Investment Rating - The report does not explicitly state an investment rating for the industry, but it emphasizes the potential for significant economic growth and job creation through industrial decarbonization efforts in Houston. Core Insights - Houston is positioned to lead in industrial decarbonization, leveraging its existing energy infrastructure and workforce to transition towards a low-carbon future [8][18][20]. - The report identifies four primary levers for decarbonization: energy efficiency, electrification, hydrogen substitution, and point-source carbon capture and sequestration (CCS) [11][40]. - The analysis presents three scenarios for decarbonization pathways: Business-as-Usual (BAU), Selective Investment (SI), and Net-Zero (NZ), each with varying levels of emissions reduction and economic implications [43][56]. Summary by Sections Part 1: Houston's Energy Leadership - Texas accounts for over a quarter of the U.S. energy production and has a significant refining and petrochemical capacity, positioning Houston as a critical player in the energy transition [18]. - The region has a history of reducing emissions through renewable energy integration, with coal and gas in ERCOT's generation profile decreasing from 86% in 2001 to 62% in 2023, while renewables increased from under 1% to 27% [8]. Part 2: Assessment of Houston's Industrial Decarbonization Levers - The report establishes a comprehensive emissions baseline for industrial activities in Houston, identifying major sources of emissions and potential reduction opportunities [35][37]. - The four primary levers for decarbonization are identified as energy efficiency, electrification, hydrogen substitution, and point-source CCS, which are crucial for reducing Scope 1 emissions [11][40]. Part 3: Results by Scenario and Lever - The SI scenario predicts over 76 million tons of Scope 1 emissions reductions by 2050 compared to the BAU scenario, with electrification being the most impactful strategy [14]. - The potential economic impacts of industrial decarbonization are significant, with the SI scenario estimating the creation of over 14,000 jobs annually, while the NZ scenario could see nearly 21,000 jobs added each year [14][16]. Part 4: Economic Outcomes of Decarbonization - The report highlights that industrial decarbonization investments will stem from upgrades to existing assets and new projects to meet global demand for decarbonized products [9][12]. - The analysis quantifies the economic growth and emissions reduction benefits achievable through industrial decarbonization, emphasizing the dual benefits of economic prosperity and environmental sustainability [16][29]. Part 5: Houston's Path Forward for Clean Growth - Recommendations for future considerations include leveraging policy support and international demand to drive industrial decarbonization efforts [9][25]. - The report concludes that Houston can maintain its competitive advantages by embracing decarbonization, which aligns with changing consumer preferences and regulatory landscapes [23][29].

Industry Overview - The Western Balkans region, comprising Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia, is highly vulnerable to climate change, with cities facing increased risks from extreme weather events such as floods, heatwaves, and droughts [16][17] - Urban areas in the region are particularly affected, with more than half of the population residing in cities that are experiencing rapid urbanization and demographic shifts, including population decline in smaller cities and growth in larger ones [16][31] - The region's cities are characterized by low population density, isolated housing units, and inadequate infrastructure, which exacerbate the risks posed by natural disasters and climate change [16][31] Climate Change Impact on Cities - The frequency of extreme heat events in Western Balkan cities has increased significantly, from 0.09 months per year in the 1990s to 1.32 months per year in 2011-2020, while extreme cold events have declined [44][47] - Both extreme dry and wet weather events have been on the rise since the 2000s, with the average number of extremely dry months increasing from 0.05 in the 1970s to 0.24 in 2011-2020 [51][52] - Cities in the region are more susceptible to natural hazards than their counterparts in the broader Europe and Central Asia (ECA) region, with heat stress, water stress, floods, and wildfires being the primary contributors to climate risk [54][55] Urban Development and Emissions - Urban sprawl in the Western Balkans has led to increased greenhouse gas (GHG) emissions and air pollution, with cities like Niš, Novi Sad, Pristina, and Sarajevo exhibiting unplanned growth patterns that exacerbate these issues [80][81] - Green and blue spaces in cities act as carbon and pollution sinks, but urban sprawl and soil sealing have reduced