Weekend reading: five graphs that justify the gloom

by THE INVESTOR on FEBRUARY 17, 2024

What caught my eye this week.

Ihave often been chided for being too negative over the past few years – both in comments on Monevator and elsewhere.

Just last week, regular reader SLG asked:

It might just be that my complainy pants news filter is set too high to assess the state of the nation but are you sure you’re getting a balanced reading breakfast to keep your glass topped half way up @TI?

That was in response to a post where I was indeed being negative about the returns from investing lately – once you excluded the big gains from the so-called ‘Magnificent Seven’ US tech giants.

Well, investing returns – equities and bonds alike – have been mediocre-to-bad since I first got negative in late 2021 and then more so. Especially once you adjust for inflation.

I do understand this is in on top of my multi-year negativity about the rubbish results from Brexit, though.

Eeyore stories

Let’s be clear. I wholeheartedly agree there’s plenty of great stuff going on in the world, from new vaccines to the renewable energy cost collapse to the ongoing joys of K-Dramas.

But (geo) politically and economically it’s been rough sledding. Better, in some respects, than it might have been, especially when it comes to the US economy. But thin gruel elsewhere at best, and war at worst.

Here are five fairly random graphs I came across just this week that shine light on the gloom.

Graph #1 from: Britain has been reduced to Trabant-status among the West

In this Telegraph article the author rightly accuses the British State of self-harm against its own economy and citizens, but studiously avoids mentioning Brexit as one of the causes. (See Goldman’s latest estimate on the damage from Brexit in the links below).

Anyway his graph illustrates why workers feel they’ve not gotten any richer for many years.

It’s because they haven’t. That’s a fact, not me being negative.

Graph #2 from: UK economy falls into recession

Here we see the UK economy has stagnated for two years – and was in recession for the second half of 2023.

That’s a fact, not me being negative.

Graph #3 from: What is the UK inflation rate and how does it affect me?

Households are living through the worst inflation shock for generations. January inflation unexpectedly held steady – a small rise was forecast – which was welcome. But inflation is still double the official target rate.

Inflation should fall fast from here (more global strife notwithstanding).

But the pain is real and it will have lasting consequences.

Graph #4 from Where UK house prices officially fell the most in 2023

Falling house prices are good news from the personal perspective of priced out would-be buyers. You can argue too that a permanently lower level of prices would help the economy, by aiding mobility or redirecting investment to more productive areas.

Nevertheless, their own home is many people’s biggest investment and asset. Lower prices make them and the country poorer.

Property prices fell in 2023 as mortgage rates leapt higher.

That’s a fact, not me being negative.

Graph #5 from Decarbonsation, an annually-updated presentation by analyst Nat Bullard

You may be a Blimp-ish climate change denier – aka scientifically wrong – but for the rest of us, this is grim viewing.

Happily there’s far more positive visuals showing progress in the fight to curb carbon emissions if you click through the rest of Nat’s presentation.

But that’s for the future. Right now things are bleak.

https://monevator.com/

Body Shop Collapse Shows ‘Ethical’ Branding Is Not A Free Pass To Success

 17TH FEBRUARY 2024 /SUBEDITOR

The Body Shop has become the latest casualty of the British high street. The familiar sight (and distinctive smell) of its stores is under threat after the UK arm of the business went into administration, writes Kokho Jason Sit.

A success story for almost 50 years, The Body Shop started out as a small enterprise in Brighton, a UK seaside town. From there, its founder Dame Anita Roddick championed “ethical” trading, opposition to animal testing, and excessive use of packaging for beauty products.

But being perceived as an ethical brand over five decades is not easy. A selling point which once made The Body Shop stand out can lose its sparkle when it does not evolve in line with changing market conditions and consumer expectations.

Claiming to be ethical has now become a popular approach for a wide range of modern businesses. You can drink ethical coffee as you feed your cat ethical pet food, while you both enjoy the warmth provided by an ethical energy supplier.

