Category: 3. Business

Corporate climate transition plans, once seen as internal strategy documents, are now emerging as critical tools to unlock sustainable finance and guide real economy decarbonisation. The virtual dialogue brought together Indian and emerging market voices to examine how credible transition planning can serve as a linchpin for capital mobilisation, regulatory alignment, and long-term resilience. The webinar was divided into two sessions- The first panel discussion focused on corporate transition plans and system-level enablers while the second panel reflected on the role of regulators in strengthening transition plan disclosures.

Greening the real economy in emerging markets like India presents a dual challenge: the need to decarbonise while meeting developmental priorities. At the same time, it offers a historic opportunity to recalibrate capital flows. India’s climate goals demand an estimated $10 trillion over the coming decades, an investment that must be front-loaded to avoid a disorderly, and more expensive, transition. This makes access to global capital essential. Yet, financing will only follow credible pathways. The first panel delved into what makes a transition plan not only ambitious but effective.

The message was clear: corporate decarbonization strategies must be rooted in local context and supported by enabling ecosystems. In India, a handful of major corporates have declared net-zero ambitions, but comprehensive, forward-looking transition plans remain rare. With coal still dominant and transitional technologies underdeveloped, Piyush Jha from Tata Steel emphasized that India must carve its own path, one that is pragmatic, yet forward-looking. As greenwashing concerns grow, particularly in hard-to-abate sectors like steel and cement, the need for robust, transparent, and context-sensitive planning has become more urgent. Investors, as Ivy Lau, Mizuho Bank noted, are moving beyond climate pledges to assess tangible progress: Are companies running pilots? Shifting fuels? Making measurable investments? Without demonstrable movement, access to transition finance, whether through bonds, loans, or blended capital, will remain limited.

India’s unique context further reinforces the need for customised strategies. Gireesh Shrimali, Oxford Sustainable Finance Group, highlighted that credible national transition plans must be backed by concrete policies and actions, as national ambition is ultimately the sum of all corporate ambitions. Without alignment and credibility at both levels, national targets risk remaining unachieved.

Speakers also highlighted the enabling role of ecosystem levers, from defining credible transition assets and decarbonisation roadmaps to building assurance capacity and sectoral guidance. With too many tools and benchmarks in play, companies need clarity and convergence to plan effectively and signal progress to stakeholders. Ultimately, transition plans should be seen as tools to inform finance, policy, and technology ecosystems, and in turn be shaped by them.

The second session turned the spotlight on regulatory frameworks and the evolving role of supervisors. Dien Sukmarini, OJK, emphasized that regulatory guidelines should be created through regular engagement with industry players to understand their challenges and expectations. Disclosure, when mandated, must be matched by supervisory review, board-level capacity-building, and forward-looking metrics. Only then can transition plans shift from paper to practice. Ramnath N. Iyer, IEEFA, emphasised the importance of robust taxonomies that define what constitutes “transition”, particularly for hard-to-abate sectors navigating complex shifts.

The discussion reaffirmed that transition is not a cost, it is a strategic lever for resilience and growth. As Ira from CETEx noted, transition planning not only mitigates climate risk but improves business resilience, reducing exposure to energy volatility and physical climate risks. While transparency is essential, transition planning frameworks must also account for external dependencies and the unpredictable nature of policy, technology, and physical climate risks.

As Neha Kumar, Climate Bonds Initiative, summarized, ambition is a two-way street, both corporates and policymakers need to raise the bar. Transition plans should be treated as growth strategies, not just environmental blueprints. With sectoral roadmaps, robust taxonomies, investor alignment, and regulatory clarity, India can move from commitments to scalable, ecosystem-wise implementation.

Transition planning, when done right, becomes more than a corporate tool, it becomes a platform for coordination across markets and policy. The path to net-zero will be paved by those who plan ambitiously, act decisively, and collaborate widely.

