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PwC Appoints New Global Leader of Consumer Markets

A consumer market is a market when individuals purchase products or services for their own personal use, as opposed to buying it to sell themselves. Consumer markets consist primarily of products that people use as part of their everyday lives.

PwC has appointed Sabine Durand-Hayes as the Consumer Markets Global Leader. Sabine brings more than 25 years of experience assisting private equity and corporate clients with analysis and structuring of mergers, acquisitions and divestitures.

During her career with PwC, she has advised various multinational agri-food, fast-moving consumer goods, luxury and retail companies on strategic and operational issues, from portfolio management to carve out and integration.

In her new role, Sabine will lead the Global Consumer Markets Industries team, which advises a large network of clients from various industries, including retail, consumer, hospitality and leisure, as well as transport, logistics and packaging, on a range of key areas. In particular, she will focus on optimised omnichannel models; effective supply chain management and organisation, from strategy to execution – enabled by digital, data analytics and new ways of working, including environmental, social and corporate governance, risk and assurance, tax and legal aspects as part of the solution.

She will also continue her role as the Global Relationship Partner for one of the world’s largest global food retail companies.

“I’m thrilled to be taking on this new role in leading our Global Consumer Markets Industries practice,” says Sabine. “The ongoing transformation of the Consumer Markets industries in a context of fast-changing consumer preferences, and accelerated by the COVID-19 pandemic, serves as a reminder of how our PwC purpose – to build trust in society and to solve important problems – guides our work with clients and stakeholders.

By bringing our capabilities together, we have unique opportunities to connect with all players, from manufacturers and producers, all the way to distribution and consumers, on how to address common challenges. We can provide experience and solutions that make a real impact for our clients and their consumers.”

Sabine previously was Retail and Consumer Industries leader in France and more recently led Consumer Markets in Europe, the Middle East and Africa. She leads PwC’s Transactions Services Retail & Consumer teams in France.

She presently serves as a member of the Supervisory Board of PwC France & Maghreb since 2017, and led the Strategy commission from 2017 to 2020, providing first-hand experience of governance and control in a multinational business.

Sabine trained and worked in PwC United Kingdom and is a member of the Institute of Chartered Accountants of England and Wales.

She earned a Masters from ESC Montpellier Business School.

Duties and ESG Considerations In Decision-Making

Environmental, social, and corporate governance (ESG) is an approach to evaluating the extent to which a corporation works on behalf of social goals that go beyond the role of a corporation to maximise profits on behalf of the corporation’s shareholders.

Some may say sustainability is the “flavour of the month”. If that was ever the thinking pre COVID-19, the pandemic has certainly had an impact on corporates’ sustainability agendas – no longer a “nice to have” but rather an operational and strategic imperative, at the heart of any business’s ability to compete and succeed in the long term.

Good governance, good decision making, is a cornerstone of good business. The double-headed health and financial crisis has accelerated the growing focus on both the purpose of the corporation and the role of the board in overseeing and leading in ways that promote sustainable business success.

Alongside this, the push by investors has moved from talking purely of share price and returns to asking about resilience and long-term value creation. Put simply, society is forcing companies to focus on the link between values and value.

That is why we worked with the World Business Council for Sustainable Development to finalise this paper on fiduciary duty which draws primarily upon perspectives and insights from United Kingdom and United States legal and regulatory structures.

We explain why sustainability matters and why it should be included by boards on their agendas as a matter within their remit. We consider how boards should address sustainability in the context of their company’s strategic objectives and business model.

The World Business Council for Sustainable Development is a Chief Executive Officer-led organisation of over 200 international companies. The Council is also connected to 60 national and regional business councils and partner organisations.

Along with the World Business Council for Sustainable Development, we are challenging directors to assess whether they are taking all relevant steps in the boardroom to ensure the company not only properly assesses and mitigates sustainability risks but also understands the opportunities that sustainability considerations can bring.

2020 Global Sustainability Report

A comprehensive global report on sustainability and the implications on the insurance industry has been published today. The report looks at sustainability-related initiatives and frameworks around the world and analyses the current status in 19 countries.

With its global reach and coverage the report is the first of its kind setting out the legal basis for sustainable insurance.

The insurance industry is affected by environmental, social and governmental risks in its entirety. From asset prices and investment choice to business transition risk; the ESG risk to insurers’ own operations including property, personnel supply chains and claims – the insurance industry will need to deal with many issues.