Complacency and remaining static is not an option for a successful skincare company – or any retail brand, for that matter. The Body Shop’s demise illustrates the adverse consequences of not adapting or innovating its ethical branding.

And research suggests that to be considered truly ethical, a brand needs to show it cares about people. This means treating employees and customers well, but can also mean reaching out to improve the lives of people who never encounter its products.

British supermarkets have proved much more more skilful at this in recent years. How often do you hear about a skincare or beauty brand setting up food donation points, appointing “community champions” (like Morrisons), or partnering with charities (like Tesco has with the British Red Cross)?

These are ethical initiatives that genuinely help people in need, while also giving shoppers an extra reason to spend money with the shops involved.

Our recent study indicates consumers tend to judge businesses that claim to be ethical in terms of their commitment to this kind of caring attitude, as well as fairness and honesty. This supports previous research that shows an emergent consumer focus on morality.

Unlike The Body Shop, a few skincare brands have had the foresight in recent years to emphasise caring for people in their branding, and been successful in solidifying their ethical image.

These include Dove and its Real Beauty campaigns, and the Boots brand No7 with its Future Renew product range targeting women aged from 30 to 75, which aims to restore damaged skin and maintain a natural appearance without resorting to cosmetic procedures.

No7 also partners with Macmillan Cancer Support to help women with cancer “look and feel like themselves”.

Similarly, Lush’s more prominent ethical standpoint appears to be centred on its employees’ craftsmanship, wellbeing and pride. The company states: “We believe in happy people making happy soap, putting our faces on the products and making our mums proud.”

But The Body Shop’s demise is not just about its ethical stance. Commentators have argued that the company failed to innovate its product range, was not competitive enough on price, and ignored rivals such as Lush and Origins.

Not quite gelling

Nor could the company control the challenging economic conditions of the last few years, which have proved disastrous for all sorts of retailers. When spending power is squeezed by inflation and rising interest rates, consumers tend to rethink their shopping habits in favour of affordability.

That may explain the proliferation of cheaper beauty and personal care products for sale in supermarkets.

Overall then, a combination of factors has led to The Body Shop’s downfall in the UK. As a retail researcher and avid user of skincare products, I am genuinely sad to be writing about its current state.

The Body Shop was a pioneer of ethical branding, an iconic British company which drew people to the high street, offering unique products that allowed customers to pamper themselves and the environment. But it may be that after 48 years, it failed to properly look after itself.

Kokho Jason Sit is Senior lecturer in Marketing, Associate Head (Global), University of Portsmouth. This article is republished from The Conversation under a Creative Commons license. Read the original article.

The secret moves tech giants use to manipulate stock prices

Bogdan Stojkov

FINANCEFeb 16, 2024

In finance, tech giants’ maneuvers wield significant influence over stock prices. Behind the veneer of innovation and disruption lie intricate strategies designed to sway markets and maximize profits. From strategic announcements to calculated acquisitions, different tactics are deployed to shape investor sentiment and drive stock prices. In this piece, we take a look at some of them.

Strategic announcements

One of the most common tools that tech giants deploy when manipulating stock prices is carefully orchestrating the unveiling of a new product or service. Namely, the mere whisper of a groundbreaking innovation can send ripples through the stock market, triggering frenzied buying or selling.

Companies time announcements to coincide with favorable market conditions, exploiting investor psychology to amplify the impact on stock prices. Hence, regardless if it’s the unveiling of the latest smartphone or a new technology like artificial intelligence or blockchain, these events are well-choreographed to generate hype and bolster shareholder confidence.

Strategic acquisitions

Another tactic favored by major tech players is the strategic acquisition of promising startups or established competitors. In essence, these maneuvers serve multiple purposes—from eliminating potential threats to augmenting existing product portfolios. However, their impact on stock prices extends beyond the immediate implications of the deal itself.

