The Executive Newsletter of TheOfficialBoard

By Hugo Ferreira, Compagnie Benjamin de Rothschild

It is possible to combine the principles of ecology and finance to reach a sustainable development under the regulating umbrella of responsible policy makers.

Our strategic development in green finance is not about philanthropy, it’s about profit. Corporations have to manage new risk created by constraints imposed by the Kyoto treaty limiting carbon emissions.

Promoting those sustainable investments is possible if the corporations are convinced they can improve their ecological impact and reduce their costs in the long run. For example, with the help of BeCitizen, an engineering group in sustainable development, we have helped an important European company to structure the financing of photovoltaic panels on the roofs of its building.

How? In several European countries, the electric utilities have to purchase that kind of produced energy at a fixed price on a long duration. The free cash flow generated minimizes the risk for the investors and helps the company to value those dormant assets. A stable regulatory environment with the right financial incentives is the key ingredient. Customer pressure is also a strong motivation.

The government role is pivotal in passing new laws and incentivizing corporations to adapt their technologies to the new environmental constraints. The Kyoto protocol has forced many companies who don’t match the emission quotas of carbon dioxide to consider investing in projects which reduce emissions in emerging countries. Such an investment receives a certificate which compensates the deficit. Those certificates can help with financing or backing loans.

To help financing such projects, we are about to introduce several private equity funds dedicated to polluted land remediation, sustainable development, green buildings and clean tech.

Corporations will invest only in profitable environmental programs. There are still too few of those projects on the planet. The finance community has to show flexibility and creativity in this transitional phase of sustainable and positive economic development. It won’t be long before sustainability and profitability are successfully meshed.

Hugo Ferreira is member of the management board of Compagnie Benjamin de Rothschild. Compagnie Benjamin de Rothschild is a global leader in asset management and in structuring public/private partnerships.

By Mark Jaugey, PayPal

The common check has a colorful history. In the 1930s, Sir Alan Patrick Herbert, a British humorist created the urban myth that a man called Albert Haddock won a landmark court case to force the tax collector to accept a check written on a cow.

The story was pure fiction, but reminds us that a check was simply an instruction for a bank to pay someone a sum of money. Long ago, people wrote checks on whatever scraps of paper they had at hand.

The earliest recorded check in the UK was dated 16 February 1659 - which means we have just passed its 350th anniversary.

Personally, I saw my first check as a rite of passage when I turned 18. Every year, like many of us, I struggle to remember to write the right year on the check each January. But times have changed.

The check is in the mail often reveals the uncertainty of a timely payment.  In 2009, the idea of paying with a piece of paper which embarks on a slow clearing journey might seem outdated. In France alone, the over 3+ billions checks issued every year represent more than 4000 tons of print paper.

In the UK, Tesco and Marks & Spencer have stopped accepting checks. Why? To speed up checkout, reduce fraud, enhance tracking and cut costs… In Germany, Austria, Scandinavia, Belgium and the Netherlands, checks have been replaced by direct payments and electronic payments issued by consumers.

After the financial sector turmoil, banks may perceive the cost of processing checks too expensive, considering the availability of alternative options. Although small businesses are often portrayed as championing the check, we’re finding more and more of them are jumping at the chance to take online payments.

The tangible process of writing a check remains, for some people, a more reassuring way of paying; it provides a higher level of control and assurance. In most EU countries, adults are more concerned about misuse of their credit or debit card information than about electronic payments.

Paperless money will not happen overnight, but… Most flight tickets are now replaced by one’s passports and a booking code.  The Amazon’s Kindle is reshaping the book publishing model. The countdown for the check’s extinction has started…

Mark Jaugey is Communication Director at Paypal Europe. Founded 10 years ago, PayPal provides electronic payments to 184 million consumers in 190 countries.