How the Dutch Meat Tax could affect the global food and beverage industry


In an effort to reduce emissions and encourage healthier, greener lifestyles across Western Europe, many national governments are now taking up the idea of a levy or tax on meat, with an accompanying subsidy of fruits and vegetables. The goal would be to increase the price of meats like beef, pork, and chicken to better reflect environmental costs, which until now have not been reflected in the prices of these products. These environmental costs include CO2 emissions, as well as biodiversity lost to unsustainable farming practices. 

Since Western European countries are some of the biggest consumers of meat in the world, this tax could potentially have a huge impact on exports. Most citizens of Western European countries consume an average of 80-90kg of meat per year, ten times the average of less developed countries like Rwanda and Ethiopia.   

This tax and subsidy combination has the potential to have a hugely positive impact on the area as a whole, starting with the first countries that are discussing possible implementation, like in the Netherlands.  In this article we’ll discuss the Netherlands’ history with this proposal, and the potential outcomes if it’s introduced as promised in the coming months.

Background on the Meat Tax Proposal in the Netherlands

The Dutch Ministry of Agriculture, Nature and Food Quality recently announced plans to introduce this proposal to the Dutch Parliament in a session on April 22, 2021.

Although the Netherlands is one of the first individual EU countries to propose introducing the meat tax at a national level, it first came to international attention when it was discussed as part of a European Parliamentary session on February 5th, 2021.

The proposal was based on a report presented to MEPs by the True Animal Protein Price (TAPP) Collective, an organisation that seeks to introduce “effective policy measures aimed to lower consumption of meat and dairy by introducing fair prices for meat and dairy products, including environmental and other costs.” The coalition is made up of farmers, animal welfare and climate activists, as well as food companies.

Effectively, the TAPP Coalition’s proposal would introduce a higher tax on meat (some have proposed up to a 30% increase), which would be used to offset VAT on fresh produce by as much as 10%. It’s estimated that within the next 10 years, this could result in a fund of €32.2 billion per year spread across the EU Member States, which could be used to assist farmers who want to invest in more sustainable agricultural practices.

How It Could Affect Meat Exports in the Netherlands

After the meat tax proposal was created, market research company DVJ Insights was brought in to survey the general population in countries like the Netherlands, Germany, and France. They found that this proposal was broadly popular, and was surprisingly even more popular among members of traditionally centrist-right wing parties like Germany CDU/CSU and the Netherlands’ CDA, CU, SGP, and VVD. Overall, estimates put support at a robust 70% of Europeans.

The Dutch Minister of Agriculture, Nature and Food Quality has been pressed to give some insights on how this proposed tax could affect food and beverage businesses, as well as general consumers. She has said that she expects businesses to pass on these higher food costs to consumers at a rate of 75%. As long as businesses pass on these new taxes equally, the market will remain competitive.

In addition, the proposed tax on meat will hopefully lead to lower prices of fresh produce, which should encourage greater consumption of healthy and sustainable fruits, vegetables, and related products. In the end, most families may notice a small increase or even a reduction in their grocery spend, if they’re able to buy less meat, and take advantage of the lower cost of produce to purchase more of these items.

How This Tax Could Affect Dutch Competition on the Global Market  

Most members of the Dutch Parliament support this tax proposal because they believe that it will have a net positive effect on their country’s ability to compete in a crowded export market.

By making more money available to invest in sustainable farming initiatives, they can support the next generation of farmers to ensure that they have what they need to succeed in a competitive global market.

However, some meat producers have pushed back against the data set used to determine the proposed tax. “The report does not take into account the protein density of meat,” says a spokesperson for the Liaison Centre for the Meat Processing Industry. “If emissions were calculated on the basis of essential amino acids instead of weight, the production of some crops that are used as a source of ‘alternative’ proteins would become more emissive than beef, pork or chicken.”

Determining the Outcome of the Proposed Meat Tax

Ultimately, this comment from the Liaison Centre for the Meat Processing Industry shows that there is still a lot to be determined before the Netherlands, any other EU country, or the EU itself puts a higher tax on meat in place. Although net positive effects on public health and healthcare costs, sustainability, and animal welfare can be expected, governments still must commit to consultation with meat producers and agribusinesses to ensure that they’re able to weather this change along with consumers.

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Why accounting firms are best placed to offer cybersecurity services


Cybersecurity is a major concern for businesses of all sizes. In fact, the threat of a successful cyber-attack increases every year. Without a protection plan in place, your business, customers, and data are all vulnerable. Even worse, if a cyber-attack occurs, you may never recover from the damage to your reputation and the cost of dealing with the fallout.

Working with our accounting firms that also provide cybersecurity services is one of the best ways to protect your business. In fact, our teams are uniquely suited to provide these critical services. Here are a few reasons why:

1. We’re trusted business advisors

Many large accounting firms already provide their clients with security and control-related services. This may include auditing, examinations, and advisory services. Since you already trust your accounting firm to help you achieve your business objectives, so it’s not a far leap to extend the services they provide.

Rather than spend valuable time interviewing a new firm that you’re not sure you can trust, adding new services from your accounting firm will save you time and give you additional peace of mind.

2. We take a holistic approach

Involving all levels of an organization’s management and your most trusted advisors allows you to take a holistic approach to your cybersecurity, rather than piecemealing it together. Considering how quickly the business and cyber landscapes change, this is truly the only way to stay ahead of the continually evolving threats and risks facing your business.

Accounting firms that offer cybersecurity services often have multidisciplinary teams that bring a combination of unique strengths to the table. From expertise in performing audits to extensive IT and cybersecurity knowledge, a knowledgeable accounting firm is uniquely positioned to detect potential vulnerabilities and provide actionable advice to help minimize risk.

3. We’re experts in preparation and protection

Properly protecting your firm from cyber-attacks requires organization and attention to detail. Trusting your accounting firm to handle your cybersecurity means you’re choosing an expert who is already familiar with much of the data and information that requires protection.

Since we’re already knowledgeable about the interior workings of your firm, your accountant can easily detect areas of vulnerability and make recommendations to close any potential areas of weakness.

4. You’ll Enjoy Cost Savings

While many cybersecurity firms cater to large businesses and organizations, the threat is very real for businesses of all sizes. Working with accounting firms that offer cybersecurity is often a much more cost-effective solution for small and medium-sized business owners.

Is Your Company Currently at Risk?

Now that you understand the benefits of working with an accounting firm that offers cybersecurity services, you may wonder whether your company is currently at risk. In almost all cases, the answer is yes!

If your business handles any type of sensitive client data, you’re responsible for protecting it. This includes Personally Identifiable Information (PII), Protected Health Information (PHI), and cardholder data. There are a variety of laws in place that dictate your responsibilities.

For example, if you’re located in the United States, you must follow the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Payment Card Industry Data Security Standard (PCI), and other applicable laws. There are also state breach notification laws that clearly explain your cybersecurity compliance obligations. In Europe, you’re required to follow General Data Protection Regulation (GDPR) rules. Failing to meet the rules that apply to your business and location can land you in serious trouble and cause irreparable damage to your business and your brand.

Companies that are considering or are currently undergoing a merger or acquisition or that have insufficient IT resources may experience even more cyber-vulnerability.

If any of these circumstances apply to your business, it’s important to consult with a cybersecurity expert as soon as possible.

Common Types of Cyber Attacks

Understanding how to avoid cyber attacks is one of the most important things you can do to protect your business. Here’s a look at some of the most common types of attacks business owners face:

1. Phishing

Unfortunately, phishing attacks are becoming more common and more sophisticated. They often arrive in the form of an email that looks legitimate but is designed to dupe you into providing valuable information like your passwords or credit card information. These emails will often appear to come from your bank, a large retailer, or other trusted entity.

2. Malware

The term “malware” is short for “malicious software.” It’s unwanted software that is installed on your device or system without your knowledge or permission.

There are many different types of malware. Some, like spyware, are designed to track what you’re doing and gain access to your credentials and other valuable data. Others, like ransomware, are created to extort the victim while still other types are simply designed to create some type of disruption.

3. SQL Injection

If your business uses a database-driven website and the permissions are not set properly, attackers may be able to exploit the system to read, modify, create, or delete the data stored in your database. In some cases, they may also be able to shut down the database, recover deleted content, and even issue commands to your operating system.

Learn More About HLB’s Cybersecurity Services

HLB’s Cyber and Information Security Systems team is dedicated to helping businesses and organizations prepare for and protect themselves against cyber-attacks. If an attack occurs, we’ll provide you with the immediate support you need to quickly respond and recover, so you can minimise potential damage to your business.

To learn more about our cybersecurity services, contact us for a free proposal.


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Whistleblowers protected by EU Directive from December 2021!


Until the introduction of the EU Directive on this subject, only a few EU countries had comprehensive legislation on the protection of so-called whistleblowers (the Netherlands, Norway, UK). Other countries limited themselves to reporting misconduct only in the public sector (Belgium).

