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Weekly Media Briefing

13 January, 2022

This week’s topics: 

  • The financial service sector shows resilience in the face of increasing change but optimism softens - CBI/ PwC survey 
  • Changes to rules on climate disclosures 
  • Challenges for recruitment, work and skills in 2022 - PwC’s Future of Work and Skills survey
  • The benefits of a plant-based diet in protecting nature 

 

Financial services activity has strengthened however growth in optimism softened compared to the previous quarter

A survey of 105 financial services firms conducted between 22 November and 10 December, by the CBI/PwC found that despite firms’ profitability growing at the fastest rate since December 2015, growth in optimism softened compared to the previous quarter (but remains above the long-run average). 

Isabelle Jenkins, Head of Financial Services at PwC, said:

  • The softening in optimism likely reflects concerns about what could be a destabilising cocktail of COVID-19 uncertainty, higher inflation, geopolitical tensions, and cyber security concerns. 
  • However, the financial services sector has proved its resilience in the face of increasing change, which will likely continue over the next quarter. 
  • The anticipated flattening out in non-performing loans (NPLs) must also play a part in the slightly sombre mood. Providing firms have a tight grip on their strategic priorities the consequences of increasing levels of debt may not impact significantly the strong position the sector is currently in. 
  • Key priorities, such as upskilling staff, embracing tech and enhancing customer interaction, remain high on the to-do list.

 

What does the FCA’s new rules on climate disclosures mean for businesses?

David Croker, Partner in Asset & Wealth Management, PwC UK, comments:

  • The recent introduction of climate related disclosures for asset managers, life insurers, and FCA-regulated pension providers is a welcome development and illustrates how climate considerations are no longer simply ‘nice to have’ aspects of a company’s strategy. As formal regulatory requirements, they are critical to a firm’s accountability to its shareholders, the market and regulators.
  • The move represents a first step towards more detailed requirements on transition plans. The Chancellor announced at COP26 that the UK will introduce requirements for listed companies, asset managers and asset owners to disclose transition plans that consider the Government’s net zero commitment or explain why not. The Government will set up a high-level Taskforce to develop a ‘gold standard’ for transition plans, which the FCA will be involved in. These new rules form part of a much broader and often overlapping regulatory agenda on ESG. Firms should be implementing these requirements on climate-related disclosures as part of a broader strategic ESG regulatory programme rather than on a standalone basis. 

Successes and challenges UK businesses face in 2022

PwC’s Future of Work and Skills survey found that a majority of UK businesses reported a better performance last year when it comes to hiring, retention and productivity targets. However the survey found that UK leaders are concerned about skills needed for the future, unmanageable workloads and levels of trust between workers and supervisors. 

  • More than half (53%) of UK respondents, and 57% of global respondents, say their organisation performed better against workforce performance and productivity targets between September 2020 and September 2021 than the previous period. Only 5% of UK business leaders say their company performed significantly worse in that time.
  • Over half (58%) of UK business respondents say their organisation performed better against both workforce retention and hiring targets between September 2020 and September 2021. The majority of UK businesses (57%) responding to the survey also report they’ve performed better against diversity and inclusion targets over that same period.
  • However, when it came to skills, only 32% of UK respondents (compared to 26% globally) strongly agreed they can identify the skills their organisations will need in the future due to technological change. There is currently a gap between the heightened role technology will play in the workforce strategy and an understanding of the risks. Only 23% of UK business leaders, and 21% of global business leaders, surveyed strongly agree that they can identify the potential risks caused by decisions to replace human work with technology. Furthermore, only 25% strongly agreed they communicate clearly and consistently to employees and other stakeholders about the impact of automation and AI.

Sarah Moore, People and Organisation Leader at PwC UK, said:

  • With many people working from home, businesses are focused on sustaining productivity and creating cohesive workplaces and cultures. This is best done through supportive policies, ensuring clear channels of communication, and offers opportunities to support long-term employability. The focus on addressing today’s pressing challenges should not come at the cost of future planning, especially when it comes to preparing workforces for technological changes and skills which will be required in the medium to long term.

Veganuary Workplace Challenge and the importance of collective action

PwC UK is taking part in the Veganuary Workplace Challenge, supporting its people to try a more plant-based diet. 

Emma Cox, PwC Global Climate Leader, said: 

  • Food systems are inherently intertwined with climate change, so what better way to raise awareness than through Veganuary. It highlights the benefits of a plant-based diet in protecting nature, as well as the important contribution that we can all choose to make to help keep global warming below 1.5°C.
  • A very clear theme emerged at COP 26 around the power that we as individuals hold.
  • This is PwC's fourth Veganuary Workplace Challenge and it’s great to see the building momentum each year

Explore how PwC has been championing #PlantBased food for several years in this case study.

Something to listen to:

The Paris Agreement adopted at COP21 in 2015 introduced a market based mechanism to price carbon with the aim of cost-effectively managing and reducing global greenhouse gas emissions. But carbon pricing mechanisms can raise tricky accounting questions. Andrea Pryde is joined by Claire Howells and Tom Bullock to find out more

Something to read:

With less than 200 days left until the start of the Birmingham 2022 Commonwealth Games, the excitement is building, not only for the fantastic festival of sport that lies ahead but also for the great legacies that will remain for Birmingham and the Midlands region.  In this blog,  Nick Hatton, Midlands Place & Purpose Leader, shares his thoughts on how the Birmingham 2022 Commonwealth Games can make life better for everyone. 

 

About PwC

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Sian Gentle

Manager, media relations, PwC United Kingdom

Tel: +44 (0)7715 484 884

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