By signaling their commitment to growth and innovation through strategic acquisitions, companies can signal their strength and resilience to investors, boosting confidence and driving up stock prices. Moreover, the strategic integration of acquired assets can unlock synergies and fuel future growth, further enhancing shareholder value over the long term.

Share buybacks

Tech giants also leverage their vast resources to engage in share buybacks—a practice in which companies repurchase their own shares from the open market. 

While seemingly aimed at returning value to shareholders and signaling confidence in the company’s prospects, share buybacks can also serve as a covert mechanism for manipulating stock prices. Namely, by reducing the number of shares outstanding, companies artificially inflate earnings per share, a key metric used by investors to gauge profitability.

Share buybacks can create a perception of financial strength and drive up stock prices, even in the absence of underlying improvements in business fundamentals.

For instance, Apple (NASDAQ: AAPL) announced a $90 billion share repurchase program last year, signaling confidence in its financial strength and driving up its stock price. Still, it wasn’t the only major company to do so, with many others doing the same.

Playing the system

Tech giants aren’t averse to exploiting regulatory loopholes or engaging in dubious accounting practices to manipulate stock prices. Whether it’s exploiting tax havens to minimize tax liabilities or engaging in creative financial engineering to inflate reported earnings, companies often resort to sneaky tactics to bolster their stock prices

While these maneuvers may yield short-term gains, they can erode trust and credibility over the long term, undermining investor confidence and exposing companies to regulatory scrutiny and legal repercussions.

Shaping the narrative

In addition to the previously mentioned tactics, the big tech guns also wield considerable influence over stock prices through more subtle means, such as strategic communications and media manipulation.

By cultivating relationships with influential journalists and analysts, companies can shape the narrative surrounding their stock and influence investor sentiment. Whether it’s planting favorable stories in the press or orchestrating exclusive interviews with top executives, these efforts can subtly sway public perception and drive stock prices in the desired direction.

Market manipulation

Lastly, we should mention that tech giants aren’t above resorting to outright manipulation of market mechanisms to engineer favorable outcomes. From spoofing and layering to pump-and-dump schemes, companies can exploit vulnerabilities in market infrastructure to manipulate stock prices for their own gain.

While regulatory authorities have stepped up efforts to combat such practices, the ever-evolving nature of financial markets presents a formidable challenge in detecting and deterring such illicit activities.

There have been various instances of tech companies facing allegations of market manipulation. For example, Tesla (NASDAQ: TSLA) and its CEO Elon Musk have been the subject of scrutiny for their tweets and statements that have led to significant fluctuations in Tesla’s stock price, raising questions about potential market manipulation.

The bottom line

The nature of financial markets provides ample opportunities for tech giants to manipulate stock prices to their advantage. Whether through strategic announcements, calculated acquisitions, or covert tactics, the big players leverage their immense resources and expertise to shape investor sentiment and drive stock prices in their favor.

While the mentioned tactics may yield short-term gains, the long-term consequences of such manipulative practices can be far-reaching, undermining market integrity and eroding investor trust in the process. As regulators and market participants grapple with the challenges posed by increasingly sophisticated forms of market manipulation, the battle to preserve the integrity and transparency of financial markets rages on.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

IRELAND

Calls for zero tolerance to wildlife crime

Senator Lynn Boylan made the call for a zero tolerance approach to wildlife crimes, such as disturbing bats, illegal hare hunting, badger baiting and the destruction of habitats.

SAT, 17 FEB, 2024 - 10:41
RAY RYAN

A zero-tolerance approach to wildlife crime has been sought following claims in the Senate that the State has failed to adequately enforce existing laws and policies to protect biodiversity.

Senator Lynn Boylan, who made the call, said wildlife crimes, such as disturbing bats, illegal hare hunting, badger baiting or the destruction of habitats that provide clean water, clean air and healthy soils, all contribute to biodiversity loss.

