Best of the year: the business stories of 2021
Back in April, Credit Suisse got entangled in a “disaster pile-up” involving Greensill and Archegos. Eliot Wilson wrote of how the Swiss bank lost billions of dollars because of its relationship with the US based hedge fund Archegos and the now infamous Greensill Capital. This kind of economic catastrophe happens when banks have risk management teams without agency, able to give free rein to asset managers without listening to warnings.
The Swiss have learnt the hard lesson that disaster seldom travels alone.
Eliot Wilson
In July, the decision of the luxury fashion brand Ermenegildo Zegna to go public through special purpose acquisition (SPAC) raised some eyebrows. Simon King wrote about the unusualness of this business choice. It’s not always easy for luxury brands to do well in public listings, but Zegna could have a good chance, thanks to the strength of its brand and its historical presence in the Asian market.
There is a lot to like about Zegna as a business, and luxury goods as a sector for investment.
Simon King
In the middle of the fuel crisis, Sian Hansen took a moment to stop and reflect on the benefits of our capitalist system. Noting how capitalism is strongly associated with the idea of “good for business” rather than “good for people”, she wrote that actually businesses saved us during the pandemic. It was private companies, alongside the NHS, that enabled the vaccine rollout, for example. It’s time we reconnect to the core benefits of capitalism.
One of the questions from the last 18 months is whether this level of state intervention works? The answer must be an unequivocal no.
Sian Hansen
With Cop26 taking place in Glasgow at the beginning of November, we stopped to look at the role of green finance and ESG. Steve Hawkes wrote that more and more councils are choosing to work only with companies that have a clear green agenda and can prove it. Manchester City Council was the first local authority to trial the inclusion of a 10 per cent environmental weighting in its procurement process. Soon, doing the right thing could be the only way for companies to make money.
A number of councils want companies to commit to hiring locally. But critically, “social values” are now becoming part of the tender process.
Steve Hawkes
Finally, Sam Robinson looked at one of the big words of the year: tax. After raising the tax burden, Chancellor Rishi Sunak is trying to present himself as a tax cutting Tory. There’s only one issue: he realistically can’t be both. Cutting tax makes sense in the face of sustained economic growth, but we are only in the first stages of economic recovery after the lockdowns, and the Omicron variant does not bode well. The government should instead try to rebalance the tax burden, focusing on taxing wealth and not work.
To deliver long-lasting and meaningful tax reform, the Government must show greater consistency in its fiscal objectives, and greater vision in its approach to reform.
Sam Robinson