About the India initiative on Climate Risk and Sustainable Finance

“India Initiative on Climate Risks and Sustainable Finance (IICRSF)” led by the Climate Bonds Initiative with its partners ODI Global and auctusESG is a collaborative endeavor with the overarching purpose of supporting the efforts of financial regulators and policy makers at navigating the imminent transition, and simultaneously preparing and engaging with banks, DFIs, businesses on disclosures, transition plans and finance, building the required narrative and consensus, and supporting with the tools needed to augment financial flows from domestic and international https://www.climatebonds.net/regions/south-asia

Webinar event with IEEFA, Climate Bonds, ODI Global and auctusESG

Article also published on Climate Bonds

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Merck is nearing a roughly $10bn deal to buy lung disease-focused biotech Verona Pharma, the US drugmaker’s biggest acquisition in two years as it expands in respiratory medicine.

The acquisition of Verona would enhance the New Jersey-based pharmaceutical company’s pipeline with the addition of Ohtuvayre, a medicine approved in the US to treat chronic obstructive pulmonary disease (COPD), which analysts predict could generate peak annual sales of nearly $4bn by the mid-2030s. The drug is also in trials as a potential treatment for other lung conditions.  

The acquisition, which would be Merck’s largest since its $10.8bn takeover of Prometheus Biosciences in 2023, is the latest example of a pharmaceutical group targeting a biotech with an approved product already generating revenue to fill the gap left by blockbuster drugs coming off patent.

Merck’s cancer treatment Keytruda, the world’s top-selling drug with nearly $30bn a year in revenue, is coming off patent and being hit by US government price-setting rules as soon as 2028. Shares in Merck, known as MSD outside North America, are down 35 per cent over the past year, giving it a market value of $203bn as of market close on Tuesday.

As part of the deal, Merck would pay $107 per American depository share for Verona, a 23 per cent premium to the biotech’s closing price on Tuesday, according to three people familiar with the matter. The takeover values the respiratory disease-focused biotech at about $10bn.

The talks between the companies were at an advanced stage and a deal could be announced as soon as Wednesday, provided there are no last-minute hitches, the people added. Merck declined to comment, while Verona did not immediately respond to a request for comment.

Verona’s Ohtuvayre, which launched in the US last year after being approved by the Food and Drug Administration for the treatment of COPD in adult patients last year, has got off to a winning start, with 25,000 prescriptions filled by the end of the first quarter, exceeding analysts’ expectations.

Merck’s acquisition would fast track the international launch of the drug in countries outside the US, the people added. It comes as Merck gears up for a blitz of product launches, with plans to roll out more medicines over the next five years than it has ever done in that timeframe in its history.

Ohtuvayre was the first completely new inhaled medicine approved as a maintenance treatment for the 8.6mn US patients with COPD, a leading cause of death that destroys lung tissue and function, in the past two decades. Unlike existing COPD drugs, it is not a steroid-based treatment and instead works by inhibiting two different enzymes, working to open up the airways and reduce inflammation.

Verona, a London-headquartered biotech founded in 2005, has also studied the same treatment in patients with a host of other lung conditions, including bronchiectasis, asthma and cystic fibrosis, as well as in combination with another COPD drug, potentially widening the reach of the drug in the years to come.

The acquisition of Verona would give Merck, best known as a cancer drugmaker, a stronger foothold in respiratory medicine after the US approval of Winrevair last year, a treatment for a potentially fatal disease affecting the lungs and heart, which it acquired in its $11.5bn buyout of Acceleron Pharma in 2021.

Since Merck’s chief executive Rob Davis arrived in April 2021, Merck has ranked as one of the most active pharmaceutical groups for acquisitions and licensing deals, as measured by number of deals done and dollars spent. But in recent months investors have clamoured for more deals to offset the looming sales decline from Keytruda’s patent cliff.