these areas, negatively impacting the carbon and pollution footprint of cities [82][84] - Poor waste management is a significant issue, with illegal dumpsites and poorly managed landfills contributing to methane emissions and worsening climate hazards such as wildfires [72][74] Resilience and Infrastructure Challenges - Cities in the Western Balkans face significant challenges in building resilience to climate change due to inadequate infrastructure, poor service provision, and high exposure to hydro-climatic hazards [79][92] - Informal settlements in the region are particularly vulnerable to climate risks, with poor-quality buildings and a lack of adaptation infrastructure increasing the risk of flooding, urban heat, and landslides [97][99] - The region's centralized but siloed approaches to disaster preparedness leave cities largely unprepared for large-scale disasters, with limited funding and capacity to address climate-related risks [105][107] Pathways for Sustainable Urban Development - To promote green, resilient, inclusive, and competitive cities, the report suggests revising zoning and land-use regulations, encouraging mixed-use development, and investing in sustainable mobility [19][20] - Nature-based solutions, such as green and blue strategies, are recommended to mitigate climate risks and improve the well-being of vulnerable communities [19][20] - Inclusive pathways involve community engagement, partnership building, and citizen empowerment to address inequality and promote social equity, while competitive pathways focus on private sector involvement and capital mobilization to drive economic growth [19][20]

Investment Rating - The report does not explicitly provide an investment rating for the Western Balkans region, but it indicates a moderate acceleration in economic growth, suggesting a cautiously optimistic outlook for investment opportunities [26]. Core Insights - Economic growth in the Western Balkans is projected to accelerate to 3.3 percent in 2024, up from 2.6 percent in 2023, driven by stronger domestic demand and expansionary fiscal policies [26][27]. - The region's labor market is improving, with employment reaching a historical high of 48.5 percent in June 2024, although challenges such as labor shortages and skills mismatches persist [26][27]. - The current account deficit is expected to widen to 5.6 percent of GDP in 2024, influenced by sluggish growth in key trading partners and a decline in net services export inflows [28]. Summary by Sections 1. Overview - The Western Balkans economies are navigating a complex environment, with growth expected to rely more on domestic demand than foreign demand in 2024 [26]. - Economic growth is supported by expansionary fiscal policies, rising credit availability, and easing price pressures, leading to increased consumption and investment [26][27]. 2. Growth Acceleration - Growth in 2024 is forecasted to be 3.8 percent for Serbia, 3.4 percent for Montenegro, and 2.8 percent for Bosnia and Herzegovina, with Kosovo also projected to grow at 3.8 percent [26][30]. - North Macedonia is expected to struggle with growth projected at 1.8 percent, reflecting ongoing economic challenges [26]. 3. Employment Trends - The labor market saw the creation of 114,000 jobs between mid-2023 and mid-2024, with Serbia and Bosnia and Herzegovina leading in job gains [26][27]. - Despite improvements, Kosovo's employment rate remains low at 37.1 percent, highlighting regional disparities [26]. 4. Poverty Reduction - Poverty reduction continues but at a slower pace, with an estimated annual decline of about 1 percentage point [26][27]. 5. Fiscal Policies - The average fiscal deficit for the WB6 is expected to increase to 2.5 percent of GDP in 2024, with Serbia maintaining its deficit level while Montenegro experiences the highest increase [27][28]. - Public debt is projected to rise slightly as a share of GDP, driven by increased spending pressures and capital investments [27]. 6. Inflation Trends - Inflation rates have decreased, with regional averages showing a decline from 4.4 percent to 3.2 percent by July 2024, although some countries still report higher rates [27][28]. 7. Financial Stability - Credit growth rebounded in 2024, reaching 9.4 percent in June, with Albania and Kosovo showing significant increases [27][28]. 8. External Sector Dynamics - The current account deficit is expected to widen, with Albania, North Macedonia, and Serbia projected to experience the most significant increases [28][29]. 9. Growth Outlook - The growth outlook indicates a shift towards consumption and investment as key drivers, with export demand remaining muted [28][29]. 10. Spotlight on Migration - Migration remains a significant issue, with nearly one in four people from the Western Balkans residing abroad, impacting labor markets and economic dynamics [29].

