Here's everything you need to know today in under 3 minutes.
Background: We know that Coles, aka Big Red aka the $25 billion Aussie supermarket giant, has just canned its plastic Little Shop collectibles. All in the name of sustainability.
What happened: But now, Coles has gone one step further. They have set some lofty sustainability targets and made a big bet that they will hit them.
What else: How does that work? Well, Coles just refinanced $1.3 billion in debt to sustainability linked loans. If they achieve these targets, they'll pay lower interest rates. If they don't, they'll pay higher interest rates. Simple.
💡The market for green loans and sustainable finance has exploded over the past few years. Get this: sustainability linked loans rose four-fold to $6.4 billion in 2020. Wowww!
💡Green loans are a type of credit offered by a lender on the basis that the borrowers uses the cash for something environmentally friendly. Think: building a solar plant.
💡Sustainability-linked loans (SLL for short) are loans designed with an incentive structure. Essentially, the loan repayments are linked to the borrower's ability to meet sustainability targets (like reducing CO2 emissions).
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Background: Medibank is one of Australia's biggest private health insurers. It has a market cap of nearly $10 billion, and covers around 3.7 million Aussies.
What happened: Young Aussies haven't always been big fans of private health insurance companies. And that's why Medibank bought AHM in 2009 and launched it as a simplified, no-frills private health brand for the younger gen. It's kinda like Medibank's version of Jetstar (owned by Qantas).
What else: Now, Medibank's seen a 3.5% increase in policyholders - and it's all thanks to AHM. The catch? Because they've attracted so many young users, they need to contribute more cash to the 'risk equalisation pool'.
💡 Unlike car insurance or life insurance, private health insurance isn't 'risk rated'. This means everyone is entitled to the same health cover, at the same price, regardless of age, sex, race or health status.
💡With no 'risk ratings', it means that a healthy 20-year old-will pay the same premium as an unwell 60-year-old. The theory is it helps keep healthcare affordable for our ageing population. But it ain't so great for insurers. Because, well, older policyholders = more risks = more costs. Younger policyholder = less risk = less costs.
💡But in the interests of fairness, private health insurers with lower-risk customers (aka youngins), like AHM, need to contribute more cash to a 'risk equalisation pool'. The funds in the pool then subsidises those private health insurers with older customers. Sharing is caring.
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Background: TikTok - aka the most addictive social media app in the world - does just about everything. You can lip-sync to vids for fun, use a VHS filter to 'rewind' to your childhood and now, you can do your shopping too.
What happened: TikTok has partnered with e-commerce platform Shopify. TikTok Business accounts will be able to add a 'shopping' tab to their TikTok profiles, and users will be able to shop directly from those accounts.
What else: TikTok is now following in the footsteps of Facebook who created Facebook Shops and Instagram Checkout within their apps last year.
💡 Every influencer and creator is now their own retailer. And this is alllll part of a big shift toward what is known as social commerce (ie buying products directly within a social media platform).
💡 There are around 50 million creators today, and big platforms like Facebook, YouTube, Insta and now TikTok pay big bucks to get creators on their platforms.
💡 For TikTok, this as a new step in the ‘creator economy’. Where creators can make money from their audience. It's also a big challenge to FB and Insta. TikTok is saying "just bring it".
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