Andrew Dlugolenski, who helped write the report, told World Business Review there are now so many assets, and so many people living in dangerous areas, like storm tracks or beside the coast, that the economic damage from climate change is going to be huge. Mr Dlugolenski said, “the real problem will be in the Third World, in places like Bangladesh, some places in India like Mumbai (Bombay), Indonesia. These places are all the most exposed, because of their very low coast lines.”

Since this report was produced back in 2002, the global economic situation has gone through an unprescedented level of turmoil with former stalwarts in the financial sector seeking Government bail-outs and in some cases crumbling into non-existence.

Good for Business

However, despite the fnancial crisis which has dominated television reports and newspaper headlines since the Summer of 2008 – climate change has emerged as a global crisis that cannot be ignored. In 2008 the Worldwatch Institute reported that huge amounts of money are pouring into clean energy projects, carbon trading and environmental and energy hedge funds.

In recent years businesses have begun to wake up to the crisis affecting the environment across the globe. Investment in renewable energy continues to increase and carbon offsetting schemes are seeing an annual increase in capital flow.

In some cases large corporations have recognised the profitability of becoming more environmentally efficient. This has been the case for Du Pont, who had cut its greenhouse gas emissions by 72 per cent below 1991 levels by 2007, saving £1.5bn. With a stagnant economy, cutting spending looks even more attractive for businesses who have previously been used to profiting handsomley during the “boom time” years.

Global Significance

It is no longer a case of individuals acting to improve the environment. It is recognised that a concerted effort is needed by the worlds largest polluters in order to stave off the environmental impact of global warming. In 2006, Sir Nicholas Stern, a former chief economist of the World Bank, told BBC Radio 4’s Today programme: “Unless it’s international, we will not make the reductions on the scale which will be required.”

Forgotten Impact

In wealthy countries the impact of global warming may not be felt as strongly as for people living in third world conditions. This is why charities such as Oxfam engage in educational programs,  and schemes to improve sanitation and housing that help to protect people from disease in the aftermath of floods.

It has been recognised that the impact of climate change is having a significant impact on many poor commmunities around the world. This is the case in areas where drought makes it very difficult to find fresh, clean water, and other parts of world where flooding destroys homes, crops and spread disease.

In a real sense, global warming is affecting people throughout the globe – who in many cases are not responsible for the increased carbon emissions caused by modern industry. The impact on business hits many headlines, but there is another impact that is not so readily seen. – namely how global warming affects those living in poverty.

A number of reasons are given for this significant shift in investment: These include fears over high fossil fuel prices, combined with a growing realisation that they’re not an energy source which we can rely on forever. Although other factors are said to be increased governmental support for green energy sources, along with increased acceptance that anthropogenic climate change is a reality which must be addressed if global warming is to be mitigated, to any extent, before we ruin the environment which we rely on to sustain us.

In terms of actual figures the report states that investment in renewables has increased from £80 billion in 2005, to £100 billion in 2006, and it seems that investment is set to continue in the foreseeable future. Of course there are never any sure bets when it comes business investment but it seems to me that, in general, this is a sector worth looking at if one was looking to invest some money.

The UK government revealed a £500m plan to avoid long-term unemployment over the next two years.

Employers will be given an incentive of £2,500 to recruit and train people who have been unemployed for more than six months.

The funding will mainly come from the Government Treasury reserves, and will also pay for training places and advice for volunteers.

UK Prime Minister, Gordon Brown said, “today the number of long-term unemployed is around 100,000. In the recessions of both the 1980s and 90s it reached more than 1m. All our efforts must be to strive to prevent that from happening again.” – FT.com

The incentive package is aimed to ease the current uk jobs crisis. Although the 100k unemployment figure seems high, the recessions of the 1980s and 1990s saw unemployment reach nearly one million.

M&S sales were down 7.1% and full year gross margin is expected to fall to 36.85%.

Robert Peston gave an interesting insight into the situation at M&S. “This is pretty savage stuff, designed to keep the group profitable during the worst high street downturn for almost 30 years.”

As a number of well-known high street retailer ’shut-up shop’ – including Woolworths – the deepening recession sets in across Europe. The Bank of England took unprecedented action by cutting the interest rate from 2% to 1.5%, the lowest interest rate in the banks 315-year history.

Economic data from Europe paints a sorry picture, putting pressure on the European Central Bank to cut interest rates lower than the present 2.5%.

Figures from the Office for National Statistics showed UK GDP fell by 0.6% in the third quarter of 2008 ending September. This news makes further interest rate cuts look likely, along with the potential of a deeper recession an some expected.

The fall in GDP was due to a decrease in manufacturing output and weaker service output.

According to Howard Archer of IHS Global Insight, “on the expenditure side, the breakdown of the GDP was particularly unappealing with consumer spending and investment contracting and exports only edging up despite the weakening pound.” – FT.com

Meanwhile, US housing data showed a slump with a record drop of over 13% indicating that the real estate decline will extend into a fourth year and worsen the recession.

Global back office solutions enable banks and financial corporations to manage their global operations effectively, whilst minimising costs of transaction and enabling banks to offer greater value to clients with post-trade services.

The use of purpose-built cash management software enables financial institutions to better manage risk surrounding foreign currency and commodities. A cost-effective solution such as Application Service Provider (ASP) enables corporations to use an advanced cash management system that is hosted externally.

OPEC pulled back production on Wednesday in an attempt to stabilise oil prices. The oil decline was felt in the markets with the Dow Jones falling 2.5% to 8604.99 points.