Industry Overview - The global payments industry handled 3.4 trillion transactions in 2023, accounting for $1.8 quadrillion in value and generating $2.4 trillion in revenue [6] - Payments revenue grew 7% annually from 2018 to 2023, driven by transaction digitization and higher interest rates, but growth is expected to slow to 5% annually through 2028 [6] - Net interest income contributes 47% of total payments revenue, up 3 percentage points from 2021 [8] - Asia-Pacific accounts for nearly half of global payments revenue, with commercial revenues increasing from 60% to 62% of total payments revenue from 2018 to 2023 [11][12] Key Trends Shaping the Industry 1. **Decline of Cash**: Global cash usage is at 80% of 2019 levels and declining 4% annually, with $26 trillion still transacted in cash [16] - Instant payments are rapidly replacing cash in developing markets like India, Malaysia, and Indonesia [18] - In card-dominated markets like the US, cash transactions represent just 5% of consumer payment value [18] 2. **Rise of Instant Payments**: Instant payments are displacing other methods, with two types of markets emerging - card-entrenched (e.g., US, UK) and cash-heavy (e.g., Brazil, India) [19][20] - In the EU, instant payment transactions are expected to grow from 3 billion to 30 billion by 2028, a 50% annual growth rate [21] 3. **Digital Public Infrastructure (DPI)**: DPI initiatives in markets like Brazil, Estonia, and India are catalyzing digital payments through digital ID systems and interoperability [22][23] - India's UPI has been successfully launched in 10 countries, including Singapore and the UAE [25] 4. **Platform Aggregation**: Commerce is aggregating onto platforms like Shopify and Amazon, which process 30% of global consumer purchases [26] - Vertical-specific software solutions captured over 50% of SME spending in the US in 2023 [27] 5. **Transaction Banking Evolution**: Transaction banking is becoming a differentiator for leading institutions, with banks like Citi and HSBC emphasizing these units [31] - Commercial customers are demanding intuitive interfaces and faster integration of bank and corporate systems [31] 6. **Central Bank Digital Currencies (CBDCs)**: Over 90% of central banks are pursuing CBDC projects, with more than 30 pilots launched [33] - CBDCs are expected to set the baseline for digital currency functionality and cost [33] Growth Opportunities - **Cross-Border Payments**: Initiatives like Project Nexus are connecting domestic instant-payment schemes across countries, with 23% of UK SMEs using nonbank providers for cross-border payments [36][38] - **Treasury Management**: The digitization of CFO offices is accelerating, with fintechs like Taulia and C2FO scaling their offerings [39] - **Payouts and Payroll**: Instant payments are enhancing gig economy worker satisfaction and customer loyalty through immediate compensation and refunds [42][43] Challenges and Investments - **Fraud Prevention**: Fraud in online commerce is rising twice as fast as transaction volume growth, with global losses from payment card fraud projected to reach $400 billion over the next decade [44][45] - **Infrastructure Modernization**: Payments players must invest in real-time infrastructure and technology to remain compliant and competitive, with instant payments requiring 24/7/365 availability and enhanced fraud prevention [48][49] - **Regulatory Pressure**: Regulators are intensifying demands for faster, more efficient payment processes while maintaining low costs and increasing consumer protections [51][54]

Investment Rating - The report does not explicitly state an investment rating for the steel industry but emphasizes the growing importance of scrap steel as a critical resource in the transition to greener steel production methods. Core Insights - The steel industry is under pressure to decarbonize, with a focus on reducing CO2 emissions by transitioning from traditional blast furnaces to Direct Reduced Iron (DRI) and Electric Arc Furnaces (EAF) [2][6][9] - The demand for steel is projected to rise, making the decarbonization of steel production essential for achieving sustainability goals [2][5] - The scarcity of clean scrap steel is expected to drive prices higher, highlighting the need for steelmakers to secure sufficient scrap supplies [3][24] Summary by Sections Industry Overview - Steel production accounts for approximately 7% of global CO2 emissions, necessitating urgent action to reduce its carbon footprint [4][6] - The European Union aims to cut CO2 emissions from steel production by nearly 25% by 2030, reflecting regulatory pressures