Meanwhile, the life sciences sector has been destabilised this year by the possibility of drug pricing reforms under President Donald Trump’s administration, the threat of tariffs and changes to regulatory and public health agencies under the leadership of top US health official Robert F Kennedy Jr, a known vaccine sceptic.

Merck’s problems have been compounded by a sales slowdown in China for its top-selling human papillomavirus vaccine Gardasil. Trump’s tariff policy prompted Merck in May to cut its 2025 sales outlook.

Davis has previously said he is hunting for deals of $1bn-$15bn in value, or even higher if the right target emerges. Earlier this year, Merck struck an up to $2.2bn licensing deal with China-based Jiangsu Hengrui Pharmaceuticals for the global rights to its heart disease drug.

KARACHI – The buying rate of Saudi Riyal (SAR) registered another increase of five paisa against Pakistani rupee in open market on Wednesday as 1 SAR stood at Rs75.82.

The selling rate of Saudi Riyal also moved up accordingly and hovered at Rs76.19.

The Saudi riyal to Pakistani rupee exchange rate holds major significance for Pakistan due to remittances from overseas workers in Saudi Arabia.

A stronger riyal increases the value of remittances, supporting Pakistan’s economy, boosting foreign reserves, and helping stabilize the national currency against inflationary pressures.

1,000 Saudi Riyal in Pak Rupee

As the SAR buying rate stood at Rs75.82, an individual can exchange 1,000 Saudi Riyals for Rs75,820 in open market.

Currency exchange is vital for global trade, travel, and investment. It enables countries to buy and sell goods and services internationally by converting one currency into another. Exchange rates influence inflation, interest rates, and economic stability. For developing countries, like Pakistan, currency exchange impacts import costs, remittances, and foreign debt payments.

Meanwhile, the workers’ remittances from overseas to Pakistan recorded a significant growth of 28.8 percent during eleven months of fiscal year 2024-25, reached nearly $35 billion. During the period from July 2024 to May 2025, monthly inflows in May increased to $ 3.69 billion.

“Cumulatively, with an inflow of US$ 34.9 billion, workers’ remittances increased by 28.8 percent during Jul-May FY25 compared to US$ 27.1 billion received during Jul-May FY24,” the State Bank of Pakistan reported on Wednesday.

Pakistanis living in Saudi Arabia topped the chart as they sent $913.3 million in wake of remittances in May 2025 followed by $754.2 million from the UAE.

Ted Seides is the founder of Capital Allocators and former president of Protégé Partners.

On a slow summer day 18 years ago, I began communicating with Warren Buffett about a bet that pitted the performance of hedge funds against the S&P 500.

The suggestion turned into a charitable 10-year wager from January 1, 2008 to December 31, 2017. Carol Loomis announced it in Fortune as “Buffett’s Big Bet”. It looked good for the hedge funds in the early years around the global financial crisis, but the market rallied strongly thereafter. By the time of Berkshire Hathaway’s 2016 annual report, Buffett was able to take a victory lap.

Lots of virtual ink has been spilled about what the bet meant — some of it on pink pixels. Warren initially assessed his odds of winning at 60 per cent (but wrote in his 2016 annual letter as if victory was preordained). I initially called it at 85 per cent in our favour. Lots of outcomes could have happened, but only one did. In retrospect, I was overconfident, but I caution those who read too much into the results.

Annie Duke calls this “resulting”, a behavioural bias where people judge the quality of a decision based on the outcome rather than on the decision process itself. I still believe the odds were heavily in favour of hedge funds at the time, and an unprecedented act by the Fed bailed out the market from what could have been a lost decade.

Regardless of cause and effect, the bet led to unanticipated connections, relationships, and experiences. Warren and I met for dinner nearly every year, typically accompanied by a guest or two. Those guests included Todd Combs; Ted Weschler; my partner at the time and now Treasury secretary, Scott Bessent; hedge fund founder Bobby Jain; podcast star Patrick O’Shaughnessy; Permanent Equity founder Brent Beshore, and investor Steve Galbraith — which led directly to Warren honouring Steve’s close friend Jack Bogle at Berkshire’s annual meeting in 2017. I had a chance to meet Charlie Munger, who stereotypically said my bet was “stupid”.