With the introduction of this EU Directive, this is now extended to both the private and public sector and to all EU countries. The EU Directive obliges the member states to enact legislation by 17 December 2021 that will better protect the potential whistleblower in the private or public sector who report infringements of EU legislation.

These include, for example, breaches of financial services, consumer protection, data protection, GDPR, product safety, transport safety, food safety, environmental protection, public health, etc.

The Directive protects whistleblowers who have obtained information about breaches in a work-related context. This may not only concern employees or civil servants, but also applicants, former employees, self-employed persons, shareholders, directors, trainees and anyone who works under the supervision and direction of (sub) contractors and suppliers.


Its most notable features are:


  • Effective, confidential and secure reporting channels
    • The Directive imposes an internal hotline for (i) legal entities in the private sector of at least 250 employees by 17 December 2021 (50 employees – 17 December 2023) and for (ii) all legal entities in the public sector (although Member states may provide for an exemption for municipalities with fewer than 10,000 inhabitants or fewer than 50 employees or other entities with fewer than 50 employees).
    • At member state level independent and anonymous external reporting channels
  • Protection against dismissal, witholding promotion, financial sanction, change of working hours, intimidation, harassessment
  • Confidentiality = protection against both identity and content
  • Protection not only for the whistleblower but also for those who assist him/her
  • Financial, legal and psychological support
  • Sanctions


Detection of occupational fraud

What is occupational fraud? One commits occupational fraud when individuals or groups of individuals make illegal use of their occupational position for personal advantage and victimise consumers, colleagues or/and the own organisation.

According to the last available Report to the nations for Western-Europe (2020 Global study on occupational fraude and abuse – ACFE), 43% of all occupational fraud is initially detected by a tip coming from employees (50%), customers (22%) or vendors (11%).  We can therefore expect that the number of reports of occupational fraud will increase significantly with the introduction of this legislative framework, and with that the volume of fraude investigations in the future. Furthermore, the study shows that median losses were nearly doubled at organisations without hotlines.

In general those who are closely involved with this subject prefer to refer to the term ‘reporters’ rather than ‘whistleblowers’, considering the courage it takes and the positive effect it brings to society.  Reporters can be crucial to bring to light incorrect behaviour, illegal activities and to save the ethical culture and values of an organisation, the environment, or even lives (product safety, food safety, public health).

Studies also show that staff members prefer to express their concerns regarding irregularities rather informally, choosing to talk to their direct supervisor (28%), the fraud investigation team (14%), internal audit (12%), a co-worker (10%), HR (6%) or other (15%).


How to protect your organisation against occupational fraud?

Still, according to the same Report to the nations, the most obvious anti-fraud controls in Western Europe are:

External audit 83%

Code of conduct 81%

Internal audit 74%

Hotline 64%

Anti-fraud policy 56%

Fraud training for managers / executives 55%


This illustrates why fraud prevention is often a culture-driven topic. All too often, a significant incident occurs before proper attention is given to fraud prevention. We should all be warned, and not let it come to that.

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The post-pandemic agriculture, food and beverage supply chain


The COVID-19 pandemic hit the agriculture, food, and beverage sectors hard. Our 2021 survey found that 81 per cent of business leaders consider the consequences of COVID-19 the biggest business risk. Empty supermarket shelves revealed weaknesses in their supply chains. Consider that the supply chain affects producers, distributors, food-processing plants, and consumers. In many food-processing plants, production ended up either reduced, suspended, or temporarily discontinued due to workers who tested positive for COVID-19. Less production in processing plants meant less food on grocery store shelves. 

The pandemic changed consumer behaviour and increased the demand for food. Closures of restaurants or limited-service at restaurants affected both the eating and buying habits of consumers, which resulted in a shift in demand from food service to retail. The number of trips to supermarkets greatly increased, with consumers focusing on staples with long shelf life such as pasta, canned foods, and frozen foods. Out of necessity, consumers preferred home delivery and takeaway options. Post-pandemic consumers are likely to continue buying groceries through home delivery. Consumers said grocery delivery is something they will continue to do post-pandemic, a survey found.

COVID-19 also disrupted the food supply chain, including crops rotting in the fields due to a lack of farmworkers. For example, European asparagus farmers lack enough workers to harvest the crop because border restrictions make it impossible for migrant workers from Eastern Europe to come to their farms. Even when produce gets harvested, some food processing plants scaled back or shut down to contain COVID-19. In addition, international transport of fresh foods is difficult due to border controls and freight restrictions. 

The effects of international trade disruption

In addition to COVID-19, trade disruptions pose a problem for supply chains, with 58 per cent of those participating in our survey reporting concerns about international trade flow disruption. Trade routes are necessary for a global economy and few food and beverage companies can survive without international trade. A large container ship stuck in the Suez Canal for a week serves as a good example of the importance of trade routes. The blockage of the ship stopped 400 ships from moving through the Suez Canal and cost around twelve per cent of global trade. 

COVID-19 itself disrupted international trade. Global merchandise trade recorded the biggest decline in one period in the second quarter of 2020, decreasing 14.3 per cent compared to the first quarter, according to a paper published in February 2021. The pandemic affected international trade in many ways, as the Organisation for Economic Cooperation and Development lists. When the pandemic began, ships in Chinese ports dealt with restrictions on their movement, which caused a shortage which led to a rise in the price of containers. Lockdowns impacted labour available to unload ships at ports and increased costs due to the added protective measures for workers. Supply chains, in general, remain affected by added health and safety measures for workers, and that affects both time and costs. 

The post-pandemic food and beverage industry

Post-pandemic life will return to normal but for the agriculture, food, and beverage sectors that normal will not look the same as it did before COVID-19. Our 2021 survey of business leaders found that 60 per cent of business leaders surveyed believe that global growth will decrease in 2021, and only twelve per cent are confident their organisation can grow revenue. Twenty-four per cent of agricultural leaders say they are not confident in their company’s ability to grow revenue over the next twelve months. That seems to suggest that business leaders expect a downturn for the agricultural industry, which makes sense given that the pandemic hit industries hard that rely on the agricultural industry. 

As lockdowns lift, restaurants return to in-person service and schools re-open, which increases the demand for bulk food supplies. Post-pandemic, the demand for food and beverage products will increase, and whether the increase occurs as fast as some anticipate or the build-up is slower, operational efficiency is key. Can the agriculture, food, and beverage industries keep up with the demand? As David Dollar, Senior Fellow at the Brookings Institute points out, for all sectors to keep up with the post-pandemic changes, they will need to improve operational efficiency. The good news is that in our survey, 72 per cent of agriculture leaders plan to improve operational efficiency. 

There is more room for optimism. Our survey found that a high percentage of agriculture leaders suggest improving operational efficiency is a key way they will enhance their business in 2021, while 51 per cent of them plan to launch new products and services. Three-quarters of leaders also said they feel confident about their ability to grow in the next twelve months. Time will prove if the confidence business leaders put in their ability to grow in the next twelve months measures up to the ability of supply chains to keep up with post-pandemic demand. If food and beverage companies embrace operational efficiency and realize that a new normal will exist post-pandemic, the confidence expressed in our survey will prove prophetic. 

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Foreign direct investments in Brazil and the FinTechs revolution

By Marcelo Fonseca, Global FDI Leader


Brazil has the largest economy in south America, and with a population of around 210 MM people this country represents a huge consumer market. Although inequality is a major problem, the potential market of Brazil is unarguable.

No differently from other countries, COVID-19 hit the Brazilian economy hard. Central government implemented several programs to support workers and businesses, and in response, fiscal deficit rose substantially. Fiscal measures seemed to be efficient at first, however, the second wave of the pandemic is again pressuring the weak situation of the fiscal imbalance.

Fiscal deficit and the path of its size in relation to Brazilian gross domestic product (GDP) must be addressed, as the sustainability of government debt usually impacts exchange rate and inflation. A feasible reduction of fiscal deficit must be part of central government commitment, amongst other measures, to guarantee public debt is payable.

The economy is expected to resume its growth path when vaccination rollout gains traction. Social distancing has affected several economic sectors and lockdowns are still being used to control the spread of the disease.

Although mass vaccination may pave the way to resume normal life, the agenda of sustainable growth depends on reforms – namely tax reform and administrative reform (to reduce the cost of the public sector). Tax reform is expected to raise productivity and to bring more social justice to the tax system. Parliament will be key to ensuring both proposals will be discussed during 2021.

Even with such an uncertain future, business opportunities are arising. To be more specific, the financial sector, and the potential to provide services to a large consumer market, is witnessing the rise of FinTechs (Financial technology – use of technology to improve financial services). Venture capital investments are soaring, with start-ups investing heavily in technology and innovation.

The technology revolution of the internet and the massive use of smartphones have made it possible to access the consumer market. Traditional banking may face a relevant change to its strategies, dealing with large fixed costs and branding issues. FinTechs are challenging incumbent players, with a positive impact on consumers and the economy.