on the industry [2][6] Technological Transition - The shift from blast furnaces to DRI and EAF technologies is crucial for reducing emissions, but it requires significant investments and a reliable supply of competitively priced green energy and scrap steel [3][10][12] - EAF technology is mature, while DRI technology is still developing, with no large-scale hydrogen-powered DRI facilities yet operational [14][15] Scrap Steel Market Dynamics - The report highlights the increasing global competition for scrap steel, particularly clean scrap, as demand grows due to the transition to EAFs [5][24] - In Europe, an estimated annual shortage of 9 million tons of scrap is projected by 2030, which will likely increase prices and competition for supplies [24][25] Investment and Economic Considerations - Meeting the EU's 2030 targets requires an estimated €85 billion in investments, with significant reliance on state subsidies to fund new green steel projects [15][16] - The cost of processing scrap steel is competitive compared to DRI processes, making it an economically viable option for steel production [22][24] Strategic Recommendations - Steel producers are encouraged to build ecosystems and circular economies to secure scrap supplies through partnerships and acquisitions [34][35] - Companies should explore global sourcing for cost-effective scrap, particularly from regions like Africa and Latin America, to meet growing demand [34][35]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The role of Chief Sustainability Officers (CSOs) has evolved significantly, transitioning from an entrepreneurial role to a professional and integrated function within corporate governance, compliance, and accountability [7][8] - CSOs are currently at a crossroads, facing increased visibility and pressure while needing to balance compliance with innovation and strategic foresight [10][12] - The sustainability field has matured through phases of voluntary adoption, ambition, turbulence, and is now moving towards professionalization and regulatory integration [8][20] Summary by Sections Executive Summary - The report synthesizes findings from interviews with 31 CSOs across various regions, highlighting the evolving role of CSOs amidst rapid changes in the sustainability landscape [7] - It emphasizes the heightened expectations and pressures faced by CSOs, noting the current moment's dichotomy of increased visibility and potential overemphasis on compliance [7][8] Chapter 1: The Sustainability Field Has Matured After Periods of Rapid Growth and Turbulence - The sustainability field has transitioned from voluntary adoption to a more regulated environment, with CSOs facing multiple challenges including backlash against ESG initiatives and increased regulatory compliance [8][24] - The number of companies with dedicated CSOs has grown significantly, indicating a maturation of the role [22] Chapter 2: CSOs Are Finding Success in Increased Professionalization and Integration of Sustainability - Many CSOs report improvements in organizational structure, allowing sustainability to become a central corporate function rather than a peripheral one [9][34] - The number of sustainability reports citing the CEO as responsible for ESG strategy nearly doubled from 18% to 32% from 2023 to 2024, indicating a shift towards greater integration [34] Chapter 3: Now Is the Moment to Reassert an Ambitious Vision of the CSO - The report identifies three potential paths for CSOs: the Steady Manager, the Integrated Strategist, and the Transformative Change Agent, each with distinct roles and impacts on corporate strategy [10][55] - The Integrated Strategist incorporates sustainability into core business decisions, while the Transformative Change Agent seeks to reshape business models to address sustainability challenges [51][55] Closing Thoughts - The report emphasizes the urgency for CSOs to reclaim their role as visionary leaders in sustainability, advocating for innovative approaches to address pressing global challenges [58][60] - It calls for new business models and transformative partnerships to harness the private sector's potential for real progress in sustainability [60]