However, it is also uniquely placed to play a fundamental role in as part of the solution. Insurance engages with almost every industry and sector; it owns a large amount of the world’s assets and it has a global reach and a finely detailed knowledge of risk transfer and solutions.

The report was launched at an online event attended by industry members from a variety of functions at insurance companies, brokers and consultancy firms with speakers from UNEP FI, AIG, Insurance Council of New Zealand and FTI Consulting.

During the session a survey was conducted which found that in spite of the COVID-19 pandemic 69% of attendees had experienced an increase of the importance of ESG issues due to public attention and policymaker statements.

This has been reinforced by increasing focus on ESG topics from employees and customers and 38% of attendees noticed a marked increase in their competitors’ activities in this area.

Within insurance companies the areas most affected by ESG issues were Investment and Risk Management departments.

Financial Institutions Set For Change

Change management is defined as the methods and manners in which a company describes and implements change within both its internal and external processes.

The primary role of a traditional bank providing financing and capital is set to be challenged further in a post COVID-19 world by non-banks, which predicts that alternative providers of capital are set to become an even more important part of the global financial system.

In the last 10 years, aggregate lending in USD by non-banks has outstripped the pace of growth of traditional lenders, with non-banks seeing a compound annual growth rate of lending of 2.3%, compared to 0.6% CAGR for banks.

This trend is likely to accelerate as declining core capital ratios – caused by asset impairments resulting from the COVID-19 pandemic – will limit the lending capacity of banks, particularly in Europe.

Non-traditional sources of finance such as private equity, sovereign wealth funds, credit funds and governments themselves will need to step into the breach to finance the recovery and its aftermath.

In 2019, non-banks – including private equity funds and sovereign wealth funds – lent 41 trillion dollars compared to the 38 trillion dollars lent by traditional lenders.

In particular, the analysis shows that private debt has seen substantial growth, which is set to propel the asset class into a significant category of non-bank lending. Since 2010, private debt has been growing with 11% CGAR.

For insurers and asset and wealth managers, the challenges are equally daunting.

The report argues that a combination of near zero interest rates and the rise of digital-only players will create tighter margins across product portfolios, thereby emphasising the need to digitise rapidly, gain cost efficiencies and register real gains in productivity.

All of this will have to be completed as governments mandate more spending and reporting on ESG initiatives.

Those that fail to do so are likely to be caught in the wrong end of the coming wave of deals and restructuring.

Mining Companies Resilient Despite Pandemic

Mining companies are so far weathering the COVID-19 crisis but should take advantage of relative stability to adopt strategies to mitigate against further economic and social risks, according to PwC’s Mine 2020 report.

PwC’s forecast for 2020 suggests the big miners will take a modest hit to EBITDA of approximately 6%. This follows a strong financial performance in 2019 – with revenue up 4% to US$692bn and market capitalisation up 19% to US$898bn.

On this basis PwC believes the Top 40 are in a strong and resilient position to weather the economic uncertainty created by COVID-19.

Despite this positive outlook, the report cautions that mining companies will need to adapt to long-term impacts caused by COVID-19. Miners may need to think about de-risking critical supply chains and investing more in local communities.

A shift towards localisation in supply chains and for smaller deals in local markets, as well as different forms of community engagement, may turn out to be enduring consequences of the pandemic.

A changing outlook for investments

Capital expenditure was up 11% to US$61bn in FY19, according to Mine 2020. PwC expects capital expenditure will slow in 2020, freeing up cash flows, and giving miners the capacity to pay dividends should they choose to do so.

PwC doesn’t expect many mega-deals to take place in 2020 due to increased economic uncertainty and practical constraints of site visits and inspections. However, the current conditions provide opportunities for the Top 40 to capitalise on smaller acquisitions in their local markets.

The enterprise value of mega gold deals totalled US$19.2bn in FY19. Gold deals are not likely to recur to the same size or quantum as in recent years.

Cybersecurity requires attention

Currently just 12% of mining companies’ Chief Executives are extremely concerned about cyber. Yet Mine 2020 notes that over a similar period the number of reported cyber breaches among mining companies increase fourfold.

Growing expectations around ESG

Although Mine 2020 has found that most large miners are moving in the right direction on ESG disclosure, some are performing better than others.

Only 11 of the Top 40 companies are setting public ESG commitments and targets, reporting consistently against them, and linking executive and management performance to achieving them.