Phoebus Software partners with Make Good Grow

Phoebus Software Limited (PSL) has teamed up with Make Good Grow, which is a charity matching service that brings charities and skilled volunteers together.

Make Good Grow introduces skilled volunteers, which they call Passioneers, to local good causes who need help in running their charity.

Passioneers can choose how much or little of their time they wish to give such as an hour, a day, a week or more. The type of skills charities needs help with include graphic design, web development, fundraising, HR, advertising, marketing, administration and IT.

It’s a win/win for both parties as the charities are getting experienced people working for them for free and the Passioneers are contributing to their local community.

PSL has a strong Corporate Social Responsibility (CSR) ethic which is embedded within its Environmental, Social and Governance (ESG) strategy. The mortgage servicing technology firm is keen for its staff to volunteer in the local community and becoming a Passioneer is one more option for them.

Richard Pike, sales and marketing director of PSL, commented: “As a company we have pledged to maintain our long-term commitment to good causes, not just in fundraising but encouraging staff to help out within the local community.

“Our people have a diverse range of skills and their knowledge is invaluable for many of these charities, which rely on volunteers – or Passioneers in the case of Make Good Grow.

“We have high employee engagement in charity, community and environmental activities with 77% of our staff becoming involved last year. Our new partnership with Make Good Grow gives colleagues another option but this time to utilise their work experience and skills for the greater good.”

Managing director at Make Good Grow, Rob Langley-Swain, said: “Make Good Grow is a social enterprise on a mission to help good causes to thrive. We do that by partnering with amazing businesses like Phoebus Software, who are committed to giving back and engaging their workforce in meaningful skilled volunteering.

“We help businesses go beyond the traditional sense of volunteering on things like litter picking and fence painting. We get them to utilise their professional skills on tangible and measurable projects that deliver real value to the good causes being supported.

“Phoebus Software has been brilliant at rolling up their sleeves and helping good causes with a variety of tasks, including HR advice and podcast editing. We can’t wait to see what they continue to do for our community.”

Cost of borrowing warning as overdraft rates surge to record highs; credit card rates back to the 90s

Data covering quoted household interest rates on consumer credit products released by the Bank of England this week reveal the rising cost of borrowing for UK households according to analysis by Freedom Finance, one of the UK’s leading digital lending marketplaces.

With the Bank hiking interest rates by 0.25bp last Thursday and inflation expected to show a climb yet again for April, the data demonstrates the difficult decisions many families face with their money particularly those less able to rely on cash buffers.

Overdraft interest rates have surged since the start of the pandemic rising 62% from 20.99% in February 2020 to 34.07% in April this year, the highest level since the data series began in 1995. The latest UK Finance data2 also reveals that overdraft balances have worryingly started to increase through 2021 indicating growing stress on household budgets.

Credit card rates were broadly level with overdrafts until the pandemic hit. However, while they are rising more slowly and have dipped slightly of late, they have still edged back to levels last seen in the late 1990s. Rates were 21.40% in April 2022 and have been approaching 22% – a barrier which has not been breached since December 1998.

The cost of borrowing on £10k personal loans bucks the trend and remains well below historic levels at 3.96% although it has shown recent signs of growth in ticking up from a low of 3.37% in September 2020.

David Hendry, Chief Marketing Officer at Freedom Finance, one of the UK’s leading digital lending marketplaces, commented: “The rise in overdraft and credit card rates are a further wake-up call for households in the UK that it is not just mortgage borrowing that will become increasingly expensive in the near future.

“Overdrafts have become a hugely expensive way of borrowing with rates surging above 30%, despite being broadly in line with credit card rates until the pandemic hit. Overdraft balances have been starting to increase again of late and this will be an important trend to monitor as the cost-of-living crisis unfolds, and we would urge households to see if they can transfer existing balances to cheaper forms of debt.

“There has been a recent spike in credit card borrowing too according to the Bank of England but rates are increasing here also and could soon reach their highest level in over 20 years.

