Tag Archives: nature
Eco-Watches: Groups Attain Mixed Results In The Alternative Market
http://www.ft.com/cms/s/0/4befe99c-eee3-11e2-b8ec-00144feabdc0.html#ixzz2fKiu01ri By Syl Tang It was just a matter of time before ecology touched the watch industry. With nearly 15m watches sold in the US alone in 2012, several new companies are trying to make the business a bit greener with biodegradable and natural material watches. In 2008, Marcella Maselli became troubled by the plastic watch trend. Michael Kors had entered the marketplace with plastic bracelet timepieces, and the Italian company Toywatch was experiencing enormous success. Ms Maselli, director of product development for E Gluck, the company in charge of the Armitron and Anne Klein licences, says: “Everywhere I looked, I saw plastic. I wanted to make something with the look but not the environmental impact.” She started working on a line called Sprout, which would be based in New York, and be biodegradable. But it was not quite as easy as she had hoped. Traditional plastics are oil-based, and therefore not biodegradable. Finally the company used polymer polylactide, extracting starch from corn, converting the sugar into lactic acid, and turning it into pellet form, which then became mouldable and injectable corn resin. Made entirely of plant-based feed, corn resin watch bracelets break down naturally over time. Sprout could not figure out some of the elements: the hands, the crown and movement had to be traditionally made. However, the crystal was replaced with one that a biodegradable mineral, and the traditional watch battery with a mercury- and lead-free option. The result was a watch that would biodegrade by 80-93 per cent in a landfill in an estimated three years, with decomposition speeding up in a compost environment. During the process, the watch would not leak toxins or chemicals, which is the biggest problem with traditional plastics. There are some style limitations to the Sprout eco-friendly watches. “Because of the nature of the materials, you cannot do everything with corn resin,” says Ms Maselli. You can’t make a gold watch or a silver-plated watch.” Not being able to take on every trend has not hampered the company. Sprout has expanded to 80 styles carried in 1,000 sales outlets, including the US department store Nordstrom, where new models such as cork and bamboo variations are introduced five times a year. Also chasing the alternative material option is WeWood, a company that started making watches in 2010 with wooden bands, and cases that had not been treated with chemicals, ideally using already harvested scraps. Historically, wooden watches have not fared well. If the wood had not been treated with chemicals, insects consumed the material. With other watches, wearers discovered the wood would simply deteriorate over time. And some cost thousands of dollars. Based in Florence and Los Angeles, WeWood makes no secret of the difficulties. Neither of the two founders, Daniele Guidi, an accessories distributor, and Alessandro Rosano, a shoe designer, had any experience. “From when we made the first sample, to understand what was going wrong, to make things work well together, [was] a work in progress. [From] that first watch to today, the failure [rate] has been reduced drastically,” says Mr Guidi. The company found its test groups by tracking the way the watches they sold fared in an increasing number of climates and locations. Wooden watches had existed for some time through other companies such as Tense, Martin & MacArthur, AB Aeterno, and SpringBreak, but WeWood’s reclaimed message, wide variety of styles and modest prices seemed to resonate. Made primarily in Indonesia and China from maple, black wood, recycled teak and rosewood, WeWood’s pieces, which retail for between $120 and $140, and weigh just 1.5 ounces, became popular with consumers. Singers Rihanna and Ke$ha, and pop group the Black Eyed Peas, are fans and the company ships to more than 30 countries. WeWood plans to make a watch with entirely ecological movements. Only the springs would be metal. But to make this a reality, the cost would be astronomical, at $20,000-$30,000 each. “This sort of thing appeals to the 20- to 25-year-olds, says Katie Nadler, chief executive of the fashion recommendation engine, TopShelf. “The ‘millennials’ became aware from a young age of the potential long-term environmental damage of everyday actions. It’s a thoughtful approach on what they wear.” However, TopShelf, which makes about 100,000 monthly purchase recommendations to its subscribers, says that, despite a growing number of requests, eco watches are still a very small percentage of the 10,000 to 15,000 watch purchases that it recommends. “The major catalyst for volume growth in eco-friendly watches will come when industry giants such as Fossil start to focus on it,” says Ms Nadler. An industry analyst who asked not to be named noted: “There’s just 11 brands that surpass $100m in sales each. It’s absurd for a start-up watch company to try to take them on.” WeWood admits it struggled initially with low production numbers and a lack of resources. Some feel that ecologically focused watch companies are simply riding a larger trend for anything green. According to LGI Network – an NPD Group company that tracks 72 watch brands – although 90 per cent of the market is battery-driven watches, the trend is just a matter of marketing. Fred Levin, president of LGI, says: “When you look at how much energy we use elsewhere in our daily lives, your watch is such a small part – the battery even smaller. It lasts for three years and is one of the most efficient sources of energy … This is a non-event. It’s just that marketers always focus on ways to appeal to consumers.” Continue reading
Are We Facing A Multi-Trillion Dollar Agri-Bubble?