The Brazilian Central Bank (BCB), in an unprecedentedly strategy, is backing all initiatives that may lead to a more competitive banking industry. The outcome expected will lower borrowing and transaction costs for companies and will boost investments in technology and innovation. This “revolution” has the potential to fill in an important gap in Brazil´s corporate culture as start-ups are focusing investments in technology, that may bring competitive advantages and the emergence of technological innovation.

This report is divided as follows:

  • Macroeconomic outlook;
  • Regulatory environment;
  • Foreign direct investments;
  • FinTechs landscape.

Brazil´s macroeconomic outlook

The COVID-19 pandemic upended the Brazilian economy as its growth is staggering since 2012. For the year 2020 negative growth was -4,1%. This result was mitigated due to the stimulus package released last year. Brazil´s package was the largest among the G-20´s emerging economies (8,3% as a share of GDP). When compared to its peers in Latin America, the Brazilian economy shrank less.

Fiscal imbalance, aggravated by the stimulus package, brought uncertainty to the market with impact on interest rates and the exchange rate. Brazilian Real (BRL) devaluation and its correlation with tradeable goods prices negatively affected inflation. Consumer price index rose 4,52% in 2020. Estimate for 2021 is higher (5%). In response, Brazilian Central Bank (BCB) raised SELIC (Brazilian federal funds rate) rate to 2,75% (previously set in 2%). Controlling inflation with a weak recovery of economic activity will impose an extra burden on an already high unemployment rate (14.2%).

Resuming economic activity will rely on vaccination rollout and addressing the problem of fiscal deficit. Without these the economy will continue suffering the social distance/lockdown effects and exchange rate and financial conditions will sustain high inflation rates. As already mentioned, BCB´s remedy is to raise SELIC, affecting consumption and investment. This vicious cycle imposes a challenge to policy makers and is not unusual in Brazil. In fact, dealing with the fiscal subject seems to be the major problem, with inflation, exchange rate devaluation and unemployment, being by-products.




Market expectations



Vaccination rollout

Immunisation becomes an important economic indicator once full economic activity depends on social interaction.  Some countries have taken this subject strategically (e.g. England, Israel, United States) with good results that should be reflected in economic recovery.

Initially, the Brazilian central government chose the Oxford-AstraZeneca vaccine to be its main immunisation drug, leaving aside negotiations with all other producers. In parallel, São Paulo State engaged with the Chinese producer “Sinovac Biotech” to produce this locally. As of today, 80% of immunisations are from Sinovac and 20% are from Oxford-AstraZeneca. Production of both is not continuous as the raw material needed (IFA – Active Pharmaceutical Ingredient) is imported and some delays are being observed. For this reason, immunisation is not following the desired path.

The corollary for this situation is a sluggish economic recovery, with social distancing measures and lockdowns still being applied in several regions of the country.



Regulatory environment

Brazilian businesses have been dealing with lots of regulation, a legislation difficult to comply with and bureaucracy.  Not only are there lots of taxes to be calculated, but also companies must prepare and deliver ancillary obligations in time. The time allocated in these activities, and the resources spent, amount to an unnecessary and unproductive number of hours. Tax reform should also deal with outdated paperwork.

Anachronic bureaucracy translated into a struggle to obtain environmental and construction permits to start a new business (also to liquidate one) reflecting a needed change of mentality and the introduction of modern processes in the public sector.

Differences in culture and productivity between private and public sector must be addressed. The administrative reform of the public sector must not only reduce public spending with servants, but should also introduce mechanisms of motivation to improve public services.

Overall regulation and the comparison with other economies is better captured by the report “Doing Business” issued by The World Bank. As stated on this report:

Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies— from Afghanistan to Zimbabwe—and over time”.

Figures below represent each item measured and its rank among 190 countries. An overall rank is given to each country in accordance to the World Bank method.

Foreign direct investments into Brazil


The Covid-19 crisis will negatively impact FDI inflows during 2021. Rearrangements of supply chains will be key to FDI prospects. Also, M&A projects have been suspended. Challenging operational and logistic conditions, and strategical reallocation of capital will tighten the inflow of capital.

Brazil, with its environmental policies being criticised, may struggle to attract capital, as society and corporations are monitoring how countries deal with the environment. Political turmoil and mismanagement of pandemics will also adversely affect inflows.

(Information below comprises completed projects)

FinTech’s landscape

The Brazilian banking industry enjoys very weak competition, since it is highly concentrated. For decades regulators (Brazilian Central Bank to be specific) saw a conflict between competition and systemic risk. Mergers and acquisitions occurred freely. Predicted outcome materialised: high bank spreads, poor quality service, fees and charges of all kinds and low investment in innovation.

On the other hand, demand for financial services, mainly online, has risen substantially during the pandemic.  Even informal workers granted with emergency aid from federal government during 2020, most of them with no bank account, had to download an “app” to manage funds.

The response to this market structure, and line of services provided by traditional banks, came along with a vibrant venture capital industry and an unprecedented entrepreneurial spirit. It was obvious that a great market was unattended and that major banks were too conservative to reach it. FinTechs have risen to fill this gap and to compete with incumbent players.

Funding, technology and innovation, together explain the emergence of start-ups with a focus on financial services. However, important help came from the regulator. The Brazilian Central Bank has been supporting this important market change, through friendly legislation and several initiatives (see box Agenda BC#). At the end of the day, a more competitive market will emerge, with lower prices, better intermediation and more efficient resource allocation.

The FinTech market is extremely segmented with a wide range of services and subcategories:

  • Backoffice (accounting, financial management, pricing);
  • FX services;
  • Cross border payments;
  • Prepaid and credit cards;
  • Credit (P2P lending, marketplace, anticipation, consortium);
  • Crypto Coins (brokerage, investments, payments);
  • Crowdfunding (equity crowdfunding, project crowdfunding);
  • Debt negotiation;
  • Customer loyalty (benefits program, loyalty program);
  • Personal finance;
  • Investments (financial assets, investment management, marketplace);
  • Means of payment (mobile, processing);
  • Risk and compliance (risk analysis, antifraud);
  • Digital services (digital banking, eWallets);
  • Technology (banking as a service, open banking).

According to a report from ABVCAP – Associação Brasileira de Private Equity e Venture Capital (Brazilian association of venture capital and private equity) and KPMG, the year of 2020 registered an impressive amount of venture capital (traditionally focused on start-ups) investments (BRL 14.6 billion). This amount was higher than the total investments in private equity (BRL 9.1 billion). The appetite for high risk shows the potential of returns from this market. Technology and regulation lowered entry barriers. Traditional banking needs to be reinvented or needs to partner with start-ups.




Agenda BC#


Ensuring to society the stability of the currency purchasing power, and a sound, efficient and competitive financial system.”

Agenda BC# comprises five topics: Inclusion, Competitiveness, Transparency, Education and Sustainability.

#Inclusion actions aim to provide access to market for small entrepreneurs, investors and borrowers, not only domestic but also for foreign clients, through the promotion of digital platforms and simplification of bureaucracy. Reduce the participation of public funds on credit operations is one of the main objectives of this program.

#Competitiveness seeks to promote a more competitive market through intensive use of technology. More competition leads to a more accessible market and lower costs. Highlights of this topic are:

– “PIX” – Brazilian instant payments: this system allows a 24/7 transactions in real-time via smartphones (transfers are processed in seconds). This new technology not only reduces transfer costs but also will meets the demand of rapid growth of mobile commerce in Brazil.

– Open Banking Systems: sharing customers data among financial institutions at customers´ discretion will help enhance competition by lowering switching costs and information capture.

#Transparency aims to improve the quality of regulator communication (e.g. monetary policy), central bank´s initiatives, and to strengthen relation with Brazilian government and interaction with public and the media.

#Education promotes financial awareness among citizens and to cultivate the habit of saving. Partnership with financial institutions and to include financial education as a mandatory content on the national curricular common base.

#Sustainability promotes sustainable finance and management of resource allocation and climate risks within the National Financial System.

Source: Brazilian Central Bank (

Marcelo Fonseca

Global Foreign Direct Investment Leader


As the hospitality industry struggles, taxes are knocking on the door


One of the long-term effects of the pandemic – besides the business effects that vary between different activities in the hospitality industry – are the tax consequences that result from the dramatic changes due to COVID-19.

The hospitality industry in general, was performing at a great level until December 2019, while the pandemic was in gestation. Hotels, restaurants, adventure activities, airlines and all related services attached to that “normal” situation were in a booming stage; then suddenly every single activity related to hospitality reduced almost to nil.

Countries in full lockdown stopped hospitality and the freedom mobility value chain. Almost every flight was cancelled and a zero-tourism season – never seen before – became a reality. The nightmare started…

Despite all this well-known reality, governments have spent their scarce resources trying to address at least three priorities:

  1. To solve the health effects of the pandemic,
  2. To mitigate huge unemployment rates, another consequence of the lockdowns, and
  3. To compromise on both current and extraordinary expenditure; whilst income derived from taxes is also plunging, stressing the conditions of deficit severely.