Industry Overview - The global banking industry generated $7 trillion in revenue and $1.1 trillion in net income in 2023, with a return on tangible equity (ROTE) of 11.7% [7] - The industry intermediated $410 trillion in assets globally in 2023 [8] - Banking remains the largest profit-generating sector globally, surpassing the combined net income of the energy and industrials industries at $1.15 trillion [10] - Despite strong performance, the industry faces skepticism with a price-to-book ratio of 0.9, the lowest among all sectors [12] Performance Drivers - Recent performance improvements are largely attributed to rising interest rates, with net interest margins (NIMs) increasing significantly [6][16] - Labor productivity growth in banking has been mixed, despite high tech spending, with US banks showing declining productivity [27][29] - Regulatory changes continue to require significant investment, adding to operational costs [6] - Competition from non-traditional players, such as private credit and fintech, is intensifying in profitable segments like payments and wealth management [6] Structural Challenges - The industry's profitability is uneven across geographies, with countries like the US, UK, and India showing improved performance, while others like Brazil and China face lower ROTEs [18] - Scale economies remain elusive in many markets, with tech spending not translating into proportional productivity gains [27][29] - The cost of funds is expected to rise due to quantitative tightening and increased competition for deposits [32] Winning Strategies - Top-performing banks focus on a combination of structural advantages (segment selection, scale, and geographic positioning) and operational execution (analytics, marketing, and tech) [6][36] - 14% of banks have achieved a price-to-book ratio above 1 and a price-to-earnings ratio above 13, indicating strong value creation [37][38] - Winners often operate in attractive markets with high margins and strong fundamentals, such as Australia, Canada, and India [41][42] - Execution excellence, including granular pricing, risk selection, and customer-centric strategies, drives outperformance [52][53] Future Outlook - If interest rates decline, NIMs could compress by 50-60 basis points, potentially reducing ROTE to near cost of capital levels [17] - Banks will need to reduce costs by 5% annually to maintain current ROTE levels, a significant challenge given historical cost reduction rates of 1% [31] - AI and advanced analytics offer potential for productivity gains, but widespread adoption and impact remain in early stages [27][57] Management as a Differentiator - 10% of banks have improved their ROTE by five or more deciles over the past decade, demonstrating the potential for breakout performance [58][59] - Management teams must focus on structural and executional leverage, including scale, portfolio mix, and operational efficiency, to drive value creation [62] - Successful banks often adopt a "management quotient" that emphasizes agility, talent optimization, and strategic focus to outperform peers [58][62]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The paper identifies key challenges in health care and long-term care as populations age, particularly in developing countries where rapid demographic transitions are occurring [6][14] - A holistic strategy is needed to strengthen health care and long-term care systems, focusing on universal care coverage and shifting from a disease-centered to a person-centered approach [15][16] - The importance of promoting healthy lifestyles throughout the life course is emphasized, as early health choices significantly impact aging [15][16] Summary by Sections Overview - Population aging increases the likelihood of disease, disability, and loss of functional autonomy, putting pressure on health care and long-term care systems [13][19] - Developing countries face unique challenges due to rapid demographic transitions and resource constraints, necessitating proactive government interventions [20][19] Main Trends in Longevity - Global average life expectancy at birth rose from 47.0 years in 1950 to 72.6 years in 2019, with projections indicating it will reach 77.1 years by 2050 [23][24] - The share of individuals aged 65 and older is expected to rise from 9% in 2019 to 16% by 2050, with significant increases in middle-income countries [26][23] Aging, Health, and the Challenges for Health Care Systems - Population aging leads to a rise in chronic diseases and multimorbidity, complicating health care delivery [41] - Health care systems must adapt to ensure coverage, access, and affordability while shifting towards a person-centered, holistic approach [41][42] - The prevalence of chronic diseases is projected to increase significantly, with 83% of global deaths expected to be caused by chronic diseases by 2060 [43][42] Increasing Risk of Functional Dependency and Challenges for Long-Term Care Systems - There is a rising need for long-term care services due to increasing functional dependency among