“Weak enforcement in this country is sending the clear message that wildlife crime is tolerated and is not taken seriously.

“Unfortunately, despite some high-profile cases of illegal wildfires and poisonings, there has been a failure to crack down on wildlife crime in any meaningful way,” she said.

Senator Boylan said records show that between 1977 and 1987, there were 752 cases, an average of 75 prosecutions per year.

However, only 118 wildlife crime cases have closed successfully since 2020, an average of 39.3 per year.

“This is a drop of 48% in prosecutions per year. This is not because the crimes are not happening, unfortunately,” she said.

Senator Boylan said the subject was not in the portfolio of Minister of State Mary Butler, who was scheduled to reply to the debate.

She said Minister Butler would more than likely cite a year-on-year increase of 39% from 2022 to 2023, which is up to 43 prosecutions.

“While that is a step in the right direction, we are starting from a very low level. This is, therefore, an example of shifting baseline syndrome,” she said.

She recalled that in the 1980s, a target of 200 was set for the number of prosecutions per year. It was not reached, given the average of 75.

Senator Boylan also noted that the recently launched national biodiversity action plan does not contain a specific target for prosecutions.

Instead, it just has the vague ambition to seek to increase compliance with wildlife legislation in cooperation with agencies through enhanced detection, enforcement and awareness raising.

With Palestinian laborers shut out of Israel, Indian  (HINDUTVA)  workers line up for jobs there

FEBRUARY 17, 2024

Omkar Khandekar

Diaa Hadid

Indian men line up at a registration office set up in a technical college in the northern Indian city of Lucknow, where they hope to sign up to work in Israel.

Diaa Hadid/NPR

LUCKNOW, India — A devotional song blares from a Hindu temple as dozens of men cram in line for the chance to register for work in Israel. But mostly what the men hear are orders. An official directs them to a warehouse-style waiting room if they haven't already signed up. As the men jostle to get to the head of the line, a security guard orders them to sit down on the ground. "Do it like gentlemen," the guard orders. "No need for mischief!"

This unruly line outside a vocational training center in the northern Indian city of Lucknow is more than 2,700 miles away from Gaza — and it spotlights the many ways the war between Israel and Hamas is affecting life around the world.


Thai farmhands in Israel face a grim choice: work in a war zone or go home to poverty

Israel suspended the work permits of most Palestinian laborers after Hamas-backed militants attacked Israel on Oct. 7, killing more than 1,200 people and taking 240 hostages, according to Israeli authorities. That triggered the latest war between Israel and Hamas in Gaza, where more than 27,000 Palestinians have been killed since Oct. 7, according to Gaza health officials.

Palestinian laborers formed the backbone of Israel's construction sector. After the work permit suspensions, most building sites lie idle.

"We don't bring in Arabs from Judea and Samaria because it is a security risk," said Israeli Finance Minister Bezalel Smotrich, using a biblical term to describe the Israeli-occupied West Bank. This is what prompted Israel to look for "alternatives," he said during a Feb. 4 news conference.

India appears to be one of those alternatives.

Haim Feiglin, the deputy president of the Israel Builders Association, told Voice of America soon after the war began that the association was hoping to bring in anywhere from 50,000 to 100,000 workers from India. "Right now we are negotiating with India. We are waiting for [the] decision of the Israeli government to approve that," he said in an interview on Nov. 1.

Barely two months later, the northern Indian states of Haryana and Uttar Pradesh each advertised 10,000 jobs for skilled laborers in Israel. According to an advertisement issued by the Haryana state government, the Israeli recruiters seek carpenters, blacksmiths, tilers and plasterers.

Those selected after on-spot interviews and skill tests will receive a monthly wage of more than $1,600, more than five or six times what they would receive for the same work in India.

Among the men hopeful for jobs in Israel is Ram Kumar, a 36-year-old carpenter who traveled more than 150 miles to register in Lucknow. On a recent damp, cold morning, he tells NPR it's his third day waiting in line. "I have two kids, a wife and a father to look after," he says.