The OECD has stressed the fact that governments must focus on getting the economy back to work, while acknowledging that fiscal equilibrium might not be the goal for 2020 -2022. Yet all jurisdictions are seeking innovative ways to obtain fresh fiscal income that will start the road towards the fiscal recovery.

Knowing this, the hospitality industry must prioritise transfer pricing and its impact in their taxable bases, when dealing mainly with cross border transactions. These cross border business relationships with related parties will become subject to scrutiny.

Thresholds vary from jurisdiction to jurisdiction and relevant documentation as well, yet most of the countries imposed the burden of proof on the taxpayer to document that those transactions with related parties are in accordance with the arm´s length principle.

On December 18th, 2020, the OECD issued a paper titled “Guidance on the Transfer Pricing Implications of the COVID-19 Pandemic.” This document stresses the severe impact of the pandemic and the consequences of it, using several business models to illustrate the impact on the normal circumstances of transfer pricing adjustments, to be considered by both the tax administrations and taxpayers as well.

“Accordingly, this guidance focuses on how the arm’s length principle and the OECD TPG apply to issues that may arise or be exacerbated in the context of the COVID-19 pandemic, rather than on developing specialised guidance beyond what is currently addressed in the OECD TPG. This guidance focuses on four priority issues: (i) comparability analysis; (ii) losses and the allocation of COVID-19 specific costs; (iii) government assistance programs; and (iv) advance pricing agreements (“APAs”); where it is recognised that the additional practical challenges posed by COVID-19 are most significant.”[1]

[1] OECD. Guidance on the transfer pricing implications of the COVID-19 pandemic. Dec 2020. Pg. 2.


Be aware that matters that are obvious today, might not be clear some years from now; when businesses in general may get back to their regular operations. You should have highly well documented the elements of current circumstances, mainly those issues about comparability analysis of your support documentation of related parties’ transactions, awaiting the audits by tax authorities.

Undoubtfully, economic activity for hospitality businesses would not be comparable to the pre-existing conditions prior to COVID-19. It is going to take many years to recover and get back on track, if ever, to those pre-2019 levels.

The OCDE’s recommendation is to create the appropriate documentation that shows the effects of the extraordinary expenses needed to be incurred as result of the pandemic, in an isolated manner. It would also be wise to create a separate profit and loss statement that illustrates the evidence of these effects. The need to isolate this is critical for the comparability analysis, mainly for the first quarter of 2020 and any periods of permanent or temporary reopening, so that the database analysis can be adjusted when doing the extraordinary adjustments that will be triggered by the COVID-19 effect.

It is also important to have clearly segregated information in the P&L, such as the received government support programs when applicable. Do not mix such income with regular income that will distort comparable numbers.

It is highly recommended to contact your team of transfer pricing experts to solve multiple issues regarding COVID – 19. Consider that there would be a high level of uncertainty surrounding tax inspections in the future. Our best advice is to fully document everything, to prepare for huge and potentially massive audits induced by the lack of fiscal resources.

At HLB we understand the hospitality industry and have vast experience in cross border transactions that could become a new nightmare soon. We will move from the pandemic to the endemical effects in taxation and in transfer pricing matters.


Carlos Camacho

Global Transfer Pricing Leader


Embracing opportunity while overcoming supply chain challenges

HLB's Survey of Business Leaders - Manufacturing analysis


Key survey findings at a glance:

  • Manufacturing business leaders are more optimistic about the economy than their global peers.
  • Improving efficiency and reducing costs are ‘top of the agenda’ for nearly all business leaders, however launching new products or services was the third most important action for manufacturing business leaders
  • 28% of manufacturing business leaders plan to reassess their supply chain to source closer to home, opposed to 16% of their global peers

When COVID-19 shut down factories, companies across the globe felt the impact. Raw material delays combined with shipping bottlenecks affected nearly every manufacturing segment. Although some manufacturers saw a decline from reduced consumption, others thrived with newfound demand for products. 

Since many facilities require workers on the floor, businesses had to find a way to improve airflow and infiltration. Doing so resulted in higher utility usage and investments in air filter and duct improvements. Higher costs, reduced output, delayed supplies, and a decline in consumer demand posed problems. 

With rising shipping costs and uncertainty about new virus variants, manufacturing executives must improve operations and explore growth opportunities. To gauge executives’ confidence levels across the globe, we conducted our HLB Survey of Business Leaders. From there, we looked at datasets from specific sectors to determine how manufacturing leaders plan to grow revenue and build resiliency into their operations. 

Overall, manufacturing leaders express more confidence about the upcoming months than their global peers. However, uncertainty still exists. Learn about the challenges affecting the industry and what steps leaders are taking to persevere. 

Pent-up demand increases manufacturing optimism

Curtailments during the pandemic drove up demand for manufacturing in certain sectors, such as pharmaceutical and medical equipment. Other segments adapted factory lines to produce goods for the direct-to-consumer (D2C) market. But some, such as food and beverage manufacturers, saw reduced demand for out-of-home products.

 After over a year of restrictions, people are anxious to spend money on goods and services. Moreover, professionals feel optimistic about the continued vaccine rollout and the systems used to ensure business continuity. Consequently, leaders anticipate a surge in consumer and wholesale spending. 

On a global scale, manufacturing leaders are slightly more optimistic about the rate of economic growth. 25% expect an increase, whereas just over 50% believe it’ll decline. Like their global peers, executives overwhelmingly believe economic uncertainty and the impacts of COVID-19 are the top two threats to growth. Nevertheless, the manufacturing industry faces other challenges. 

Lingering questions about barriers to growth

Rising costs and supply chain issues continue to plague manufacturers, as 62% of leaders worry about international trade flow disruption and 58% express concerns over geopolitical uncertainty. Although Brexit initially caused concerns, organisations are adjusting to new regulations and paperwork. Yet, nearly all manufacturers face ongoing supply chain and shipping issues. 

The Suez canal was just one high-profile incident during many months of delays. Bottlenecks at ports reflect an ongoing container shortage, with average container wait times for Asia to North Europe trade increasing by an estimated 35 days. The unprecedented problems even led Ikea to address delays with customers on Facebook, saying: “The surge in demand worldwide for logistical services at this time has resulted in a global shortage of shipping containers, congested seaports, capacity restraints on vessels, and even lockdown in certain markets.” 

The combination of challenges has skyrocketed spot freight rates. Mark Yeager, chief executive officer of Redwood Logistics, told American news station CNBC that “freight rates from China to the U.S. and Europe have surged 300%” compared to March 2020. Additionally, major shippers like Hapag-Lloyd increased congestion surcharges from North America to United Kingdom ports. Container production is expected to increase, but high consumer demand for products creates a cycle of shortages that may impede fast shipments of raw materials and goods manufacturers require for seamless operations. 

Furthermore, 50% worry about regulatory change, and 48% are concerned about exchange rate volatility. Each of these issues can hinder the flow of goods from manufacturers to retailers while increasing costs. To ensure rising prices and other concerns don’t become a barrier to growth, manufacturing leaders aim to enhance operations in various ways. 

Manufacturers’ top growth priorities  

Increasing operational efficiency and reducing costs are at the top of the list for the majority of industries. Compared to their global peers, manufacturing leaders are 15% more likely to focus on operational efficiency. Although organisational improvements are always a goal, the pandemic and ongoing logistics issues emphasised its importance. 

As leaders concentrate on reducing supply chain disruptions, it’s essential to ensure smooth delivery of materials and goods. Operational objectives vary by segment and consist of digital systems, automation, workforce upskilling, and many others. 

The third most crucial action is launching new products, with 43% of executives prioritising it. Consumer behaviour changes drive innovation as manufacturers search for ways to embrace opportunities. Moreover, 41% are focusing on organic growth versus 37% of their global peers. Using existing resources to enhance sales and increase output fits the overall goals for efficiency and cost reductions. 

In addition, 29% aim to invest in human capital, and 24% will prioritise the adoption of emerging technologies. Upskilling workers to meet upcoming technology needs will help manufacturers navigate forthcoming changes. To meet growth objectives, leaders also plan to address business vulnerabilities. 

Goals to strengthen manufacturing weaknesses

Similar to global leaders, manufacturers consider operational effectiveness a core weakness needing improvement in 2021. However, executives in manufacturing cite supply chain issues as a more significant vulnerability than their global peers. With 27% noting it as a weakness compared to 16% globally. 

Before the pandemic, international trade tensions highlighted procurement and distribution problems. But, lockdowns affecting factories in China and Asia also impacted numerous manufacturing segments. Port bottlenecks, shipping container shortages, and labour deficits compounded these issues. Consequently, executives are exploring alternative suppliers and considering sourcing raw materials regionally. 

27% of leaders also emphasise the importance of improving digital capabilities this year. Using technology to reduce errors and optimise processes can support supply chain, cost reduction, and operational goals. 