“As a result, we are expecting to see an increase in demand for lower-cost personal loans as households look to manage their finances and consolidate these higher-cost forms of borrowing into products with lower rates.

“After paying down their most expensive debt, the next priority for households should be shopping around when looking at credit and using digital marketplaces to ensure they are applying for products they are eligible for at the very best rates to avoid harming their credit score through failed applications.”

Money still main job motivator, poll finds

A good salary is still the most important consideration for the majority of people when looking for a job, a new survey for recruitment specialist Pertemps has revealed.

Just under half of respondents (43%) said it was the main motivator when seeking their next role.

However, a company’s culture and values are now the  second most important factor, with 35 per cent citing this as their primary concern, giving organisations a clear steer on how to build their recruitment strategies.

“It is perhaps no shock that salary remains the biggest motivator for most people,” said Tracy Evans, HR Director at Pertemps Network Group, based in Meriden, Warwickshire.

“However, what is more surprising is how close behind culture and values are. We all know that people like to align themselves with brands that they feel an affinity with or share the same ethos, but the fact that so many people are valuing this so highly does speak volumes about candidates out there.

“It gives employers an important steer in the current employment market, where we have a vacancy vacuum and candidates who have more choices than ever before. It is not just about the package, it is about how the company is run, how it presents itself and how socially conscious it is.

“If you want to attract and retain the best talent, you have to be the best business you can be.”

It was widely reported during lockdown that employee benefits had climbed the ranks in terms of importance to people looking  for a new role. The results from the Pertemps poll though, show benefits were a key job motivator for just six per cent of people. Career progression was the most important consideration for 17 per cent.

Tracy added: “For a while, during the pandemic, there was much more of a focus on benefits and how that amplified the financial package of a role. That does seem to have receded now though.

“In the new working environment, companies must work with recruitment specialists on long-term recruitment and retention strategies rather than seeking knee-jerk staffing solutions when there are vacancies.

“Only by offering the right roles at the right remuneration from an organisation that has a clear sense of identity, social purpose and culture of inclusivity and support will you be able to attract the best people who are the right cultural fit.”

Pertemps is the UK’s largest independent recruitment firm, with 200 offices across the country.

Countrywide Surveying Services appoints Associate Director of Corporate Relationships

Countrywide Surveying Services (CSS), one of the leading suppliers of valuation panel management services, has appointed Jayne Coppinger as Associate Director of Corporate Relationships.

Jayne joins CSS from Landmark and will be joining the Corporate Business Team reporting to Sally Young. She has worked in the property industry for 18 years, starting her career at Rightmove where she managed the relationship with the National House Builders.

Jayne spent the past 8 years at Landmark Valuation Services, overseeing lender relationships and supporting the end to end valuation process, including incorporating environmental and property data to assist with property risk management and climate change portfolio reporting.

Matthew Cumber, Managing Director at Countrywide Surveying Services, commented: “Jayne has vast experience across many aspects of the property market and this accumulated knowledge will be integral in her new role and in maintaining and strengthening our corporate relationships. As a business, we are passionate about developing purposeful strategic partnerships to help diversify and fulfil the evolving needs of our clients and their customers. I’m sure that Jayne will prove to be a great asset to them and our team.”

Jayne Coppinger, Associate Director of Corporate Relationships at Countrywide Surveying Services, added: “I’m looking forward to my new role as this provides me with the perfect platform to strengthen the existing relationships I have within the lender community. Having worked alongside CSS for several years, I have a good understanding of the culture and appreciate the positive reputation the company has built. The team are enthusiastic and dedicated to client relationships, values I fully stand by and I look forward to adding further value to the proposition moving forward.”

Beat the Heat: Six tips on how to stay cool when working from home!

From May 5, it looks as though temperatures will start to heat up and it is hoped that dry, sunny spells will continue throughout this nine-day consecutive period. Parts of the South East and London are predicted to enjoy the hottest temperatures and will see the mercury hit 18-20C.