He is still at the back, with hundreds in front of him. The sheer number of job seekers over the previous two days means by the time he gets close to the registration desk, officials will call it a day, he says.

Kumar has spent nights at a cousin's home nearby. He says others are sleeping on nearby pavements, on the platform of the nearby railway station and even in an abandoned lot between buildings.

An Indian man holds up a registration form to work in Israel. He was recently at a registration office in the northern Indian city of Lucknow after two Indian states, Haryana and Uttar Pradesh, recently announced they were seeking to recruit 10,000 skilled laborers each to Israel.

Diaa Hadid/NPR

Nearby, Bahadur Singh is also applying to work in Israel, even though he's nervous. "We've heard there are lots of bombs and missiles being thrown around," he says.

"Then don't apply if you're so worried!" snaps an eavesdropping fellow candidate.

But the promise of better compensation is too strong a draw.

"I want to give my children a better life than me," Singh says.

India's foreign ministry has not said whether the men will be sent to areas close to conflict zones, but a spokesperson noted that Israel generally has robust worker protections.

Singh says he was motivated to apply because this recruitment drive comes out of a deal between the Indian and Israeli governments, and a government-to-government deal meant he wasn't risking being fleeced by employment agents — that happened to him a few years ago. "Fraud, sir, fraud," he says, shaking his head.

He says he paid an agent his life savings, $600, on the promise of a job abroad. Then the agent disappeared. It's a common story for Indians seeking work abroad.

Israel and India inked the deal to send Indian workers last May. It was seen as a way of regulating labor between the two countries, which has been growing over the years. Indian skilled laborers and care workers in particular seek employment in Israel because of its relatively high wages. But Israel remains a small market for expatriate Indian labor compared with the Gulf region, for instance, where an estimated 9 million Indians work.

The rush for wide-scale recruitment to Israel began in earnest after the conflict erupted between Israel and Hamas.

Indian trade unions see the current recruitment as an effort to replace Palestinians who have lost their livelihoods following the outbreak of war.

"Nothing could be more immoral and disastrous," said a statement in November by 10 unions, mostly representing construction workers. "Such a step will amount to complicity on India's part with Israel's ongoing genocidal war against Palestinians."

Members of the Congress party, the chief opposition to the Hindu nationalist ruling party, also criticized the decision to allow Indian workers to be sent to Israel.

"What are we essentially saying by doing this?" asked Praveen Chakravarty, a political economist affiliated with the Congress party. "We are essentially saying, don't worry. Even if you attack Palestinians and you do not have Palestinian labor, we will supplement that. That is direct intervention."

A government official who spoke on condition of anonymity because he was not authorized to speak to the media on this subject told NPR that the recruitment drive was "never intended to replace Palestinian workers in any sector."

But he acknowledged the rushed recruitment drive could be related to the current conflict. "It is possible that some fresh recruitment is being done due to reasons completely internal to Israel," he said.

Navtej Sarna, a former Indian ambassador to Israel, says the deal demonstrates the strength of the India-Israel relationship. "It shows the two governments are comfortable working with each other, and this is something which has built up over the last 30 years," he says.

Before that, India was a prominent ally of Palestinians. It established full diplomatic relations with Israel only in 1992.

At a registration center in Lucknow, Indian men submit their data, as recruiters seek thousands of skilled laborers to work in Israel.

Diaa Hadid/NPR

India is now one of the biggest customers of Israeli weaponry.

Many Hindu nationalists in India see the two countries as ideologically aligned, and like it that way.

"I love India — I love Israel," says Manoj Sharma, a 26-year-old carpenter who says he has been waiting two days in line to register in Lucknow.

Sharma identifies himself as a supporter of Indian Prime Minister Narendra Modi, a Hindu nationalist who has bought the country even closer to Israel during his decade as prime minister.