Ben Caldecott warns that climate change and water scarcity could leave the agricultural sector with huge stranded assets By Ben Caldecott 09 Aug 2013 The boom in agricultural commodity prices has sparked significant interest in agriculture as an investment opportunity. After declining in real terms throughout the 1980s and 1990s, international food prices began rising in 2002 and this began the longest commodity boom since 1945. Low returns in equities and bonds, exacerbated by the financial crisis, have also encouraged investors to look to new areas in search of higher risk-adjusted returns. As new resources have flowed into agriculture, investment has risen in several emerging markets such as Brazil, Nigeria, China, India and parts of Europe. Even the more established agricultural powerhouses of North America, Russia and Australia are experiencing resurgent conditions. This has helped to push up global farmland asset values by more than 400 per cent since 2002. ‘Stranded assets’, where assets suffer from unanticipated or premature write-offs, downward revaluations or are converted to liabilities, can be caused by a range of environment-related risks. If and when environment-related risks materialise they can result in stranded assets across the agricultural supply chain. This could be at a sector or asset-specific level, such as with respect to processing facilities, or be felt across an entire commodity or region, potentially resulting in significant financial losses, degraded ecosystems and social upheaval. The University of Oxford’s Smith School of Enterprise and the Environment has published new research today that maps out these risks in agriculture and shows how they might affect agricultural assets. This is particularly relevant now given how much capital has been invested into the sector over a relatively short period of time. The risks investigated range from the spread of pests and diseases through to changing biofuel regulations. The research systematises the different risks that could affect assets across the agricultural supply chain and completes a high-level assessment of where and how risks might affect these assets. A high-level Value at Risk assessment (VaR is a measure of risk used in the capital markets and by financial regulators) has also been completed to give an indication of the magnitudes of capital exposed. As part of the VaR analysis we set out three scenarios to test to what extent declining natural capital could place the stock of invested capital in agriculture at risk globally: the first scenario represents current levels of natural capital, the next a medium level of loss of natural capital, and third a situation of extreme loss of natural capital. Each of these scenarios represents escalating levels of risk. Under the extreme loss of natural capital scenario, we found that the loss measured by the 0.5 per cent VaR could almost double from $6.3trn to $11.2trn. In other words, there is a 0.5 per cent chance of the annual loss being more than $11.2trn. The research also found that under the same scenario, but at the five per cent VaR, there is a 1/20 chance of the annual loss being greater than $8trn. At both the 0.5 per cent and five per cent VaR there is clearly significant potential for asset stranding. The 0.5 per cent VaR is of interest to the insurance sector as this corresponds to the Solvency II regulation, which requires insurers to determine their solvency capital requirements at this level of risk. The speed at which risks materialise is also important to understand, with fast-moving risks being harder to manage than slower-moving ones. For example, regulatory change is often fast moving, but, at the other end of the spectrum, physical risks such as climate change tend to manifest themselves more slowly. As well as the speed of change, understanding when risks are likely to materialise is essential. Risks can be classified along a continuum from the short term to the very long term. For example, biofuel regulation is part of current problem agendas facing many governments. At the other end of the spectrum, classic problems of the commons such as declining ecosystem services, water quality and land degradation are longer-term risks. Such problems often take a long time to manifest themselves, and are difficult to remedy once they have occurred. In addition to investigating the timing aspects of environment-related risks in agriculture, the research has evaluated how asset stranding might affect different types of agricultural asset to indicate sensitivity to each risk factor. The research has