I enjoyed some useful input from the Cranfield University Sustainability Group on the path to NetZero. This fascinating input came from Prof. Paul de Leeuw from Aberdeen University Energy Transition Institute. With the COP26 summit in Glasgow in November, plus the G7 Summit in Cornwall in June, how we manage climate change remains significantly on our agenda.
I was especially struck by the changes we will have to make on a personal level to move to net zero carbon emissions by 2050 – the proposed target date.
I took a poor-quality image of Prof de Leeuw’s slide on my screen, and while the picture is hazy the message should be clear:
While we still endure the pandemic then not flying so much should be easy enough. I have not got on a plane since March 2020.
Hanging clothes out to dry sounds great in principle, but more difficult in practice in the wettest May on record (we think) in the UK.
The move to electric car, then car free, especially caught my eye.
I am personally exploring the change to electric cars via a great scheme from Coventry City Council, Electric Fleet First. Under this scheme they have lent me one of their electric cars to try for 2 months.
It’s an interesting experience, and after one month I already have a view on some of the advantages and disadvantages.
On the plus side:
- The car itself is really quiet, smooth and comfortable. The motor industry has been trying for decades to minimise NVH (noise, vibration, harshness) – electric cars do this in way only matched by Rolls Royce.
- Must be good for the environment – I have driven over 500 miles now without going to a petrol station.
- It must be cheaper to run.
On the other side:
- Charging from a domestic plug socket takes a long time: over 18 hours in one case.
- Charging from a public socket is even more demanding. My first attempt took 30 minutes to get connected, and another 35 + minutes to get disconnected. All for 26 miles of charge, a net gain of 2 miles.
- I am learning the meaning of ‘range anxiety’. The range – around 180 miles on a full charge – does not cause the anxiety. It is the uncertainty of whether you can find a charger, and especially how long it will take to charge. If it only took a few minutes, say the amount of time taken to fill my petrol fuelled car’s tank, there would be no issue.
- I have no idea how much this is costing in electricity. With petrol or diesel, you see clearly the cost. Without getting a separate meter, I have no idea. Surely it is only co incidence that my electricity provider has, just yesterday, told me my monthly direct debit payment is increasing?
The public charging experience was so comically bad it made me grateful I am trying this car out first before having bought one. Had I just paid the £29,500 or so list price I would have been far less impressed.
My overall reflections so far are twofold.
Firstly how grateful I am to be able to try this out: huge thanks to Coventry City Council.
Secondly, I know the UK government has a deadline of 2030 to end the sale of petrol & diesel cars. I think I know realise why this is mandated.
If it were not made into law, it would not happen.
Buzzwords of the Week – CAPE (Cyclically Adjusted Price Earnings) Ratio
Definition – This is a valuation measure that uses real earnings per share (EPS) over a 10-year period to smooth out fluctuations in earnings that occur over different periods of a business cycle. This ratio was popularized by Yale University Professor Robert Shiller, so is also known as the Shiller P/E ratio. The P/E ratio is a valuation metric that measures a stock’s price relative to the company’s earnings per share. EPS is a company’s net profit divided by the number of outstanding equity shares.
The ratio is generally applied to broad equity indices (like the FTSE 100 or S&P 500) to assess whether the market is undervalued or overvalued. While a popular and widely-followed measure, some have questioned its worth as a predictor of future stock market returns.
The Formula for the CAPE Ratio =Share price/10−year average, inflation−adjusted earnings
The historical average of the ratio for the S&P 500 Index is between 15-16, while the highest levels of the ratio have exceeded 30. The record-high levels occurred three times in the history of the U.S. financial markets: in 1929 before the Wall Street crash, the late 1990s before the Dotcom Crash, and in 2007 before the Financial Crisis.
Alternate View – Way more useful than a mere Price Earnings Ratio. I am also struck by the correlation between the high marks and market downturns. Shiller has been both lauded and vilified for his market predictions, he has not always got his calls correct. I think this is worth watching, and especially so given the historic context. This week the S&P 500 CAPE is 37: that’s above Black Tuesday 1929. Warning sign?
Reset Restart is a funded programme of webinars and coaching to help new and small businesses recover. This is available in selected locations across the country, I am working with Rob Harrison from Glued with eligible businesses in Worcestershire. Over the next week I am coaching a range of businesses and also running a webinar on finance. Details at https://www.eventbrite.co.uk/e/finance-making-keeping-your-business-profitable-3-of-4-tickets-143695580349?aff=ebdssbonlinesearch
Business Ready is a scheme providing funded business support for high tech startups around Warwick University. I am delighted to be helping them with online learning sessions on Finance, Business Planning, Pitching for Finance, Risk Management and Negotiation. I am running session on Pitching for Finance on June 4th & 8th. Have a look at the link and find out more.
You may also be interested in joining the discussion on HR Hot Topics at 1.00pm on Friday 11th with CIPD Coventry & Warwickshire. I will be there with Sonia Khera from Cactus HR. https://www.eventbrite.co.uk/e/online-cipd-cov-warks-hr-hot-topics-networking-meeting-tickets-154829315651?aff=ebdsoporgprofile
Online Learning – my online finance programme – How to Read Financial Statements. This is a series of 7 online lessons:
- How finance fits with Strategy
- The Language of finance
- Owning & Owing – using the Balance Sheet
- Measuring & Managing Profit
- Measuring & Managing Liquidity
- Budgets, what, why & how
- The most important part of all
Each last between 20 & 40 minutes and includes the slides and videos to help you understand what good looks like in financial terms.
This is now hosted on Vimeo – email me if you would like to learn more.