Sharma says he himself is even willing to fight for Israel against a common enemy.

"Hamas killed innocent people. It was wrong," he says. "Palestinians have lost their chance to work in Israel."

He says Indians can do it now.

Alon Avital contributed reporting from Israel.

UK

Divesting from businesses involved in Palestine would ‘breach legal guidance’, council says

By Noora Mykkanen,

 Local Democracy Reporter

 | Monday 12 February 2024

HACKNEY CITIZEN

Protesters call for divestment last week. Photograph: Noora Mykkanen

Hackney Council says its hands are tied over its pension fund’s investment in “business activities in the Occupied Palestinian Territories”.

A string of protests have interrupted Town Hall meetings in recent months as campaigners urge the council to take a stand in the Israel-Palestine conflict.

They want the pension fund to divest from firms such as Israeli defence company Elbit and construction giant Caterpillar.

Organisers of the protests, the Palestine Solidarity Campaign, allege the fund has £30m invested in such companies – compared to the council’s figure of £2.02m.

The fund has passive investments worth £1.9m in “companies conducting business activities in the Occupied Palestinian Territories”, pensions committee chair Cllr Kam Adams said previously.

It also has a holding in Elbit Systems, which was worth £25,700 in June.

However, the fund does not “directly own any stocks or shares in individual companies”, Cllr Adams told the Citizen following a protest on 7 February.

“All of the fund’s equity investments are held indirectly; the Hackney Pension Fund owns units in externally managed pooled investment funds which in turn own the underlying investments,” he reiterated.

The only way to divest from the stocks listed would be to dispose of the investment fund and find an “alternative solution which would guarantee exclusion of those companies”, he said.

“This would expose the Hackney Pension Fund to significant costs resulting from both the transition of assets and the requirement to use a highly customised investment strategy.”

“The committee believes that commitment to the form of divestment requested by the Palestinian Solidarity Campaign would risk financial detriment to the fund and would breach Law Commission guidance,” Cllr Adams said.

He added that while environmental, social and governance factors, including human rights issues, are “important considerations” in investment decisions, the pensions committee is legally required to “ensure the fund generates returns to keep paying the pensions that thousands of former council employees rely on in their retirement”.

Divesting from Russia

The council’s pension fund was able to pull out from Russia because the legal and foreign policy landscape changed after the war in Ukraine.

The international sanctions against Russia meant “clear long-term financial concerns associated with the assets”, Cllr Adams said.

After the UK government imposed sanctions on Russia, the divestment decision became lawful.

Unlike the passive investments, assets in Russia were held in an “active equity portfolio”, meaning the manager of the fund could divest from individual stocks without the need for the Hackney Pension Fund to dispose of its entire portfolio, Cllr Adams explained.

The requested divestment is held through funds that track an index, whereby the manager has “no ability to remove individual stocks from the portfolio”.

Adams added: “Divesting from the assets requested would require the fund to completely dispose of two large investment funds with a total value of over £350m. This would expose the fund to significant costs as set out above.”

The pension committee expressed its “sorrow at the ongoing conflict and for the many lives lost as a result of the hostilities”.

Adams said: “The violence has had a devastating impact on so many innocent people, and it is vital that the international community makes all possible efforts to push for a swift and peaceful resolution of this terrible conflict.”

 

Companies twice as likely to publish sustainability data after investor engagement

 

By Jack Gray

 12/2/24

Companies that have been in dialogue with investors are more than twice as likely to disclosure their sustainability data than unengaged firms, the CDP’s Non-Disclosure Campaign (NDC) results report has shown.

The campaign, which was supported by 288 financial institutions in 2023, directly engaged with 1,590 companies from a list of non-disclosing corporates, requesting that the companies disclose their climate, forest and/or water impacts through CDP.