Google searches for ‘9 day heatwave’ in the UK since last week have increased by a whopping 3,800%!

As much as this weather is truly appreciated by Brits, a lot of us are still working from home without the joy of the office air-conditioning. To help, tech experts at Fasthosts.com have revealed some necessary precautions to help you keep cool and carry on working from home in the summer heat.

Top tips for staying cool when WFH and protecting your tech equipment from the heat!

1. H2O is the way to go

As the heatwave is set to continue it’s vital to remember to hydrate and keep cool. As tempting as it is to soak up the sun whilst working from home this temperature can quickly cause dehydration. Our body uses water to maintain its temperature so take regular breaks, work in the shade and drink lots of water.

2. Turn off tech

Whether you work from your home office, balcony, or garden a surprising amount of heat is generated by electric devices. When not in use devices should be switched off to avoid a rise in the temperature at home.

3. No more LAPtop

Direct sunlight is never good for electronics. Even in ordinary weather, laptops tend to overheat causing performance issues or even crashes. As the device generates a lot of heat when being used under direct sunlight it could result in technical issues.

If you have to work under the sun opt for a laptop hood that will protect your device and allow you to read the laptop’s screen with ease. Another way to cool your laptop is to use a self-cooling laptop stand or even use a cheap pedestal fan.

Especially in hot weather, it’s important to let the laptop breathe. Don’t work with it directly in your lap, on a blanket, or on a jacket – anything that will block vents and also act as an insulator.

If you’re working at a desk at home and you’re still having problems keeping your laptop cool raising your laptop and using a desktop fan could help.

4. Avoid opening the windows

Opening the windows is the first thing most do when it’s hot. But during a really warm day, this can backfire.

It is preferable to open the windows if the air outside is cooler than the air inside, which is most likely to happen at night. At night temperatures fall considerably meaning that opening a window will allow cool air to circulate around the house.

5. Buy houseplants

Plants can alter the temperature of their atmosphere through the process of photosynthesis. Indoor houseplants like ficus and palms can offer natural protection from the heat by blocking the sunrays and lowering the room’s temperature. This is a natural inexpensive way to keep your house cool and it is a win-win situation as they also brighten any space!

6.​Don’t charge outdoors

During the upcoming sunny spell, many Brits will opt to work from their gardens or balconies and enjoy the sunshine. But you should avoid charging your gadgets outdoors. Laptops, tablets, and any other electrical device increase their temperature whilst charging and if it’s being done outside, the environmental heat may add to the temperature and cause overheating of the device.

Rate of bank loan defaults set to rise across the eurozone, while growth in lending slows from the pandemic peak

The number of eurozone businesses and households unable to make repayments on their bank loans is set to rise, according to the first EY European Bank Lending Economic Forecast. Loan losses are forecast to rise to a five-year high of 3.9% in 2023, although will remain lower than the previous peak of 8.4% seen in 2013 during the eurozone debt crisis.

The rise in defaults sits against a backdrop of slowing lending growth, which is set to decelerate to 2.9% in 2023 as demand for lending post-pandemic is suppressed by rising inflation and the financial impact of the war in Ukraine.

Growth across total bank lending is expected to bounce back, however, averaging 3.4% over the next three years before reaching 4.0% in 2025 – a level last seen during 2020, when government-backed pandemic loan schemes boosted figures.

Omar Ali, EMEIA Financial Services Leader at EY, comments: “The European banking sector continues to demonstrate resilience in the face of significant and continued challenges. Despite eight years of negative eurozone interest rates and a forecast rise in loan losses, banks in Europe’s major financial markets remain in a position of capital strength and are supporting customers through these uncertain times.

