What's happening in the UK - June

Since entering May, the cost-of-living crisis wracking the nation has only increased in scope. Worry has set in amongst professionals and citizens alike. This intense financial pressure and rising inflation seem to have reduced the short-term confidence in the UK economy. Read further on June 2022 UK insights to learn more.

Compared to April and March, companies formed in the UK have increased – 67,306 companies formed this month.

New companies incorporated - June 2022 UK insights

CCJs filed have also increased throughout May to around 6,770, though this is only a slight increase over April’s 5,485 – June 2022 UK insights.

CCJs - June 2022 UK insights

Finally, the charges registered have decreased significantly from 10,779 to 8,231 – June 2022 UK insights.

Charges Registered - June 2022 UK insights

Despite these numbers, UK investment in the Fintech industry, in particular, has done nothing but increase. The government’s commitment to the net carbon-zero target in 2050 remains as strong as ever. However, criticism is growing regarding whether more must be done to tackle the cost-of-living crisis rather than far-off environmental goals.

FinTech and Finance News – June 2022 UK insights

UK-based start-up Merge recently announced it had raised around $9.5 million in seed funding. This Fintech company, founded by former PayPal executive Kebbie Sebastian, aims to revolutionise banking, payments, and risk management methods for web3 companies. Purportedly, it will do this via a specifically designed API – a bridge allowing web3 businesses to access each other’s systems. Merge will focus on providing services to crypto exchanges, wallets and DeFi gateways. These are companies who, traditionally, find it difficult to do business with traditional banks.

However, there may be a good reason why traditional banks are wary of doing business with these companies. Like any new technology which few people truly understand, exploitation seems to be rampant. In a market with a sore need of regulation, providing financial services may seem to be unwise. For example, the recent rise in cryptocurrency ‘pump and dump’ schemes has caused significant worry for even those who were previously optimistic about the widespread use of web3 technology.

One coin in particular, the ‘Save the Kids’ coin promoted back in 2021 by various UK YouTubers and influencers, saw internet personalities (whose main audience is children) promoting a cryptocurrency designed to ‘redistribute wealth’. Once the coin launched, the founding members dumped their stock, and the price fell from $0.0029 to $0.0012 in under a week, never to recover. Additionally, fraudulent companies and coins such as the fabled ‘Bitconnect’, which told consumers it was an open-source cryptocurrency, became nothing more than Ponzi schemes designed to profit its early investors.

All these cases and more may explain why providing financial services to these web3 companies is such a risky niche to enter. Only time will tell as to whether this new venture by Merger will pay off.

How to achieve net-zero emissions?

In other news, the UK government continues to push forward its net-zero goals, with the Environmental Audit Committee (EAC) launching a new inquiry into the UK’s financial sector and net-zero transition.

The recent COP26 summit in the UK highlighted how financial institutions could play a role in decarbonising the economy. The Glasgow Financial Alliance has demonstrated this for Net Zero (GFANZ). Since its inception in 2021, GFANZ has gained over 450 member firms in 45 countries responsible for $130 trillion (40% of global private financial assets). The group provides a place for firms with adjacent ideas to accelerate the alignment of financial activities with net-zero goals.

Additionally, major construction businesses have also committed to achieving net-zero emissions, with banks providing specialist ESG loans to companies that meet the criteria for sustainability. These new loans are essentially banks’ response to shareholders’ desire for financial institutions to begin promoting positive climate change, but the term ‘ESG’ is poorly regulated.

What determines whether a company is ESG compliant or not is a fraught process. The data on qualitative assessment, such as ‘impact on the environment, is currently poor and under-utilized. This grey area has also seen practices such as ESG investing come under fire recently since ‘greenwashing’ at the highest levels is rampant as companies struggle to attain ESG-compliant status.

This greenwashing allows companies to become included in this ‘catch-all’ term and be eligible for all the benefits without creating much meaningful change. These include construction companies that pledged to net-zero emissions. An extreme example of this was IKEA who, in 2020, was caught making beechwood chairs out of illegally sourced wood from the forests of Ukraine’s Carpathian region. What made this so shocking was the source of the wood. It was previously accredited by the Forest Stewardship Council (FSC) as legal and ethically sourced. IKEA has a gold standard certification from the company for its sustainability credentials. This raises serious concerns about the behaviour of some of these environmental boards.

What’s happening at DataGardener?

In more uplifting news, DataGardener members will be present at this year’s NACFB! Co-founders Robert Holland and Tarun Kumar will be at the show at Birmingham’s NEC alongside commercial director Mark Bennett.

We know it’s not easy working in commercial finance, so we’ll attend the event in person to help prospective lenders and borrowers stay ahead of the competition. Robert Holland – Co-Founder of DataGardener, and Mark Bennett, our Commercial Director, have worked in that space for over long years (Mark for over 25 years!).

If you’re planning to attend and would like to meet for a quick coffee or to learn more about DataGardener or any of our new ESG tools, grab some time on any of our calendars. Book A Demo.

To download a PDF version of the June 2022 UK insights report, please click Download Report.

Other Articles

Leave a Reply

You must be logged in to post a comment.