Overall, 317 companies disclosed after engagement by investors, comprising of 221 (19.5 per cent) companies disclosing on climate change, 58 (14 per cent) on forests, and 66 (14.3 per cent) on water security.

Companies that were engaged with were 2.2 times more likely to disclose data than the control group of 4,421 firms that did not participate in the campaign.

Those targeted by the NDC were 6.8 times more likely to disclose on forests, while companies in Europe and Asia (excluding Japan) engaged by investors were three times more likely to disclose data.

CDP stated that direct engagement was vital and the campaign could be a catalyst for long-term change, and that persistence from financial institutions brought results.

Commenting on the findings, CDP associate director, UK capital markets, Sebastian O’Connor, said: "As we delve into the progress achieved through the 2023 CDP NDC, a critical takeaway is that persistent direct engagement continues to play a vital role in fostering transparency and accountability on environmental impact.

“Although CDP sent a massive disclosure request to more than 15,000 corporates on behalf of 740+ signatories in April 2023, this indirect request to disclose can only go so far.

“For companies reluctant to produce fulsome and transparent environmental disclosures according to a standardised framework, we must work directly with our signatories to push for action.”

Danish pension company and NDC participant, Sampension, noted that companies were significantly more likely to publish data after engagement. Sampension head of ESG, Jacob Ehlerth Jørgensen, commented: "As an investor, we must of course contribute to companies moving in a more responsible direction.

“But in order for us to be able to relate to the companies' behaviour, we first need to have proper data, and here it is far from all companies that report on their own initiative.

“In this connection, initiatives where investors engage in dialogue with the companies to bring the relevant data to light have proven to be an effective tool, and that is a positive thing to say the least.

"However, as the figures from the campaign also show, there are still many companies where there is room for improvement when it comes to transparency around data.

“But here it is important to understand that the dialogue path is not a quick-fix solution that creates changes in companies overnight.

"It shows that it takes patience and persistence to push companies in a more responsible direction. But our experience is also that, as an investor, you can generally make a bigger difference in companies through dialogue and active ownership than by simply selling.”

RISE IN DEMAND FOR FERTILITY AND FAMILY HEALTH BENEFITS

FEBRUARY 17, 2024
LEILA THABET - MAVEN CLINIC

In 2024, employers are juggling an ever-widening range of demands, from record-high healthcare costs, to evolving hybrid work policies, and an increasingly age-diverse workforce. More companies are charting a path forward with women’s and family health benefits that attract and retain talent of all ages and help manage costs.

The third annual State of Women’s and Family Health Benefits report* – providing a forecast for global fertility and family benefits trends in the year to come – draws on responses from over 1,200 HR leaders and 3,000 full-time employees across the U.S. and the UK. The report provides employers with the insights needed to yield value from their benefits investments and attract top talent.

In 2024, employers are juggling an ever-widening range of demands, from record-high healthcare costs, to evolving hybrid work policies, and an increasingly age-diverse workforce. More companies are charting a path forward with women’s and family health benefits that attract and retain talent of all ages and help manage costs.

Key findings from The State of Women’s and Family Health Benefits report in the UK include:Family benefits can make or break a career decision. 71% of UK employers say reproductive benefits are important for retention, and 58% of employees have taken, or might take a new job because it offered family or reproductive health benefits.

Menopause benefits becoming popular – A quarter of employees think that menopause care is an important benefit.

Virtual care complements return-to-office policies – over half (57%) of employees say access to virtual healthcare would make it easier for them to work in person.

A quarter (26%) of employees say having a benefit that prepares them to have a family (i.e. preconception genetic testing, learning about ovulation and sperm health) would influence them to take a new job.

Employers are prioritising family benefits – 65% of UK employers say that reproductive and family benefits are important or very important for attracting employees.

47% of UK employers plan to increase their family health benefits offerings in the next two to three years

“In today’s ever-changing landscape of HR demands, family benefits are a North Star for return-on-investment. It’s no surprise that more and more families are demanding fertility coverage, and employers are listening,” said Kate Ryder, founder and CEO of Maven Clinic.