Most importantly, with Warren’s win, Girls Inc of Omaha received over $2mn and purchased the Protégé House to provide residential support and guidance to Girls Inc. alumni. The growth of the $1mn bet into $2mn in proceeds is a story unto itself. We initially split the purchase of a zero-coupon bond that would mature in 10 years at $1mn. After the Fed dropped rates to zero, the $640,000 outlay had grown around 50 per cent. We decided to sell the bonds and buy Berkshire Hathaway stock, coincidentally shortly before Warren repurchased shares for the first time. The performance of the collateral for the bet far surpassed both the S&P 500 and the hedge funds.

Since then, many others have naturally reached out to me and proposed many different wagers.

Each came with conviction — Bitcoin HODLers, China bulls, emerging market mean-reverters, and Japan governance reformers. I don’t know if any communicated with Warren, but I didn’t see a relevant comparison in any of them.

A few weeks ago though, I thought of another bet that has equal — or greater — importance than the first. What’s the bet you ask? Private equity versus the S&P 500.

Comparing a portfolio of North American buyouts to the S&P 500 has important consequences, as private equity enters wealth management and seeks to access pension plans. In fact, I’d argue that this match-up could help shed light on one of the thorniest, most contentious debates in finance today.

I imagine we know what Warren thinks — high fees and extra expenses will doom private equity investors. A lot of outside factors could have impacted the result of our first bet (I wrote about it here), but that’s unlikely to happen with this comparison. This bet is much closer to faithfully representing Warren’s initial premise: that intelligent professionals with strong economic incentives to perform still cannot overcome the high fees they charge.

Both the S&P 500 and North American buyouts offer diversified exposure to the US economy. Businesses in public and private markets are similarly impacted by macroeconomic variables and have common geographic and sector exposure. (While the Mag 7 dominates the S&P 500, software and technology are the most represented sectors in buyouts.) Their pricing (P/E of stock and EV/EBITDA of buyouts) is correlated, in part because transactions between the two markets can arbitrage large pricing discrepancies.

The question, then, is whether their differences are enough for private equity to make up for the costs of doing business. Leverage, size, dispersion, illiquidity, and control each — in theory — positively impact private equity returns relative to the S&P 500.

— Leverage: The S&P 500 is approximately 0.6x debt-to-equity. Private equity is 1.5x. Assuming positive returns over a decade and a ROA above the cost of capital, leverage would boost private equity returns relative to the market.

— Size: Private equity-owned businesses are smaller than those in the S&P 500. Historically, small-cap companies outperformed large ones, although that hasn’t been true for a while.

— Dispersion: The dispersion of returns across private equity managers has been far wider than those in the public equity markets. This creates an opportunity to outperform within the asset class.

— Illiquidity: By design, private equity is illiquid. While illiquidity may not impact returns directly, it likely helps investors avoid getting in their own way. Dalbar’s quantitative analysis of investor behaviour consistently shows that public market investors earn far lower returns than the investments themselves.

— Control: Private equity firms are control owners of businesses and compensate management teams aligned with results. Public companies tend to have less engaged shareholders and less executive ownership.

Putting numbers to these concepts: assuming a 10 per cent return of the S&P 500 over 10 years, private equity would need to deliver approximately a 15 per cent gross return to beat the index. Higher leverage can make up 2-3 percentage points of that gap at current interest rates and spreads. However, the forty-year tailwind of declining interest rates will no longer support private market returns as it did in the past.

Next, smaller companies can grow faster than larger ones, a factor that could benefit private markets over time. Over the last century, small-cap stocks in the US have outperformed large by approximately 1.5 per cent per year, although that premium has been slightly negative since the GFC.