The manufacturing sector also considers brand strength a weakness, with 25% focusing on it compared to 20% of global leaders. This may be due, in part, to executives looking for opportunities in the D2C sector. As companies moved to online purchases, manufacturers lacking online presences faced stiff competition. To retain and grow market share, leaders must boost brand visibility. 

The expansion of digital capabilities

Digital capabilities vary widely across the manufacturing industry. Therefore high-tech sectors may prioritise technological expansion, whereas more traditional facilities may spend fewer resources in this area. Although nearly 50% of global leaders consider cloud computing important to future business success, only 35% of manufacturing executives say the same. 

Cloud computing, robotics process automation (RPA), and the internet of things (IoT) rank in the top three technology advancements considered most important for business leaders. Both RPA and IoT support operational efficiency while bolstering weak areas, such as operational effectiveness. Likewise, the technologies can help leaders address existing supply chain issues, with 88% agreeing that technological advancements will help overcome cross-border business challenges.

Steps to attract a skilled labour force 

Appealing to a diverse and skilled labour force continues to be a priority for manufacturers, with 81% of leaders saying a more diverse and inclusive workforce will ultimately improve financial performance. Also, 83% acknowledge that building diversity in the board and workforce is increasingly important, and 98% agree on the significance of ensuring equal support and opportunities, particularly in the current environment. 

Interestingly, 65% believe remote working will make it easier to source diverse talent in the future. Although many warehouse and factory positions require on-site workers, technological advancements can enable virtual oversight of critical processes related to safety and compliance. For example, cloud-based gas detection and air quality systems allow management to oversee and act on real-time safety data from any location. 

Factories that adopt state-of-art processes, equipment, and products may have an easier time attracting tech-savvy and diverse individuals. Moreover, growth objectives geared towards investing in human capital can focus on upskilling workers to navigate the shift towards RPA and artificial intelligence. 

Preparation for climate disruption

During the pandemic, many companies put green initiatives on the back burner. However, 72% of business leaders in manufacturing are making changes to their business to profit in the low-carbon economy. Specific segments, such as iron, cement, and steel production and chemical and paper operations, face extra challenges from potential regulations. Countries will continue to monitor direct greenhouse gas emissions and expect corporations to take action or face steep fines. 

Since many regions focus on a greener economy by 2030, manufacturing leaders must act now to ensure compliance and growth. Fortunately, potential tax credits or government initiatives may help manufacturers start small with green goals. By testing various tactics on a smaller level, companies can assess which activities are sustainable and explore ways to create greener businesses at scale. 

Climate concerns also expose potential opportunities for certain manufacturing segments, both with branding and products. Companies can leverage green capabilities to reach a larger market segment while producing goods geared toward climate-aware individuals. Furthermore, sourcing raw materials closer to home and increasing operational efficiencies can support sustainability objectives while helping manufacturers prepare for future climate disruption. 

Re-discovering the human connection

Like global leaders, 94% of manufacturing professionals agree that staff physical and mental wellbeing is a top priority for human resources. Additionally, 83% agree that social distancing and remote working make it challenging to deploy the value of the human touch in their businesses. Social distancing rules on factory floors and remote office workers affect company culture, making it difficult to sustain connections vital to employee morale. 

Indeed, 49% of executives miss collaborative working, 38% report it’s harder to establish trust remotely, and 34% say it hinders creativity. Vaccine rollouts, improved air filtering systems, and an expansion of safety protocols can make workers feel more secure in warehouses and factory lines while enhancing corporate culture. 

Confident in ability to adapt post-pandemic

Our HLB Survey of Business Leaders finds that 93% of manufacturing executives are confident in their ability to successfully steer the business in a new direction in response to the impact of COVID-19. Moreover, they feel more optimistic than their global peers regarding their company’s growth prospects, with 83% of manufacturing leaders expressing confidence versus 75% of global executives. Notably, 35% are very confident in contrast to 25% globally. 

Challenges create manufacturing opportunities

Any challenge opens the door for opportunity, especially for businesses nimble enough to adapt quickly. Although concerns remain about price increases, raw material shortages, and shipping delays, agile manufacturers can assess ways to mitigate issues going forward. As the demand for products and services increases during 2021, leaders who devise strategies that protect their bottom line and grow their market share can stand out from the competition.


Findings in this article are based on 88 survey responses from manufacturing business leaders collected in quarter 4 of 2020, as part of HLB’s Survey of Business Leaders 2021. The majority of businesses surveyed are privately or family owned. For the full research report see HLB’s Survey of Business Leaders 2021: Achieving the Post-Pandemic Vision: leaner, greener and keener. 

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Fostering lifetime customers after COVID-19 with 2021 hotel trends


As more people receive a COVID-19 vaccine, travel may resume as early as the summer of 2021. But are Hoteliers ready for an influx of travellers with new needs and standards? 

After a year of lockdowns and substantially reduced travel, hotel guests may have different expectations as they slowly start booking trips. While many are itching to enjoy exotic vacations and restore international business relationships in person, hotels can still anticipate easing into welcoming more guests rather than expecting a surge of traffic.  

As guest expectations evolve after COVID-19, there are a few popular hospitality trends to keep your eye on this summer. Here are the top hotel trends to watch in 2021.  

Communicating early and often 

Many guests are more reluctant to book trips, worrying that a sudden COVID outbreak will cause cancelled flights and reservations. These guests want to ensure that if they invest in travelling, the amenities they expect will be available to them when they arrive. 

That’s why many hotels are prioritising more active communication plans in 2021. Virtual communication like emails and app notifications will take centre stage this year to quell uncertainty.  

Increasing direct, personalised communication after booking, during their stay, and after they leave can help guests feel more secure in their choice to stay with your hotel. These communications are a great time to update guests on cleaning protocols, open or closed attractions in the hotel or surrounding area, and check-in options. Even if cancellations are necessary or travel restrictions have changed, prompt notification can provide guests with a good customer service experience even when they can’t stay with you.  

Follow up communication after a stay can encourage guests to leave reviews and offer feedback while fostering a stronger connection to your brand. Remarketing to these customers and providing high loyalty benefits will likely remain popular hotel marketing trends as travel volume rebounds.  

Focusing on health and safety 

In 2021, the best hotels will keep health and safety protocols at the forefront. That may mean contactless check-in procedures, flexible cancellation policies, and increased housekeeping needs.  

Technology can play a major role in empowering a safe stay for guests. Keyless entry, contactless payment, and voice assistants in rooms diminish contact between guests and hotel staff for a safer visit. These features prioritise guest convenience, too.  

Voice assistants can be a significant contributor to food and beverage success in 2021. Simplifying ordering from local restaurants and enhancing room service ordering capabilities can improve customer experience. Voice requests can also suggest and order products from a hotel’s grab and go market, reducing the need for restocking in-room concessions or managing a storefront in the lobby. 

While some visitors may still need to quarantine when they arrive at a new destination, technology can make quarantine periods much more convenient and comfortable.  

Expecting smaller travel parties 

After a year of limited contact, many people have become more accustomed to spending time on their own. That may mean solo travellers and couple vacations become more popular than group travel, family vacations, and hosting conferences.  

Adjusting room availability and pricing for small parties can attract those ready to travel. While solo travellers may only need a room with a king bed, they may also be more likely to upgrade to a room with a view or book an extended stay. Providing “business class” amenities to solo leisure travellers can set your hotel apart in 2021. 

These travellers are less likely to have a pre-planned agenda, too. Promoting and booking local experiences for travellers can help cater to these guests’ desires, differentiate your brand, and provide additional income streams for your hotel. Adding these upsells helps hotels compete with Airbnb and other hotel alternatives. 

Spending less on third-party sales channels 

Direct advertising and retargeting past guests are becoming easy ways to save money as revenue lags. Pricy commissions to hotel aggregators and booking companies may not help your hotel get as many bookings as it used to this year. 

Rather than investing in commission fees, reprioritising your marketing budget to improving your website’s booking experience or your mobile app experience can help you save money while still attracting interested customers. The Hotelier PULSE 2020 Market Trends report shows that over 70% more bookings came through direct channels year over year, so improving direct booking channels is a safe, cost-effective bet for many hotels in 2021. 

Refocusing marketing spend on organic social media engagements and paid online advertising can help engage guests eager to return to travelling, too. 

Stay ahead of the evolving hospitality industry 

There’s no doubt about it: the hospitality industry will continue to see massive shifts throughout 2021 and the years ahead. While it may seem like a year to go back to the basics, there are still some crucial hotel trends you can implement to set your guest’s stay apart this summer.  

As guests begin travelling again, providing an exceptional experience can mean gaining a lifetime customer. Following these trends is a great way to drive revenue in 2021 and foster a loyal fanbase for years to come. 

