for multinational companies and been cast into the global spotlight.  The inherent complexity of intercompany financial management creates an unsustainable operating environment for organizations looking to modernize F&A operations.  With the acquisition of FourQ, BlackLine can further reduce intercompany complexity and help customers execute an effective global tax strategy.

“Intercompany accounting is one of the biggest distractions for finance and accounting for multinational corporations. Hard to believe, but most companies are still using legacy, repetitive and manual processes to manage intercompany, exposing their businesses to unnecessary costs, significant compliance risks, and missed working capital and tax opportunities,” said BlackLine CEO Marc Huffman. Built by F&A and tax experts, FourQ’s intercompany financial management software delivers automated intercompany processing to help streamline the global operations of its customers.  With FourQ’s technology, those customers have increased their operational productivity and efficiency through improved intercompany billing, payment and tax optimization.


FourQ technology complements existing BlackLine functionality by adding advanced tax capabilities and improving regulatory compliance in areas such as statutory reporting and transfer pricing.  With FourQ, companies can better enforce and optimize their global tax strategies.  As a result, companies can generate significant value by assuring compliance with tax laws including new e-invoicing mandates, optimizing effective tax rates, and reducing foreign currency risk exposure to improve working capital and drive profitability.

“FourQ and BlackLine share a vision to help optimize customers’ global operations for greater profitability and efficiency while freeing F&A teams to focus on strategic aspects of their business,” said Varun Tejpal, co-founder and CEO of FourQ who will serve as managing director, Intercompany at BlackLine going forward.  “At the same time, FourQ meets a need in the Office of the Controller that is highly complementary to BlackLine’s comprehensive financial operations management platform.  I look forward to reducing the headaches caused by messy intercompany accounting processes and further cementing BlackLine’s market-leading position as we join forces to help customers continue to advance their intercompany journeys.”

In a recent report, Ventana Research asserts that corporations with even a modestly complex legal entity structure that operate in more than a handful of tax jurisdictions and with ERP systems from multiple vendors will likely find measurable benefits from adopting intercompany financial management.  The report goes on to say that doing so enables them to address the problems created by an uncoordinated approach to intercompany transactions built on inconsistent and incomplete data.   “By moving to a modern intercompany accounting environment and eliminating distraction, companies can unlock capacity in F&A to focus on what matters most to the business,” added Mr. Huffman.

 BlackLine completed the acquisition of FourQ on Jan. 26, 2022.  In accordance with the terms and conditions of the transaction, BlackLine acquired FourQ for $165 million payable at close, plus earnout consideration of up to $75 million over the next three years subject to certain financial performance milestones.  BlackLine funded the transaction with existing cash on-hand.  Additional details regarding the acquisition will be provided in conjunction with BlackLine’s fourth quarter and year-end earnings conference call on Thursday, Feb. 10th, 2022.

MetricStream Unveils ConnectedGRC, Enabling Organizations to Build Cyber Resilience, Enhance ESG Scores, and Power Business Growth

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DigitalCFO Newsroom | 27 January 2021

MetricStream, the global market leader in integrated risk management (IRM) and governance, risk, and compliance (GRC), today announced ConnectedGRC solutions that address today’s most urgent business challenges related to risk, compliance, audit, cyber risks, and environmental, social, governance (ESG). Over the last 24 months, organizations have been challenged by a rapid increase of cybersecurity risks, business disruptions, regulatory pressures, and a constantly evolving need to demonstrate responsible business practices.    

Businesses that have historically used multiple risk and compliance point solutions experience broken processes, isolated data, and insufficient insights. MetricStream’s connected GRC software solutions are designed for professionals seeking a single, intuitive platform that enables enhanced collaboration, information sharing, and a quantitative approach to risk management.   

“The old ways of managing risk – siloed, compartmentalized, and manual – are no longer effective or efficient. Risk is pervasive, stretching across the enterprise,” said Bruce Dahlgren, Chief Executive Officer, MetricStream. “It’s time for leaders to manage, embrace, and thrive on risk by breaking down silos and implementing a Connected GRC strategy that becomes a single source of truth to make more strategic business decisions.”  

ConnectedGRC is powered by MetricStream Intelligence which includes embedded best practices, deep domain capabilities, artificial intelligence (AI) powered real-time insights, and risk quantification capabilities. Designed to address the primary challenges for today’s GRC professionals, ConnectedGRC offers three distinct product lines with a rapid time to value: BusinessGRC, CyberGRC, and ESGRC. 

  • BusinessGRC: Get a connected view of risk and collaborate seamlessly across Risk, Compliance, and Audit teams; harness combined insights into a strategic advantage for business growth, competitive edge, and brand differentiation.  
     
  • CyberGRC: Gain real-time visibility and quantified risk insights across IT, Cyber, and Vendor risk, helping risk professionals prioritize their cyber investments, policies, and safeguarding the organization with active cyber risk management.  
     
  • ESGRC: Enable a simplified approach towards collecting and reporting on all industry and organizational Environmental, Social, and Governance Requirements, helping risk professionals meet all ESG data, disclosure, and framework requirements and enhance customer, investor, and public brand perceptions.  

These solutions are available for organizations to buy in three preconfigured packages – Prime, Premium, and Enterprise – that offer simple pricing, flexibility, and scalability organizations require as their GRC programs diversify and grow.    

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