Adding up those two effects, private equity’s structural benefits could make up perhaps 80 per cent of the gap. The rest is up to allocators to select top private equity managers, private equity firms to make above-average investments, and management teams to deliver better operating results.

I described twelve examples of private equity transactions in my book, Private Equity Deals. These managers have many tools at their disposal to create value. When reading their stories, it’s hard to imagine they won’t find a way to deliver.

But as I learned from betting with Warren, the future is much harder to predict than the past. When you add it up, I’d put the odds of private equity outperforming the S&P 500 net of fees at around 40 per cent, which says next to nothing about what investors will actually experience.

Over the next few months, I’m going to speak to some podcast guests to see if we can identify an investable option to represent North American buyouts, and someone to take each side of the bet.

It might be fun to create a shadow wager starting on January 1 and report the results annually for the next 10 years. I’m even more excited to see if any unexpected benefits and connections surface this time around.

So . . . what do you think?

The London stock market risks “drifting into irrelevance” without government and regulatory reforms, ranging from tax breaks for stock market listings to looser bonus rules for directors, a lobbying group has said.

The 20 recommendation put forward by the Confederation of British Industry (CBI), which lobbies on behalf of UK businesses, suggest financial incentives, marketing campaigns and boardroom pay are central to guaranteeing the future success of the London Stock Exchange, which has been losing stock market listings and floats to foreign rivals.

“With domestic capital shifting away from UK equities, new listings having slowed … and high-growth firms often looking overseas to raise capital, the UK stands at a pivotal moment for the future of its public equity markets,” the CBI said.

The lobbying group claims that tax breaks could persuade more companies to list their shares. By making the costs of a flotation or initial public offering (IPO) tax deductible, the government would be ensuring more cash is available for reinvestment and growth, the CBI’s Revitalising UK Public Markets report said.

“IPOs are time-consuming, costly, and uncertain. The lack of tax deductibility for IPO expenses reduces the net proceeds retained by companies and may deter listings,” it said.

The London Stock Exchange was dealt another potential blow last week when it was reported that Pascal Soriot, the chief executive of AstraZeneca, had discussed shifting the stock market listing of the UK’s most valuable listed company to the US.

The report also said the UK should take advantage of uncertainty in the US, where a lack of predictable policy announcements from Donald Trump has made London a more attractive home for foreign companies’ secondary listings.

“Many Asian markets are growing faster than the UK but this presents an opportunity. London can offer companies in these regions a complementary venue for additional listings, particularly at a time when any Asian companies are becoming more cautious about extra-territorial US capital markets regulation,” the report said.

It comes days before the chancellor, Rachel Reeves, is to make her Mansion House speech and release the government’s financial services strategy, which is widely expected to suggest reforms to Isa savings rules, pension investments, and further City deregulation to increase growth and competition.

However, company rules should also be reviewed if government and regulators hope to revive the London market, the CBI report recommended. That included overhauling bonus rules for nonexecutive board members, which could encourage bosses to take more risks, it said.

Nonexecutive directors are barred from receiving share options or other types performance-related pay, under the UK corporate governance code. This is to “preserve independence and objectivity”, the CBI said. However, the lobby group said restrictions around share-based bonuses “may inadvertently encourage risk-averse board cultures”. .

The CBI said that the report was based on feedback from chairs and leaders of more than 30 listed companies, including FTSE 100 firms, as well as big investment houses and advisers.

Rupert Soames, chair of the CBI, said: “Most of the challenges facing the UK equity markets are common to other markets, including the growth of private capital, the increase in passive investment funds, and investors shifting assets to US markets.

“The opportunity now is for the UK to build on the work already done to lead the world in finding innovative solutions which will once again make London attractive to companies wishing to raise capital and list their stock, and to retail and institutional investors who wish to participate in the wealth creation owning stocks and shares provide.”