According to Stephen Goddard, portfolio manager at AFBA Investments, “as long as we’re going two steps forward and one step back in this market, that’s good. But it’s going to take a long time to tell if the Fed cuts are really working. The economic situation really deteriorated in October, and you don’t recover from that sort of drop quickly.” – Wall Street Journal

Crude oil futures fell nearly 10% at $36.22 per barrel. The lowest figure since June 2004.

The fall in crude oil also led to a decline in many ETF funds. An S&P 500 energy tracking ETF fell 2.1% on the 18th as a fallout from the declining oil prices. Some analysts feel the decline in the US economy could settle after the Federal Reserve dug deep with a large interest rate cut to 0.25%.

After the initial market declines after the rate cut announcement, some recovery was seen, with US treasury bonds rising. Two-year, five-year and thirty-year bonds were up on the day.

Large corporations can find advanced corporate treasury systems solve many issues surrounding cash management solutions. Corporate treasury systems enable businesses and treasuries to reduce risk exposure and adapt to a shifting environment effectively.

It is likely that the US Fed will cut interest rates to 0.5% from 1%. With a doveish outlook, the US markets slipped, with the Dow Jones falling over 100 points to 8521.52. The S&P 500 was down 1.6% and the Nasdaq was down 2.7%.

With the expected rate cut, the US dollar fell against the euro, yen and pound. The Federal Reserve is expected to make it’s final decision on Tuesday at 2:15pm EST. The US Dollar Index shows the currency fell 1.7% against six rival currencies.

Along with the interest rate announcement, reports are expected this week from Morgan Stanley and Goldman Sachs, as well as further news on the government bailout for the Ford, Chrysler and GM.

The New York Times reports on the Lehman Brothers bankruptcy proceedings. On September 15 Lehman Brothers went into liquidation caused by debts in excess of $600bn based on derivatives and complex mortgage securities. The repercussions of which may be felt within other financial institutions for some time.

A well-appointed cash management system enables large banks, corporations and financial institutions to manage risk and increase productivity. It also enables in-house banking and transparency of group-wide cash positions.

US traders returned to the trading floors after receiving official confirmation that the US has been in recession for the last 12 months. The Federal Reserve felt the pressure with Ben Bernanke confirming that there is little room for lowering of interest rates.

Monday led to the heaviest losses in US markets since October, as the Dow Jones fell nearly 8%, the Nasdaq and the S&P500 both fell nearly 9%.

Evidence of the global recession can be seen in the price of commodities falling sharply. Light Crude Oil closed at $47.94 a barrel and gold declined $4.10 to $772.70.

Meanwhile in Europe the FTSE100 saw a 5% loss on the day and the Eurofirst300 fell 6%. The pound weakened further against the dollar to $1.4927.

Despite the losses felt by the pound against the dollar, foreign exchange trading is a popular solution for corporatations as well as retail traders to speculate on fluctuations in the global market. Corporate treasury solutions enable large institutional banks to manage risk in various areas of cash management. This includes fx trade processing, as well as interest and fluctutations in the value of commodities.

According to statistics from Eurostat, “the official report confirms the recession that many private and public sector economists had forecast for the region.” – FT.com

Meanwhile in the UK, one of the largest financial institutions, RBS, announced it will axe 3,000 jobs over the next two weeks. This is likely to affect global banking and markets divisions rather than individual high street banks.

RBS Stock Price

From the 10-day chart for RBS, we can see that today’s announcement of 3,000 job cuts has given the stock price a 3.61% boost.

With global banking getting ever-more complex and processing of various types of trades happening thousands of times per day, effectively managing such processes is important.

Running global back office solutions effectively enables large finance and banking corporations to maintain profitability amidst margin trading and the competition that has led to decreasing individual trade pricing.

In the light of the financial meltdown that has hit global financial corporations, it is increasingly important for such institutions to look at ways to increase performance to remain profitability. A selection of bank treasury software solutions enable financial institutions to minimize the need for external funding as well as cut costs across the different areas of the business.

CFD’s have been particularly popular in the UK as they are exempt from stamp duty for UK traded shares.

According to the Financial Times, CFD’s have been blamed for market volatility.

Although CFD investors can convert their contracts into stocks, there are no voting rights with CFD’s. The Financial Services Authority – which has received a lot of negative press for allowing banks to engage in risky investments – announced new measures to control CFD trades. Investors will have to disclose holdings in stocks when this breaks the three percent threshold.

At present investors can build up large stakes in businesses with CFD’s and convert them to actual stock with little warning.

Although exact details are still to be decided, final rules will be issued in February 2009.

According to Peter Montagnon, director of investment affairs at the Association of British Insurers, “companies should know who has built up a stake and investors too should be aware of what would otherwise be happening behind their backs.”

An alternative to trading CFD’s – which can be complex for the beginner – is to consider trading currencies in the foreign exchange market. Although there is likely tax implications when trading Forex, it offers a high level of liquidity. Even in volatile situations, such as the recent global credit crisis, currency trading can be an effective leveraged tool that limits exposure to the market, but can offer profits as part of a balanced investment portfolio. There are a variety of FX trading solutions available for corporations, as well as an opportunity for retail investors to dabble in the currency market, by opening a margin trading account with one of the large Forex merchants.

When considering which Forex merchant to deposit your funds, it is vitally important to choose well. There are also legal compensation factors to consider. This can vary depending on which country the trader is based. In the US, the U.S. Commodity Futures Trading Commission offers information on fraud proceedings against institutions, so a quick search can reveal information many financial companies offering FX trade processing and other derivate trading solutions.