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Addressing digital weaknesses to fuel growth opportunities

HLB's Survey of Business Leaders - Financial Services analysis


Key survey findings at a glance:

  • Confidence in global growth is lower for business leaders in financial services. Only 20% of leaders believe the rate of global economic growth is likely to increase over the next 12 months
  • Undertaking joint ventures a priority for financial service business leaders
  • Digital capabilities considered a weakness, but adopting emerging technologies considered an action for growth over the next 12 months

As lockdowns began across the world, many in the financial industry were able to complete services online. However, shutdowns of in-person banking posed difficulties for small or rural institutions. Generational differences in consumer technology use combined with less robust infrastructure left some firms scrambling to adopt contactless technologies. 

Continued restrictions led to revenue losses as business owners and consumers weren’t able to pay loans. The loss of trade and bond values and low interest rates affected profitability. Moreover, business owners began drawing on open credit lines, leaving financial institutions with less liquidity.

With interest rates expected to remain low, financial executives face a myriad of challenges in 2021. We assessed the confidence levels of executives with HLB’s Survey of Business Leaders. Then we pulled datasets for individual sectors, such as the financial services industry, where we looked at top growth priorities, potential vulnerabilities, and future outlooks.

Financial executives are less optimistic about international growth prospects than their global peers, and only 12% say they’re very confident in their own growth prospects. Yet, an emphasis on growth tactics while reducing risks can help institutions navigate the current environment. Below we break down sentiments among global financial services leaders. 


The economy: Uncertainty lowers confidence

Financial services are unique because business activity reflects what’s happening across all industries. Institutions with less client diversity ran into more challenges during the pandemic than firms with assets balanced across multiple sectors. 

Additionally, traditional financial services face stiff competition from fintech backed by a growing customer base of digital-first consumers. Today’s clients are comfortable using online financial services to crowdsource funds or access loans without partaking in the longer in-person banking process. Add in concerns about regulatory changes, potential rising tax rates, and rock bottom interest rates, and those in the financial sector have plenty to be concerned about. 

Globally, 23% of business leaders believe global economic growth will increase. But, only 20% of financial executives feel the same way. In comparison, 26% of technology professionals and 25% of manufacturing leaders expect global economic growth to increase. 

Like other business leaders, 87% of financial executives worry about economic uncertainty, and 78% express concerns over the impacts of COVID-19. The majority of financial leaders also acknowledge potential threats to growth, such as: 

  • 66% cite cybersecurity issues 
  • 65% mention tax risks
  • 63% refer to regulatory change
  • 62% specify social instability

The combination of security, regulations, taxes, COVID-19, and social instability can lead to less faith in growth prospects for individual institutions. Although 65% reported confidence in their own growth prospects over the next twelve months, this lags behind the global average of 75%. 

Growth priorities for financial services leaders

Financial leaders face the same concerns as global peers when it comes to prioritising growth tactics. Nearly all business sectors list improving operational efficiencies and reducing costs as key ways to grow this year. Compared to global leaders, 11% more financial services executives believe the adoption of emerging tech is critical to growth. Furthermore, financial professionals prioritise joint ventures and strategic alliances higher than their global peers, with 12% more making this a top priority.  

Even before the pandemic, leaders focused on mergers and partnerships to improve digital capabilities and expand technologies. But a shift to remote work and client behavioural changes meant institutions had to speed up digital transformations. Fintech firms, wealth management agencies, and the global payment sector rely on technology to provide secure client and employee tools. 

To achieve growth, leaders understand they must reduce costs and develop new efficiencies while connecting with partners who can contribute technologies or new customer bases to balance the costs of implementing emerging technologies. 

Analysing barriers to growth 

Since 55% of financial leaders say digital capabilities are a weakness and believe it’s essential to growth, most executives will concentrate on expanding their digital platforms. The use of technology will also help leaders address other noted vulnerabilities, such as cybersecurity and talent acquisitions. To achieve results, 24% of respondents want to see more innovation, and 29% will focus on operational effectiveness. Strengthening these weaknesses can help the 60% of leaders with their goal of operational efficiency. 

Also, digital capabilities differ by segment. The global payments industry takes the lead with contactless payment technologies supported by hefty fees for card-not-present (CNP) transactions. Wealth management companies look to increase access to big data analytics to generate client insights, track business performance, and deliver real-time investment advice. However, smaller institutions may prioritise consumer-facing technologies in rural areas where 5G roll-outs may influence banking decisions. 

Although many banks are already digital, handling the influx of big data and using it for business decisions is still a challenge. Smaller institutions will continue to look for ways to generate insights from existing data to select the right mix of products and services to increase client acquisitions and retention rates. 

It’s also important to look at the impact of potential regulations and tax increases. For example, the global payments industry saw rapid adoption of Europay, MasterCard, and Visa (EMV) technology during 2020. But many retailers are pushing back against exorbitant CNP fees. While the customer is paying in person, payment processors may charge the higher CNP fee. Increased pressure could result in regulatory changes, or business owners may seek out options with lower costs. 

Future success relies on digital capability improvements 

Like the majority of business leaders, cloud computing is a top priority for digital transformations. However, financial executives are less interested in the internet of things (IoT), virtual reality (VR), and augmented reality (AR) than global peers. Instead, financial services executives identified the following technological advancements as important to future business success: 

  • 37% artificial intelligence (AI)
  • 25% machine learning (ML)
  • 24% 5G technology
  • 23% blockchain

Blockchain, AI, and ML

AI and ML both serve prominent roles in the financial industry, so increasing these capabilities are vital. There’s a growing demand for simple online processes with growth in platforms that tout speed and contactless methods for securing funds, approving applications, and transferring money into accounts. AI and ML can automate much of the back-office processes reducing human errors and operational costs. 

In our global survey, only 10% of respondents consider blockchain essential to future business success, but a digital ledger of transactions presents many opportunities for financial leaders. While some worry about potential revenue losses, others aim to leverage the technology to improve existing systems and reach new markets. With support from prominent financial institutions, such as JP Morgan, Citigroup, PNC, and Wells Fargo, more organisations evaluate ways blockchain can enhance their digital assets. 

Moving forward, many of these technologies will become less of a perk and more of a necessity. As 5G rolls out, financial institutions can use AI, ML, and blockchain to: 

  • Enable cross-border payments in real-time 
  • Reduce transaction costs and the paperwork required to transfer funds internationally 
  • Comply with anti-money laundering and know your customer (KYC) regulations
  • Attract digital-first generations wanting convenience, transparency, and security

Accessing talent and increasing diversity 

With financial leaders listing talent acquisition as a weakness, finding new ways to attract and retain employees is essential. For many in the sector, a shift to remote work has helped break down barriers to talent acquisitions and opened the door to a vast pool of job candidates. Flexible work options allow leaders to source talent with the skills needed for planned technology advancements. In fact, 73% of financial leaders expect remote work to make it easier to source diverse talent compared to 65% of their global peers. 

Indeed, diverse talent is a must for financial services leaders, with 87% saying building diversity in the board and workforce is increasingly important and 84% saying that a more diverse and inclusive workforce will ultimately improve financial performance. Furthermore, 96% agree on the importance of ensuring equal support and opportunities, particularly in the current environment.

Greening of the financial services sector

88% of business leaders in financial services are making changes to their company to profit in the low-carbon economy versus 77% of global peers, making it clear that those in the industry are already feeling the impact of climate change. Since the Network for Greening the Financial System (NGFS) formation in 2017, more executives are tuned into how climate changes affect their organisations. 

According to the Morgan Stanley Institute for Sustainable Investing, “Between 2016 and 2018, climate change-related weather events caused more than $630 billion in economic damage worldwide.” Some of the effects already felt include defaults on loans in areas with extreme weather events, debtors impacted by environmental fines, or manufacturers in the plastic or water-heavy segments losing business from new regulations and water shortages. 

Going forward, leaders aim to take measures to protect asset values and create value through innovation, which may be why 24% of financial leaders want to focus on improving weaknesses with innovation. Moreover, 70% of financial services leaders are reassessing their supply chain to source closer to home. Each of these steps may help executives increase operational efficiency and prepare their institution for climate change disruptions. 

A new way of work

Staying connected and ensuring business continuity during disruption is vital. Industry leaders believe they can leverage remote work to attract top talent, but many don’t feel an entirely remote workforce is the best solution. Furthermore, 86% agree that social distancing and remote working make it challenging to deploy the value of human touch in their businesses.

The top issues with remote work include, 55% of respondents say remote work makes collaborative working harder, 42% believe it affects creativity, and 42% think it dampens empathy. However, similar to other global leaders, 89% of financial services executives say physical and mental wellbeing is a top priority for human resource departments. With this in mind, the hybrid model is a way to support wellbeing while offering the flexibility craved by top talent.  

Looking ahead with optimism 

Although financial leaders keep a close eye on global and internal growth capabilities, they don’t doubt their expertise to navigate challenges. 94%of business leaders based in this sector are confident in their ability to successfully steer the business in a new direction in response to the impact of COVID-19.