older adults [17][18] - Long-term care services should be accessible, affordable, and person-centered, promoting home care options [17][18] - Integration between social care and health care sectors is crucial for efficient service delivery [18] Final Remarks and Key Policy Considerations - The report calls for increased coordination between health and social care sectors and emphasizes the need for capacity building among human resources in these fields [18] - Addressing distributional issues related to aging, such as gender gaps and socioeconomic inequalities, is essential for effective policy responses [39][40]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights that firms in sectors more amenable to remote work experienced a smaller adverse impact from the COVID-19 pandemic in countries with better digital infrastructure [2][13] - The benefits of remote work during the pandemic were more pronounced for exporters in the manufacturing sector compared to non-exporters, indicating a premium associated with exporting [2][13] - The positive effects of remote work flexibility enabled by digitalization do not diminish over time [2][13] Summary by Sections Introduction - The pandemic-induced economic crisis highlighted the importance of digital technologies for firms to mitigate economic losses [6] Data and Descriptive Statistics - The study utilized data from 68,007 firm-level observations across 61 countries, with a significant portion being micro and small firms [20] Empirical Strategy - The analysis focused on the interaction between remote work amenability and digital infrastructure to assess firm resilience during the pandemic [25] Results - Firms in sectors with higher remote work feasibility showed more resilient sales performance in countries with better digital infrastructure, with a statistically significant coefficient of 0.979 for the change in sales [31] - Exporters in sectors amenable to remote work experienced a smaller average sales decline compared to non-exporters, with a notable difference of 6%-7% [33] - The report indicates that the gap in sales decline between different sectors is more pronounced in countries with lower internet usage [35] Robustness Checks - The findings remained consistent when alternative measures for remote work and internet penetration were applied, confirming the robustness of the results [36] Heterogeneous Effects - The impact of digital connectivity and remote work on firm resilience varied across sectors, with significant effects observed in the manufacturing sector for both exporters and non-exporters [47]

Investment Rating - The report does not provide a specific investment rating for the industry Core Insights - The marriage penalty in South Asia significantly reduces women's labor force participation by 12 percentage points, while the marginal penalty of childbearing is relatively small, indicating that marriage itself imposes constraints on women's employment opportunities [3][15][61] - The findings suggest that social norms and opportunity costs play crucial roles in the marriage penalty, with educated women experiencing smaller penalties compared to those with lower education levels [19][63] Summary by Sections Introduction - The report discusses the persistent gender inequality in labor market outcomes, particularly focusing on the marriage penalty and its implications for women's labor force participation in South Asia [7][8] Data and Empirical Strategy - The analysis utilizes data from the Demographic and Health Surveys (DHS) across four South Asian countries, employing a pseudo-panel approach to separate marriage and child penalties [23][24][27] Results - The marriage penalty is quantified, revealing that it accounts for 75% of the combined family formation penalty, with the largest effects observed in India [15][41] - Men, in contrast, experience a marriage premium, with an average increase in employment of 12.8 percentage points post-marriage [41][45] Determinants of the Marriage Penalty - The report explores various factors influencing the marriage penalty, including urban versus rural residence, education levels, and gender attitudes [46][50] - Higher education for women significantly mitigates the marriage penalty, while the education of husbands also plays a role in shaping household norms [54][63] Conclusion - The report concludes that the marriage penalty is a significant barrier to female labor force participation in South Asia, driven by both social norms and opportunity costs, and emphasizes the importance of promoting gender equality and education to alleviate these penalties [61][64]