One of the very few positive outcomes of the pandemic last year, when lockdowns around the world were at their sternest, was that air pollution cleared up significantly.
A report last year by the World Bank said that the lockdown, imposed in at least 89 countries, and which affected more than half of the world’s population, had the "unintended consequence of reducing air pollution". In the world's more polluted cities, there were reports of people seeing clear blue skies for the first time in their lives. With drastically fewer cars on the roads and planes flying, satellite data of nitrogen dioxide around the time of the lockdown, compared to levels during the same period in 2019, showed a remarkable drop. In the UAE, too, corresponding to this global trend, between February and April last year, there was a 30 per cent reduction in nitrogen dioxide levels.
With the increased pace of vaccination drives in many countries, people are taking flights again. Consequently, the pressure is back on the aviation sector to slash emissions with an eye to achieving the Paris Agreement, that is, carbon neutrality by 2050.
Now, in what can be heralded as good news, 60 companies in the aviation sector have pledged to increase the share of sustainable aviation fuels in the industry to 10 per cent by 2030. Decisive action such as this shows a willingness by these companies to make tough calls and not shy away from measures that limit climate change. Meeting such ambitious targets is not easy for big businesses. They require a united approach and long-term commitments to clean energy, and putting the collective good over self-interest and profit.
"The time for talking is over," as the Willie Walsh, the director-general of the International Air Transport Association, said earlier this year. “The time for action is now, we want everybody in the industry to play their part and to raise their game significantly to ensure we can meet the targets that are necessary for the industry.”
Last year, in a step for the sustainable future of aviation, Etihad Airways launched a programme to offset emissions from its "Greenliner" flights by purchasing 80,000 tonnes of carbon offsets that would fund a Tanzanian forestry project.
Even before lockdowns, various sectors put in efforts to switch to more sustainable means. Shipping, aviation and steel comprise more than a quarter of global carbon dioxide emissions.
Just last week BP, Masdar and the Abu Dhabi National Oil Company said they would develop low carbon hydrogen hubs and decarbonised air travel corridors between the UK and UAE.
Much beyond merely appeasing climate activists, companies investing in cutting their carbon footprint is a step in the right direction. At an individual level too, travellers are increasingly conscious about curtailing the damage their choices make to the environment.
The aviation industry currently represents 2 per cent of global carbon dioxide emissions, according to the International Civil Aviation Organisation, but a predicted increase in passenger air traffic means it could add more pollution to the skies unless timely steps are taken.
The Paris Agreement, signed by 196 countries, has provided most of the world with a goal to work towards. The UAE, for one, has a target to reduce its carbon missions even before that, by 25 per cent by 2030. The country has been active abroad by investing in renewable energy projects worth $16.8 billion in 70 countries, and providing $400 million in aid and loans. Increasingly countries and companies will have to show more their commitments to clean air and clean energy across key carbon-intense sectors.
As the pandemic abates, and more and more people book tickets to hop on a plane, it makes a lot of sense for aviation companies to include sustainability in their mindsets and goals. More companies across more sectors may well have to get on board.
Anghami
Started: December 2011
Co-founders: Elie Habib, Eddy Maroun
Based: Beirut and Dubai
Sector: Entertainment
Size: 85 employees
Stage: Series C
Investors: MEVP, du, Mobily, MBC, Samena Capital
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