“Although the next couple of years show more subdued lending growth rates than seen during the peak of the pandemic, the economic outlook for the European banking sector is one of cautious optimism. Optimistic because the worst of the economic effects of the COVID-19 pandemic appear to be behind us and recovery is progressing well. Cautious because significant emerging headwinds lie ahead in the form of geopolitical unrest and price pressures. This is another crucial moment in time where financial institutions and policymakers must continue to support one another to navigate the challenges ahead, compete globally, and build increased economic prosperity.”

Loan losses likely to increase, but from historically low levels

Non-performing loans across the eurozone as a share of gross business lending fell to a 14-year low of 2.2% in 2021 (compared to 3.2% in 2019), largely due to continued negative interest rates and government interventions introduced to support household and corporate incomes during the pandemic.

The EY European Bank Lending Forecast predicts that loan losses across the eurozone will rise, growing by 3.4% in 2022 and a further 3.9% in 2023, from an average 2.4% over 2020 and 2021. However, defaults are set to remain modest by historical standards: losses averaged 6% from 2012-2019 and reached 8.4% in 2013 in the aftermath of the eurozone debt crisis. Immediately pre-pandemic, loan losses averaged 3.5% across 2018-2019.

Across the eurozone, pockets of corporate fragility remain particularly high in certain sectors, including leisure and tourism, which were more heavily affected by pandemic lockdown restrictions. While corporate insolvencies overall remain subdued, temporary suspensions around the obligation to file for insolvency means that there is a backlog of unresolved cases, which could see numbers rise over time.

Business’ appetite to borrow weakened by geopolitical uncertainty and large cash holdings

The EY European Bank Lending Economic Forecast predicts growth in net lending to eurozone corporates of 3.6% in 2022, before slowing to 2.3% in 2023. This compares with a 12-year high of 5.3% recorded in the first year of the pandemic – heavily boosted by government financial support – and much lower pre-pandemic growth rates, which averaged 1.7% over 2018 and 2019.

In the short term, business lending growth is forecast to weaken relative to the pandemic peak, following the withdrawal of government and ECB support, pressure on investment appetite due to economic uncertainty as a result of the war in Ukraine, and a heightened focus on improving corporate balance sheets. The €300bn of ‘excess’ cash holdings eurozone firms have accumulated during COVID-19 is also expected to weigh on lending demand.

A further drag on lending growth could come from the end of the ECB’s Targeted Longer-Term Refinancing Operation programme, which has allowed banks to borrow at lower rates.

Nigel Moden, EMEIA Banking and Capital Markets Leader at EY, comments:Bank lending traditionally provides around half the financing needs of eurozone businesses. While corporate lending increased in the first half of 2020, as firms took advantage of government-backed loan schemes, borrowing growth fell through much of 2021. That trend is likely to continue through 2022 as high inflation bites and sentiment is affected by the war in Ukraine, which has led to significant commodity price increases and further sources of supply chain disruption.

“Amid such turbulent economic times, it is remarkable how resilient European banks continue to be, as they retain focus on supporting their customers. The pandemic years continue to present a real-time stress test for the industry, yet the lending figures – while depressed in the very short-term – demonstrate that the sector can expect a bounce back to pre-pandemic levels in the not-too-distant future.”

Growth in mortgage lending to decrease from 2021’s record pace but remains strong

Mortgage lending across the eurozone is forecast to grow at an average of 3.9% between 2022 and 2024, down from 4.5% in 2020 and 5.2% in 2021.

Mortgage lending put in a surprisingly robust performance during the pandemic. In 2020, mortgage lending across the region reported its strongest rate since 2007, thanks to ultra-low interest rates, rising house prices, the pandemic-related shift to homeworking, and the ability of some buyers to draw on unplanned savings to help fund deposits.

However, the outlook is less buoyant as house prices continue to increase, interest rates look set to rise and regulatory action is introduced in some eurozone economies to cool heated housing markets.

Nigel Moden comments: “Affordability is increasingly key as mortgage holders have been warned by the ECB that we are months away from interest rate rises. For customers on fixed rate mortgages, although there may be no immediate impact from a rate increase, they need to closely monitor factors like inflation and economic strength between now and the end of their fixed rate period. On the bank side, rising rates will likely result in a slowdown in first-time mortgages and refinance activity, which they will be preparing for.”