applied this evaluation to natural assets (e.g. farmland water), physical assets (e.g. animals, crops, on-farm infrastructure ), financial assets (e.g. farm loans, derivatives), human assets (e.g. know-how, management practices) and social assets (e.g. community networks) respectively. There are three main conclusions that are emphasised throughout the research from Oxford’s Smith School. First, environment-related risk factors are material and can strand assets throughout the agricultural supply chain. The amount of value potentially at risk globally is significant. Second, the potential challenge of stranded assets in agriculture is currently being exacerbated by an ongoing agricultural boom, which is feeding off high commodity prices and poor investment returns elsewhere in the economy to push farmland values to record highs in many markets. Third, understanding environment-related risks that can induce asset stranding can help investors, businesses and policy makers to develop effective risk management strategies, which can improve resilience and minimise value at risk. Businesses, investors and governments are increasingly facing complex risks, embedded in local markets, but with global consequences. Environment-related risks in agriculture are of this nature and can have knock-on effects elsewhere in society. For example, the Arab Spring has demonstrated how water supply constraints in North Africa, coupled with extreme weather in Russia, can affect food security and prices and contribute to governmental collapse and broader geopolitical tension. So while it may be impossible to completely prevent or accurately forecast how environment-related risks might materialise, much of recent history has reminded us that people do not make reasonable preparations for risks that have been foreseeable. Investors, businesses and policy makers need to take steps today to better manage environment-related risks across the agricultural supply chain. This will be key to ensuring the sector’s long-term environmental, as well as economic, sustainability. Ben Caldecott is a co-author of the report, Stranded Assets in Agriculture: Protecting Value from Environment-Related Risks, which can be downloaded here Continue reading
Farmland Price Growth Slows; Bankers Cautiously Optimistic State-By-State Outlook
Jul. 25, 2013 Burt Rutherford While growth for the rural mainstreet economy remains healthy, it slowed a bit in July. What a difference a year makes, for some at least. While drought continues to grip some regions in cattle country, ample and sometimes more-than-ample moisture has returned to others. “Last year at this time, the drought was having a significant negative impact on the rural mainstreet economy. This year, ample moisture has boosted the rural economy and the banker’s economic outlook,” says Ernie Goss , the Jack A. MacAllister Chair in Regional Economics at Creighton University in Omaha, NE. For the future, bankers’ eyes are on Washington . “More than three-fourths, or 77.9%, of bankers think that congressional passage of a new farm bill is important or crucial to the rural mainstreet economy,” he adds. Additionally, energy production has become increasingly important in the rural economy. According to Jim Stanosheck, CEO of State Bank of Odell in Odell, NE, “The area has about 45 wind generators being built in the next six months. This activity should spur the rural economy for the next 6-7 months.” According to a monthly survey of 200 rural bankers in a 10-state region, conditions in rural America are generally good, despite slowing growth in farmland values and predictions for lower farm income this year. Here are the results of the July survey, with 50 indicating growth-neutral. Farming: The farmland-price index (FPI) declined for the seventh time in eight months, falling to 58.2 in July from June’s 58.4. “FPI has been above growth neutral since February 2010. However, lower farm commodity prices and expected declines in farm income are slowing growth in farmland prices. I expect farmland price growth to continue to weaken as a stronger U.S. dollar weighs on agriculture commodity prices,” Goss says. This month, bankers were asked to project farm income for 2013. On average, bankers expect farm income to be down 3% from 2012. Among bank CEOs, 59.6% expect farm income to be down from 2012, while 19.5% anticipate an increase in farm income and the remaining 20.9% expected no change. Farm equipment sales also softened for July, indexing at 50.0, down from June’s 53.2. “Farmers are getting increasingly cautious regarding economic