Happy hump day, Flux fam!

Here's everything you need to know today - in under 3 minutes.

Today's big stories:

🚩Woolies flags a $220 million cost blowout

🌳CBA lands a $200 million green deal

👟Nike acquires NFT studio RTFKT

Oh and get this...

Yep, we're at it again. We wanna make the Flux newsletter even better in 2022. But we need your help.

We’ve put together a 2 minute survey  As a thank you, 3 lucky Flux readers will win a $100 Mastercard voucher. Not behd. Get into it. 😏

Woolies flags a big ($220 million) summer blowout and yup, that supply chain is still playing up

Background: Woolies have been one of the biggest winners from the pandemic (kudos to panic buying toilet paper). We're talking a 78% increase in net profits for the full-year to August.

What happened: Fast-forward to the first-half of the new financial year, and Woolies is singing a different (more solemn) tune. They've announced a $220 million cost blowout.

What else: It's all thanks to the ol' supply chain and COVID disruptions. On top of that, the company had to fork out for direct COVID-safe costs and indirect costs like higher fuel prices.

So what's the key learning?

💡Direct and indirect costs are the two major kinds of expenses that companies can incur.

💡We've got:

• Direct costs: i.e. costs that can be directly tied to a specific good or service (like materials, supplies, wages)
• Indirect costs: i.e. costs that are difficult to attach to a specific product (fringe benefits, rent and utilities).
  

💡So, personal protective equipment for production staff is a direct cost that Woolies incurred, while higher fuel prices is an indirect cost.

CBA inks a deal with IFM for $200 million green loans and Greta and Leo are laughing

Background: IFM Investors are an investment company slash fund manager that started around 25 years ago. And this crew invest money on behalf of more than 550 institutions worldwide - and lots of these are Aussie industry super funds.

What happened: Now, IFM have committed to deposit $200 million into a term deposit with CommBank - Australia's biggest bank.

What else: But there's a 'lil caveat on this one. CBA can't dish this cash out willy nilly - it can only be used to fund sustainability-linked loans.

So what's the key learning?

💡When a bank receives money from you (let's say $10k), they will lend that money out to someone else. That's how they make money. They could lend to someone looking for a personal loan, or a mining company looking to fund its next big project.

💡But in this case, it's a little different. The IFM term deposit means the bank will exclusively allocate their funds to sustainability-linked loans.

💡Sustainability-linked loans are loans that offer corporate borrowers cheaper loans in exchange for hitting non-financial targets (this could be environmental targets, Indigenous employment or gender diversity).

Nike takes a stab at web3 by acquiring NFT studio RTFKT so get ready to virtually pay up

Background: Nike are the sportswear OGs - and they reckon they're very forward-thinking. This crew are already in Fortnite games, the ~metaverse~ and all over augmented reality.

What happened: Now, Nike are taking a massive leap into the crypto world by acquiring NFT studio RTFKT (pronounced artefact, for all you acronym noobs).

What else: RTFKT have already dabbled in creating virtual shoes, so it's a nice fit. While the terms of the deal haven't been disclosed, the company was valued at US$33.3 million back in May.

So what's the key learning?

💡A business model is a strategic plan that a business creates to earn money. But the world is constantly changing and these business models need to adapt.

💡Nike started out in the early 60s as a company that sold Japanese running shoes. Then it began manufacturing its own shoes...and later clothing.

💡 It brought Air Jordans to the digital world via Fortnite...invested in the metaverse..and now, bought an NFT studio.