Cost of living pressures have mixed implications for consumer credit

The stock of consumer credit across the eurozone fell by 0.4% in 2021, having already fallen the previous year by 2.7%. This compares to pre-pandemic growth of 5.6% in 2019.

The EY European Bank Lending Economic Forecast predicts that consumer credit will rise 2.6% this year and a further 1.7% in 2023. However, a significant number of households will be able to draw on savings accumulated during the pandemic, which is holding back further demand for unsecured debt.

Nigel Moden comments: “The tighter squeeze on households’ spending power from high inflation will have a mixed impact on the outlook for unsecured lending – weakening it by reducing discretionary consumer spending, but also supporting demand by compelling some households to use credit to maintain consumption. As they did throughout the pandemic years, banks will need to review and reinforce supports for vulnerable customers, many of whom will already be considering unsecured credit options to help pay for growing energy and food bills.”

Omar Ali concludes: “Once again, eurozone households, businesses and banks are being put to the test. The current combination of rising interest rates, surging energy and commodity prices, and significant geopolitical uncertainty is placing enormous pressure on households and businesses, many of which have just recovered from the pandemic. While these factors are set to continue squeezing corporates and consumers in the short-term and dampen appetite for bank lending, banks remain well capitalized and ready to support their customers and the economy through this period of continued volatility.”

When is a property sale most at risk from money laundering?

New research from Credas Technologies has revealed when property industry professionals should be at high alert for potential money laundering threats during the property transaction process.

When it comes to money laundering within the property sector, there are three general types of risk to consider:

  • Customer risk: Focussed around the buyer or seller themselves.
  • Transactional risk: Focused on the property and the finance of a transaction.
  • Geographical risk: Not just the nationality of a buyer, but whether or not their location matches that of the property they are purchasing.

However, previous research by Credas Technologies found that almost half of property professionals carry out their own AML checks which can be a tall order at the best of times, let alone in the middle of a property market boom.

So when are they most susceptible to the illegal attempts made to launder money during a property transaction?

Initial Preparation – Low to Medium Risk

The initial preparation stage can require some action, but the threat of money laundering can be fairly easy to detect. Many buyers will look to secure a mortgage in principle and this requires a raft of personal information such as name, address, date of birth, income, expenditure and existing credit agreements.

Mortgage lenders should check proof of funds and so any red flags around complex loans should come to the forefront at this point. Cash buyers should also raise an initial flag at this point, but just because these initial checks have been done, it doesn’t mean estate agents can rest easily. They are responsible for carrying out their own AML checks and must ensure these are done properly, regardless of how stringent the checks already made by mortgage lenders have been.

Property search and making an offer – Medium to High Risk

It’s at this stage that estate agents, in particular, need to be at the top of their AML game. ID checks are essential when registering a buyer’s interest and this is when you must be considering any customer, transaction or geographical risks.

Can you verify the buyer? Are they offering way over or under the asking price of the property? Are there any other mismatches between the buyer and property? Is this one of multiple successive transactions they’ve made recently? Are they purchasing within the UK from a nation with weak AML regimes?

This is when your AML procedures will be tested and any customer, transaction or geographical red flags should be reported immediately, especially if it is related to a new-build purchase as they carry a far higher risk.

Working towards completion – Medium to High Risk

Just because an offer has been accepted, conveyancing solicitors should not assume a buyer is AML compliant and the threat remains at its highest when working towards completion.

They too, should carry out their own due diligence to investigate proof of ID, funds and the source of said funds. The red flags associated with customer, transaction and geographical risk are still relevant at this stage and so anything they think may have been missed by a mortgage lender or estate agent should still be reported.