With the possibility of future tax hikes, new regulations, and an increased focus on climate risks, financial service experts have their hands full. Intense focus on growth opportunities while increasing digital capabilities will allow institutions to cater to digital-first generations, mitigate risks, and remove barriers.


Findings in this article are based on 93 survey responses from Financial Services business leaders collected in quarter 4 of 2020, as part of HLB’s Survey of Business Leaders 2021. The majority of businesses surveyed are privately or family owned. For the full research report see HLB’s Survey of Business Leaders 2021: Achieving the Post-Pandemic Vision: leaner, greener and keener. 

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Sustainability trending with business growth


Sustainability has built up momentum over the past several decades. What some people thought would be a buzzword came to be a new perspective and way of thinking. It now incorporates all industries and businesses. Building sustainability into the brand doesn’t only help the environment, but it also helps businesses that want to cultivate company longevity.

Environmental, social and governance (ESG) metrics and their impact

Typically, government bodies and interested investors look at a company’s ESG or Environmental, Social, and Governance metrics. These metrics help to demonstrate how far along a company has advanced with its sustainability measures. Each letter stands for a different metric as sustainability is no longer only focused on environmental concerns but also on how it impacts social and governance matters. Modern sustainability means promoting the health of the environment, the health of the local community, and bringing economic profit back into the sector.

Research done by McKinsey and Company promotes companies having a higher ESG rating as it has shown to mean a lower cost of equity and debt. These initiatives foster the health and wellness of the company’s community while still improving a business’s financial performance, meaning a win-win situation for everyone.

Improve brand image = improve the environment

It goes without saying that a company’s brand image pulls out your audience, allowing you to have more of a targeted reach to the people that will lead to conversion and profit. Using and promoting your sustainability initiatives to your customer base improves your brand image while simultaneously improving the environment and the communities the company works in. 

Attracts customers and new Talent

According to a survey done by IBM, almost six out of ten consumers are willing to alter their shopping habits to reduce the environmental impact of their purchases and almost eight out of ten indicated that sustainability is essential. Consumers might drive the change, but it is ultimately up to the company to make it, thereby attracting more of those willing to convert to more sustainably focused brands.

Improved financial performance

Ultimately, without increased financial performance, most companies wouldn’t be interested in promoting sustainable initiatives. As the interest and research around them have increased, promoting and sustaining these initiatives has become more affordable. Since these sustainable production methods or support have become more affordable, the benefits often outweigh the financial siphons.

Increased investment interest

Sustainable strategies are necessary to cultivate a competitive edge, as seen by 62% of company executives. That competition isn’t just for a consumer base but for investment interest. Sustainability isn’t going away, and many investors consider it the route of the future. Jumping on it now and implementing those ESG initiatives is an excellent way to attract more investment interest.

Building a successful company often involves keeping one eye on the present functions and another on future possibilities. Modern sustainable enterprises have been proven to lead to business growth in more ways than one. What is stopping you from going green?

Manosij Ganguli

Global Sustainability Advisory Leader


The effect of climate change on international agriculture


Climate change occurs as a direct result of global warming.  Here’s a quick refresher on the subject: as atmospheric CO2 levels increase, less radiation from the sun leaves the atmosphere. We feel this increase in radiation as heat. Differences in hot and cold air cause wind, which carries precipitation in the form of clouds. 

Historically, wind flowed in a distinct and consistent trajectory that allowed farmers and ranchers to more or less predict weather patterns season after season, and they could plan their cropping accordingly. For example, in certain regions, farmers knew when the first frost would usually occur, and were careful to harvest all of their crops before then for maximum yields.

But, with hotter air in the atmosphere, the wind moves in a way we’re not used to. Areas that used to get regular rainfall are now dry, and dry areas are now flooding. Frost dates are no longer predictable either. Agricultural businesses must think ahead and adapt to the threats of climate change instead of reacting to disasters after they occur.

Common ways climate change affects agriculture businesses

Climate change impacts food production by:

  • decreasing the average rainfall in an area, which leads to drought or water shortages;
  • increasing rainfall in an area, which leads to water-logged soil;
  • making the growing season hotter, which stunts the growth of numerous non-tropical crops and leads to fatal heat stress in livestock; and
  • causing crop failure due to increasingly common extreme weather events, such as wildfires, floods, and unseasonably cold weather.

Climate change also affects the presence of weeds, pests, and pathogens, as well as the ability of farmers and ranchers to tend to their crops or livestock. For example, land cannot be tilled if it’s underwater or water-logged. Many pesticide and herbicide products cannot be applied during extreme temperatures or strong winds. Animals are susceptible to heat stress and may perish before harvest. Mowing and curing hay has to occur during a stretch of sunny weather, or nutrients will leach from the hay and result in a difficult-to-digest forage. 

Examples of how climate change has affected international agriculture

As extreme weather events have become almost commonplace, the following examples of how climate change affects agriculture are no longer conjecture. Instead, they represent the reality facing agriculture businesses around the world:

  1. In the southwest region of the U.S., recurrent droughts have strained the local water supply and caused irrigation water to be rationed. With less water to support plant growth and development, the number of acres devoted to crops has decreased in this region. 
  2. A 2015 study evaluating data from Italian cattle farms found that cows older than 24 months were significantly more likely to die of heat stress than younger cows when exposed to temperatures of at least 90 degrees Fahrenheit for three consecutive days. Heat stress tolerance varies from species to species and breed to breed, with goats, sheep, and cattle breeds originating from the tropics proving to be more heat-tolerant in general. 
  3. Vineyards around the world have noticed a difference in wine quality, which researchers have traced back to rising temperatures that affect the grapes’ chemistry. Vineyards have also been impacted by rising sea levels reducing available land, as well as an increase in pests and insect-borne diseases due to warmer weather. 
  4. A rare winter storm hit Texas in February 2021. South Texans in particular had no infrastructure in place for freezing temperatures, as this area normally gets less than a third of an inch of snow per year. As a result, ranchers didn’t have items like heated water troughs or cold flow improver to keep their diesel tractors running. The storm also caused a disruption of power, which made it difficult to heat hatcheries and barns, resulting in animal death. 
  5. Extreme flooding in southern China in 2020 wiped out millions of acres of farmland reportedly the size of West Virginia. The disaster caused about $21 billion in damages. Because China is the world’s leading food producer, floods like this have the potential to cause serious food instability around the world.
  6. Australia experienced devastating bushfires between 2019 and 2020, which burned more than 2.45 million hectares of agricultural land. Climate change has been implicated in a 30% increased risk of bushfires: extreme heat and severe drought created the perfect conditions for fires to start and spread rapidly. 
  7. Unseasonably late snow in the UK in Spring 2018 caused the deaths of thousands of sheep. Dairy farmers were also forced to throw away vast quantities of Milk as a breakdown of logistics made it impossible to transport the product.

How agriculture businesses can adapt to climate change

Because climate change is an ongoing threat and not projected to reverse or slow down any time in the near future, agriculture businesses must mitigate the risks of climate change with contingency plans. Possible solutions include:

  • Choosing crop varieties that display a greater tolerance toward heat, drought, and/or intermittent flooding
  • Investing in irrigation infrastructure, even if droughts are not currently an issue
  • Adding organic matter to soil to increase water retention and reduce erosion
  • Transitioning from traditional agriculture to indoor hydroponic facilities
  • Generating power on-site with renewable resources to ensure all buildings remain climate-controlled despite mainline power outages
  • Diversiying plants grown and livestock raised just in case one variety is extra sensitive to extreme temperatures
  • Adopting farming methods and cultures from other regions of the world, for example the expansion of viniculture in the UK
  • Supporting investment in new Agritech and plant science
  • Investing in smaller farms and ranches spread across diverse regions and avoid large properties that could be wiped out with a single weather event
  • Transitioning to an agroforest model to use less land more efficiently
  • Developing emergency infrastructure for animals in the event of extreme weather, such as floating chicken coops or a “high and dry” mound for livestock to stand during a flood

The number-one thing agricultural businesses can do to adapt to climate change is to prepare for all foreseeable scenarios. As the saying goes, “Prepare for the worst, hope for the best.”  Extreme weather events can develop very quickly. Learn how to respond to a climate emergency and how to prepare in advance to protect your investments, if possible.

Manosij Ganguli

Global Sustainability Advisory Leader


Real estate leaders eye improvements amid uncertainty

HLB's Survey of Business Leaders - Real estate analysis


Key survey findings at a glance:

  • Real estate business leaders are more optimistic about the economy than their global peers.
  • Leveraging digital technology and improving digital capabilities is one way real estate leaders are responding to the changes brought on by the pandemic
  • 45% of real estate business leaders plan to reassess their supply chain to source closer to home, which is 14% less than their peers

The global financial crisis of 2008 and 2009 left a deep impression on real estate professionals, making them wary about a post-pandemic future. However, many are embracing initiatives to build resilience while optimising operations. 

Since the real estate industry depends on diverse sectors, from retail to industrial, outlooks and business-related strategies vary. Nevertheless, leaders are centring improvement goals on cost management and operational efficiency while strengthening digital capabilities. 