Download the full data report here.

Employers should double the amount they contribute to your pension, experts say

A report from the Resolution Foundation also calls for more flexible pensions - that people can access before 55

Many workers don’t engage with their pension (Photo: Brian A Jackson/Getty Images/iStockphoto)

By Callum Mason

Money and Business reporter

February 12, 2024 

Employers should be forced to up the amount they pay into their employees’ pensions from 3 per cent to 6 per cent, according to a report.

Auto-enrolment contributions – the amount that automatically gets paid into a worker’s pension by default – should increase from 8 to 12 per cent, according to Precautionary Tales, a paper from the think-tank, the Resolution Foundation.

Currently, employees have to contribute 5 per cent and employers 3 per cent, but the report said this should be changed to 6 per cent each – meaning employers would be doubling the amount they put in.

Employers are allowed to offer more generous schemes, but many just offer the minimum allowed.

These 12 per cent contributions should include a 2 per cent contribution into an easy-access “sidecar savings” scheme of up to £1,000, according to the report, which it said would “revolutionise” the number of families with “rainy day” savings in the same way that auto-enrolment has transformed pension saving.

At the moment, people cannot usually withdraw from their pension savings before they reach 55 unless they are terminally ill, and this will rise to 57 by 2028.

The report said the UK system was “unusually” strict and the Government should offer savers more flexibility, as other countries do.

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It proposes allowing savers to borrow the lesser of £15,000 or 20 per cent of the value of their pension pots to deal with financial challenges.

These loans would be paid back via higher contributions directly into their pension pot at a later stage.

This more flexible approach already works in the US, where about one in five participants in pension plans have a loan against their pension at any one time, and around 90 per cent of these loans are repaid to their own funds in full and with interest.

Former pensions minister Sir Steve Webb said at the launch of the report that when he was in his ministerial role he gave short-term saving “almost no thought.”

“This risks being a fragmented area of Government, so what I like about this report is it’s saying that people have holistic problems, and ‘wouldn’t it be nice if we tried to solve them holistically?'”

Molly Broome, economist at the Resolution Foundation, said: “Families across Britain face a triple savings challenge – not saving enough for rainy days, bigger life events, or for a decent income in retirement.

“One in three families in the country have less than £1,000 in savings – which left many people exposed during the cost of living crisis – while around 13 million individuals aren’t saving enough for an adequate income in retirement.

“We can address all three challenges by building on the success of pensions auto-enrolment to opt more people into both easy access and long-term saving.”

Broome added people should have more flexibility over their pension pots, as other countries do, in order to help them with difficult circumstances.

“These reforms will improve families’ financial resilience during their working lives and into retirement too.”

 

Asset managers to begin downplaying ‘ESG’ abbreviation

 

By Adam Cadle

 14/02/24

Asset managers are to begin downplaying the abbreviation ESG in favour of similar, “but less controversial” terms like “stewardship”, Coalition Greenwich has said.

In its Top Trends in Asset Management for 2024 report, Coalition Greenwich said the ESG label is drawing fire in the US, particularly with new state laws banning the use of ESG criteria by some state entities, and is also now taking on a much more prescribed, legal meaning in Europe.

“Developing a universally acceptable approach to ESG will be a critical strategic priority for any asset managers operating across these regions,” the Coalition Greenwich added.

“For that reason, in 2024, we expect growing numbers of asset managers to seek out a middle path that enables them to meet the expectations and requirements of institutional investors who have implemented ESG into their investment processes and portfolios, while also demonstrating strict adherence to fiduciary responsibility.”

When asked about the differentiators influencing decisions to work with asset managers in an ESG capacity, 33 per cent of institutional investors said it is very influential if a manager has robust stewardship or active ownership policies and practices in place.

This story was originally published on our sister title, Insurance Asset Management.