Exchange and completion

By the time a transaction completes, any buyer should have been subjected to multiple checks by mortgage lenders, estate agents and solicitors. They should be happy that the buyer is who they claim, their source of funds is proven and legitimate and they are able to pay both the seller and other costs associated such as stamp duty.

Tim Barnett, CEO of Credas Technologies, said: “While the threat of money laundering is fairly low during the initial stages of the transaction process, being able to fully qualify a buyer in terms of both their identity and their financial suitability can set the tone for a fully compliant property sale.

“It also helps those at the sharper end of the process to rest easier knowing these checks have been executed properly and the buyer they are dealing with is legitimate.

“Of course, this isn’t always the case and many stakeholders within the home buying process will execute their own AML checks to varying standards of success. This means that those further down the line must remain diligent to the threat of money laundering at all times, but particularly when an offer is being made and progressed to completion.”

Business author and work futurist guides executives in the ‘new era of work’

Leading Workforce Innovation Specialist, acclaimed Remote Work Influencer and Innovator and author, Sophie Wade, is set to launch her second book, Empathy Works: The Key to Competitive Advantage in the New Era of Work, in the UK market on May 24th.

Since 2011, Sophie, a work futurist, has focused her work on advising and enabling business leaders to adapt their orientation, operating practices, and policies for Future of Work environments. From her base in New York, Sophie advises business directors and managers around the world and works with their employees to adopt updated work habits. Over 475,000 people have taken her popular video courses–including four on LinkedIn – which focus on empathy and Future-of-Work skills.

The Covid-19 pandemic resulted in unprecedented working restrictions worldwide and required company executives to rally, pivot, rework business models, adjust revenue streams, and reallocate tasks. They also had to supervise and support distributed employees working in their homes, spaced out across factory floors, or under intense pressure in frontline jobs. At the same time, the arrival of the Future of Work was hastened as organizations rapidly integrated new technology platforms and applications to manage decentralized workflow and automate tasks to reduce manual hand-offs and keep people safe.

In this technology-driven, Future-of-Work business environment, there is an important human-centric counterbalance. Greater interconnectivity means marketplace developments are faster-paced and less predictable than before the COVID19 crisis. Customer feedback loops are shorter coupled with their expectations of ongoing improvements. Employees are therefore needing to work together closely, often in cross-functional teams, to tackle more complex issues and devise and trial new products and services quickly.

As Sophie Wade explains, now the Future of Work is upon us, business leaders are having to adjust for the new era of work in order to stay competitive: “Since the Future of Work’s arrival was accelerated by the pandemic, corporate executives and managers are quickly needing to recognize the new business and work requirements, challenges, and opportunities. Leaders have to engage their employees—burned out after a two-year pandemic—to meet new business demands. Empathy is the best way for them to do that—putting themselves in their team member’s shoes to understand what they are going through and figure out how best to motivate, manage, and support each person.”

Millennials’ voices are dominating public discourse as their perspectives and interests are highlighted in the cultural shift accompanying the transition to new work arrangements. Their numbers and influence are affecting acceptance, adoption, and adjustments to new approaches and models throughout organisations. Established businesses are needing to compete on more human-centric terms to attract, engage, and retain the best talent.

Sophie explains: “The pandemic certainly accelerated the ongoing shift that has been transforming management approaches from transactional to experiential to engage employees. Business leaders have increasingly needed to elevate corporate values such as trust, empathy, and inclusion. Nurturing a strong culture, they can connect remote workers, create a sense of belonging, encourage collaboration, and support employees’ well-being, especially with widespread mental issues stemming from prolonged crisis conditions. Implementing a relevant hybrid model is key to staying competitive which requires thoughtful design, roll-out, and months of ongoing refinements as each team optimizes their configuration. When leaders practice empathy they understand how to help each employee do their best work.”

Four out of five people find end-of-life account admin ‘difficult’

Nearly 90% of people find the process of contacting individual companies to close the accounts and subscriptions of someone who has died, difficult or very difficult, according to a new survey.