To determine how real estate experts are adjusting and adapting, we reviewed data from our global HLB Survey of Business Leaders. Our study asked executives about their twelve-month outlook, main priorities, and perceived weaknesses. Furthermore, we examined objectives in critical areas, such as talent acquisition and approaches to environmental issues. 

Although the vaccine rollout improves prospects for the second half of 2021, our research suggests a lengthy recovery period. Industry leaders will focus on streamlining and restructuring processes to remain competitive and thrive in the years ahead.

Real estate expectations: Economic outlook

Looking forward to the next twelve months, 22% of real estate leaders believe the rate of global economic growth is likely to increase, and less than half expect a decline. These results suggest that real estate professionals are slightly more optimistic about the economy than their global peers. Still, everyone agrees that the top two risks to growth are economic uncertainty and the impacts of COVID-19. 

According to CBREproperty values for global commercial real estate (CRE) won’t find their bottom until later in the year. In addition, we could see a decline in rental growth, with vacancies continuing well into next year. 

At this point, leasing companies may keep the same asking price for units, but they’re prepared to give a bit in terms of concessions. Few in the real estate industry were immune from the pandemic’s impact, and most face uncertainty in the market.

When will values stabilise?

As things progress, city centres are better positioned to navigate change. Various real estate sectors, such as data centres, industrial properties, and single-family homes, may increase in value while retail and hospitality buildings may decrease. 

Part of the property valuation problem stems from an exodus of people from crowded urban areas, with a noticeable shift in London, New York, and Tokyo. However, it’s unclear how workplace social distancing policies and increased virtual work will affect office building values. 

Companies may downsize square footage to account for remote staff. Others will seek buildings with fewer offices but larger, well-equipped collaboration spaces. Going forward, brands may reassess property value propositions to focus on amenities. 

The bottom line is that leasing space and selling buildings aren’t close to price discovery yet, and the downward trend for certain real estate divisions may last through the year. To this end, real estate executives express less confidence in their own growth prospects, with 65% reporting feeling confident or very confident, compared to 75% of global respondents. In addition, only 12% feel very confident. 

Although economic uncertainty and COVID-19 are agreed-upon barriers to growth, real estate leaders are less concerned than their global peers about disruptive technologies, environmental or climate issues, or exchange rate volatility.

Actionable steps for real estate growth 

In 2021, leaders will focus on several growth activities, with responses for the top two priorities comparable to their global peers. 57% report improving operational efficiencies as a top goal, and 51% want to reduce costs. Building organic growth and developing strategic alliances or joint ventures also ranked high. 

Increasingly, real estate professionals consider strategic partnerships as a key to growth. In CRE, a design firm can help reimagine commercial real estate properties or identify high-value amenities driven by changing behaviours and workflows. 

Moreover, real estate leaders look for opportunities to connect with proptech companies to enhance tenant relationships. For example, mobile applications can improve the digital tenant experience by providing real-time building updates and an online space for community interactions. 

Core areas for improvement 

Efficiency, digital capabilities, and talent acquisition are the prime areas real estate leaders noted as business gaps. They plan to focus on these aspects over the next twelve months. But, 24% of leaders also pointed out identifying new partnerships as an area for priority over the next 12 months. 

Cost management via operational efficiencies is a crucial driver for leaders across industries. Yet, digital capabilities are essential to increasing efficiencies. Traditionally, the real estate industry has been slower to adopt new technologies, explaining why they consider it a weakness. Moving forward, going digital will be critical to achieving other goals, such as talent acquisition, operational efficiency, and resilience. 

Digital capabilities for financial and operational resilience

When looking at digital capabilities, the top five priorities are cloud computing, the internet of things (IoT), artificial intelligence (AI), robotics process automation (RPA), and 3D printing. Real estate executives aren’t short on innovation, but they need to upgrade technologies and skillsets to meet today’s demands.

IoT sensor data is increasingly important in the real estate industry. Successful implementation can help build trust and increase engagement with tenants. Furthermore, it can drive decision-making. By analysing tenant behaviour and preferences, owners can see how renters use amenities, enabling property managers to provide personalised experiences. Tenant data also is used to forecast potential lease renewals and develop custom retention strategies. 

By leveraging IoT and AI to collect data, real estate leaders can manage or survey properties in real-time while adjusting activities to account for fluctuations in the demand or supply of spaces. Data suggests that tech investments in property operations and management can help real estate professionals get a clearer view of operations and productivity. To boost resilience, companies plan to:

  • Analyse business workflows and processes
  • Identify ways to decrease redundancies and restructure
  • Update asset management systems
  • Automate or outsource non-core activities
  • Use the cloud, RPA, and AI to  modernise the leasing process

Real estate also has a keen interest in exploring 3D printing, partly due to the convenience and speed of modular construction enabled by 3D printing. Additionally, 80% agree that technological advancements will help overcome cross-border business challenges. Although real estate professionals outsource work overseas, technology has not solved everything, with many leaders experiencing that some systems and processes are not being able to be automated.   

Bolster talent and diversity initiatives

With talent acquisition ranked as a vulnerability, real estate leaders aim to improve it. However, advances in this area rely on increasing digital capabilities. Leaders must find ways to appeal to and retain a multigenerational workforce. To do this, companies will assess processes, redesign job roles, and improve recruiting strategies while focusing on diversity and inclusion. 

For D&I priorities, 86% of real estate leaders agree that building diversity in boards and the workforce is increasingly important. 93% say it’s essential to ensure equal support and opportunities. D&I initiatives can result in a stronger brand from improvements to profitability, creativity, employee morale, and productivity. In the future, hiring managers can expect to hear questions from job candidates about D&I initiatives and the company’s community involvement. 

For those who boost talent outreach to underserved and minority communities, the rewards can be significant. 78% of real estate leaders believe a more diverse and inclusive workforce will ultimately improve financial performance.

Although many industries have similar objectives for talent acquisition and D&I, fewer real estate leaders believe remote work will affect hiring. Globally, 65% think flex or virtual positions will attract diverse talent versus 51% of real estate professionals. Could it be assumed that the sector doesn’t lend itself to remote work, due to its perceived interpersonal nature? Or should we conclude the fact that real estate management have been less willing to embrace virtual work for any position, including those with limited public interactions which is reflected in the responses. 

The human impact: Wellbeing and in-person interactions

During the pandemic, the real estate industry felt the strain of social distancing, as did so many others. Digital technologies, such as virtual reality or drones, may offer 360-degree property views, but nothing beats showing a property in person. 

Accordingly, 82% of professionals feel that remote work and social distancing make it harder to deliver the value of human touch. It’s also an issue of seller-buyer relationships, with 39% of leaders saying that remote work and social distancing are detrimental to establishing trust.

Leaders express concerns about virtual workforces, with 51% feeling that it affects collaborative working and 31% suggesting it thwarts creativity. Balancing a public health crisis with work-related goals isn’t easy. Similar to global leaders, real estate executives overwhelmingly agree “that staff physical and mental wellbeing is a top priority for our human resource department.” 

Going green in real estate

Climate change and green initiatives continue to fuel innovation in the real estate arena, with 71% of business leaders making changes to their business to profit in the low-carbon economy. Increasing digital capabilities and choosing purposeful alliances can further environmental plans. 

New partnerships with smart building designers assist in reconfiguring spaces to attract and retain tenants. IoT devices and sensor technologies help leaders visualise space use and automate building maintenance and management processes. 

Eco-friendly buildings and actions aren’t just about bettering the climate. They can build a better brand. Leaders understand that their clients are under pressure to lighten their industrial footprint or comply with potential new regulations. Real estate leaders can adjust their value propositions to meet clients’ potential needs by rethinking ways to utilise space and build new ones. 

New construction and supply chain challenges

Real estate segments experience varying levels of supply chain issues, with 45% saying they’re reassessing their supply chain to source closer to home, which is 14% less than their global peers. For those eyeing new construction, materials in short supply have led to steep increases in building costs. 

Leaders can avert a possible crisis by diversifying supply lines and looking for local manufacturers when possible. This does the double duty of making businesses more environmentally friendly and less reliant on trade relations.

Looking ahead: Streamline and thrive

The push for leaner operations and cost containment isn’t without challenges. However, 96% of business leaders based in this sector are confident in their ability to successfully steer the business in a new direction in response to the impact of COVID-19. Although 2021 brings uncertainty, real estate leaders are well-positioned to navigate what lies ahead.


Findings in this article are based on 51 survey responses from real estate business leaders collected in quarter 4 of 2020, as part of HLB’s Survey of Business Leaders 2021. The majority of businesses surveyed are privately or family owned. Thank you to Stephen Newbold from Colliers International for his valuable input. For the full research report see HLB’s Survey of Business Leaders 2021: Achieving the Post-Pandemic Vision: leaner, greener and keener. 

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Ralph Mitchison

Global Real Estate & Construction Industry Leader


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