conditions. This has been reflected in declines in our equipment-sales index and in the stock prices of agriculture equipment producers,” Goss reports. Banking: The loan-volume index moved above growth neutral for July, soaring to 75.7 from June’s 66.7. The checking-deposit index advanced to 53.7 from June’s 48.5, while the index for certificates of deposit and other savings instruments increased to a very weak 42.0 from 33.6 in June. Community bankers are more upbeat that Congress will address the increasing concentration of U.S. banking. As reported by Pete Haddeland, CEO of the First National Bank in Mahnomen, MN, “TBTF (too big to fail) is gaining some traction (in D.C.).” Enjoy what you are reading? Subscribe now to BEEF Cow-Calf Weekly for more practical commentary from beef industry blogger Troy Marshall. Bankers were also asked about the impact of the f ederal spending sequester . Only 1.5% reported significant impact, while 34.3% indicated moderate impact; the remaining 64.2% reported no impact from the spending sequestration. Hiring : July’s new hiring index (NHI) declined to a strong 60.7 from June’s 61.4. “Readings over the past several months are consistent with an annualized growth rate in jobs of 1%. Businesses linked to agriculture and energy continue to add jobs at this slow, but positive pace,” Goss says. Confidence: The confidence index, which reflects expectations for the economy six months out, fell to 56.6 from 60.0 in June. “While healthy crop conditions have fortified the economic outlook, recent weaker-than-expected agriculture commodity prices have lowered that outlook,” Goss says. Home and retail sales : The July home-sales index slipped to 76.6 from June’s record high of 78.1. The July retail-sales index slipped to 53.1 from 53.9 in June. “Slightly higher mortgage rates failed to slow the rapidly improving rural mainstreet housing sector,” Goss says. State-by-state outlook Here’s a state-by-state rundown of rural mainstreet economic conditions: Colorado: For a 10th straight month, Colorado’s rural mainstreet index (RMI) remained above 50.0, as July RMI declined to a still robust 70.5 from June’s 81.2. FPI declined to a strong 75.5 from June’s 80.3. Colorado’s NHI for July slipped to 73.0 from June’s 75.7. Bankers reported problems for certain segments of the rural economy. According to Fred Bauer, CEO of Farmers Bank in Ault, “Dairies are still struggling with (high) f eed costs .” Illinois: While RMI declined in July to 57.6 from June’s 61.6, it’s remained above growth neutral for 10 straight months. FPI sank to 49.1 from 49.4 in June, while NHI dipped to 54.3 from 55.2. Iowa: July RMI expanded slightly to 62.3 from June’s 62.2, and FPI advanced to 54.6 from 49.6 in June. July NHI improved to 58.0 from June’s 55.3. As reported by Steven Lane, CEO of Security Savings Bank in Farnhamville, “Most of the crops in our area were planted late. It’s now up to Mother Nature to see if it amounts to much.” Kansas: RMI decreased to 59.2 from June’s 60.5, while FPI sank to 46.6 from June’s 49.6, and NHI decreased to 52.7 from June’s 56.7. Kansas bankers remain hopeful but cautious on the farm economy. Minnesota: RMI tumbled to a 53.4 from June’s 59.7. FPI fell to 51.3 from 58.5 in June, while NHI declined to 55.8 from last month’s 61.2. Pete Haddeland, CEO of the First National Bank in Mahnomen, says the crops look great. Missouri: RMI rocketed to a regional high of 81.2 from June’s 59.2, while FPI remained strong at 78.9, but down from June’s 81.5. NHI rose to 84.2 from June’s 76.7. Nebraska: After moving below growth neutral for January, RMI has moved above growth neutral for six straight months. RMI climbed to 58.0 from 56.5 in June, while FPI fell to 48.5 from June’s 59.2. NHI dipped to 53.9 from June’s 53.7. Weather remains a problem for some parts of the state. Bill McQuillan, president of CNB Community Bank of Greeley, says, “Pasture conditions continue to deteriorate because of the lack of moisture in the last 30 days.” North Dakota: RMI dipped to a 78.4 from June’s 81.8, and FPI declined to 82.4 from June’s 87.6. NHI declined to a still very strong 76.5 from June’s 80.6. South Dakota: RMI slipped to 59.9 from 60.5 in June, while FPI slumped to 50.8 from June’s 51.5, and NHI decreased to 55.5 from June’s 56.5. As in other areas of the region, farm conditions are up significantly from last year. David Callies, CEO of Miner County Bank in Howard, reports that crops are doing very well. Wyoming: RMI rose to 53.0 from June’s 52.6, while FPI grew to 41.9 from June’s 40.8, and NHI to 49.6 from June’s 49.4. Continue reading