It’s voted one of the most painful aspects of all tasks linked to dealing with the death of a loved one, with 88% of people finding it hard.

In addition, the top three priorities for those considering their own end-of-life planning, according to the survey, were: writing a will and estate planning (74%), buying life insurance (48%), and compiling a list of final wishes (46%).

The research was conducted by end-of-life admin service Settld, which has developed an award-winning secure service for bereavement account administration. Settld also founded the campaign for better ‘Bereavement Standards’ with national bereavement charity, Cruse Bereavement Support.

Vicky Wilson, co-founder and CEO of Settld, said: “This survey shows exactly why Settld’s service is so badly needed in the UK and why we have fought for much better standards of customer service for those dealing with the death of a loved one.

“Settld eliminates a huge amount of admin stress for bereaved individuals, because using our free online service means they no longer have to contact individual service providers and repeat the same words: “my loved one has died” over and over again.

“We are also helping to cut costs and improve efficiency for a growing number of service providers who use our technology to streamline their processes. In this way, we are working towards more consistent Bereavement Standards.”

Debt for climate – the solution that marries economic recovery with climate action?

A debt-for-climate approach could be one way to offset the impact of the COVID-19 pandemic while supporting developing countries to tackle climate change, according to leading insurer Atradius UK.

In its latest economic research report, Atradius found that many developing countries are facing a triple crisis in 2022. The impact of the pandemic is being felt across the globe, but particularly in small island economies which have historically been heavily reliant on tourism.

Existing debt vulnerabilities were only aggravated by the pandemic. With global travel restricted, many of these economies have struggled to survive over the past two years.  Atradius reports that this drop-off in global tourism has resulted in deep economic contradictions coupled with rising public debt.

Many of the economies hardest hit by the pandemic are also some of the most vulnerable to the impact of climate change. But, due to fiscal constraints caused by high levels of debt, these island economies often can’t afford to invest in the climate-friendly solutions that would ultimately serve to benefit them in the longer term.

For some, the G20 Debt Service Suspension Initiative (DSSI) will have provided some temporary relief to help mitigate the impact of COVID-19. However, Atradius reports that following the expiration of DSSI at the end of 2021, many lower income countries are facing a crisis and the Common Framework may not go far enough to support some struggling economies.

Atradius reports that one solution to these dual problems could be a so-called ‘debt for climate swap’. This would see the international community provides debt relief for low-income countries in exchange for investments in climate solutions.

Damien Dawson, Regional Manager for Atradius UK, commented: “Debt for climate is an interesting approach to supporting low-income and developing countries with international funds in a way that is mutually beneficial for both debtor and creditor. Many of these lower-income countries have low carbon footprints, but despite having made little contribution to rising global temperatures they are set to be some of the worst impacted.

“It’s important to remember that debt for climate isn’t a new phenomenon. We saw debt for nature swaps take place as early as the 1980s when Bolivia and a NGO signed the first agreement to tackle deforestation in return for debt relief. The first debt for climate swap took place in 2016 between the Seychelles and Paris Club creditors.”

Despite many positives, debt for climate swaps aren’t without their challenges. Atradius highlights several challenges participants need to overcome for the swap to be successful. In order for a swap to create maximum fiscal space for a debtor country to push forward to a more climate resilient economy and greener growth, all its creditors need to be on board with the initiative. Any debt relief needs to create sizable room for the debtor country to increase its spending on climate initiatives. For countries with significant debt, a ‘topping up’ of the relief may be necessary over time to provide and maintain the room for climate spending. And finally, a successful deal relies on good governance of the debtor country, with insurance that the funds will be used for the agreed goals.

Damien continued: “Although there are challenges to overcome, debt for climate swaps could become an attractive tool for both debtors and creditors. Previous swaps have taken place on a relatively small scale, given the number of parties involved it could take some time to implement anything on a bigger scale. That being said, the benefits of addressing the impacts of the pandemic and climate change in one solution could be significant on an international scale.”