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Transparency failings among big business

More than seven out of ten of the world’s largest publicly traded companies fail to disclose the taxes they pay outside their country of domicile, while more than four out of ten do not disclose revenues generated abroad. The findings emerge from a study of the 124 largest listed companies by corruption watchdog Transparency International. Extractive companies perform especially poorly. Of the 24 mining firms and oil and gas businesses in the group, 19 disclose tax payments and revenue in less than half the countries where they operate. This puts them at risk of non-compliance when new disclosure rules come into force in the EU and US next year. That said, three of the top four ranked companies are extractives: BHP Billiton, Eni and Statoil. At a country level, Chinese companies scored badly overall. Of the worst 11 companies for transparency and anti-corruption measures, six are based in China.

More women in boards of FTSE firms

The number of women on the FTSE 100 boards exceed one fifth (22.8%), an interim report by the Cranfield School of Management finds. The figure drops to just above one sixth (17.4%) for FTSE 250 companies. The figures mark an 82% and 124% increase for FTSE 100 and 250 companies respectively, since March 2011. It also puts the UK’s largest listed firms on track to hit a target set by Lord (Mervyn) Davies, the former banker commissioned to review the role of women on boards, for 25% female board representation by 2015. One third of new directorships have gone to women over the past year. In the FTSE 100, 24 women now hold executive directorships, representing 8.4% of the total. In order to hit next year’s 25% target, 24 more women are needed in the FTSE 100 and 150 across the FTSE 250. The report also finds that 58% of companies set measurable objectives to increase the number of women on their board. However, only 38% address diversity in their board evaluation process.

“Women on Boards: Progress Report”, Cranfield School of Management

Clean tech on rise in emerging markets

Clean energy capacity in Africa, Asia, Latin America and the Caribbean has more than doubled in the past five years, according to the Global Climatescope 2014 report. The 142GW increase in capacity represents 143% growth. By contrast, the capacity of OECD nations grew by only 84% (to 213GW) over the same five-year period. Leading the charge is China, which has emerged as the world’s largest manufacturer and user of wind and solar equipment. Asia’s economic powerhouse was quickly followed by Brazil. Meanwhile, Africa’s fastest growing nations in terms of green power capacity are South Africa, Kenya and Uganda.

Findings from another survey suggest not all is rosy in emerging markets. Indonesia, China, Vietnam and Mongolia all rank in the bottom 10 nations of the Global Green Economy Index. Published by US consultancy Dual Citizen, the report matches perceptions of green growth against actual performance in 60 countries. Developed economies dominate the list (which is headed by Norway), accounting for all but one (Costa Rica) of the top 10 countries on the performance index. The UK slips from eighth place in the perception index to 20th when its actual performance is considered. Canada and the US fall similarly sharply, from 6th and 12th on the perception index to 28th and 29th in practice, respectively.

“Global Climatescope 2014”, Inter-American Development Bank

“Global Green Economy Index”, Dual Citizen

Financial inclusion survey

Peru ranks first in a major survey about financial inclusion, followed by Colombia, the Philippines and Chile. Overall, Latin America and the Caribbean and East and South Asia share top place as the most inclusive regions. The survey ranks low and middle-income countries according to the conditions they offer for expanding access to financial services for underserved populations.

“Global Microscope 2014”, Economist Intelligence Unit

Institutional Insights

IPCC: zero emissions by 2100

Governments can keep climate change in check at manageable costs, but will have to cut greenhouse gas emissions to zero by 2100 to limit risks of irreversible damage, according to a report by the United Nations’ Intergovernmental Panel on Climate Change. The UN aims to limit average temperature rises to 2 degrees Celsius above pre-industrial levels. Temperatures are already up 0.85C. To hit the 2C target, world emissions need to fall by 40-70% of current levels, the IPCC argues. The cost to growth in the consumption of goods and services would be negligible (just 0.06% per year), the high-level panel states. At least 95% of global emissions are reckoned to be the result of man-made emissions of greenhouse gases, rather than natural variations in the climate, according to the report. In 2007, the IPCC put the figure at 90%.

Climate Change 2014: Synthesis Report

Expansion for protected areas

More than 6m square kilometres of land has been “protected” in the past four years, according to a new UN Environment Programme report. Globally, about 209,000 protected areas now cover 15.4% of the planet’s terrestrial and inland water areas, and 3.4 % of the oceans. Nearly one tenth of all marine areas within national jurisdiction (0-200 nautical miles) now fall within protected areas. The 2010 Convention on Biological Diversity sets a goal of 17% of terrestrial and inland water areas to be covered by 2020. To meet that target, protection status will need to be extended to 2.2m square kilometres of terrestrial and inland water areas. An additional 2m square kilometres of marine area within national jurisdictions will need to be designated as protected areas to hit the 10% target set by the Convention.

Worryingly, protected status currently only covers 22-23% of areas of importance for biodiversity. Meanwhile, only 29% of the area of nationally designated protected areas have been assessed for Protected Area Management Effectiveness. On a more positive note, 92% of the 192 national signatories to the Convention have developed National Biodiversity Strategies and Action Plans.

UNEP Protected Planet report

CDP: deforestation and water risks

Three-quarters of the 162 companies contributing data to the Carbon Disclosure Project’s work on deforestation recognise a material risk to their business from the key agricultural commodities contributing to deforestation: cattle products, palm oil, timber products and soy. Companies further along the supply chain are less likely to recognise operational risks, however. Only about one in three manufacturers identify risks associated with soya, for example, compared with 83% of soya producers. Risks vary between commodity types, too. Only 46% of CDP’s reporting companies recognise risks associated with cattle products, for example, compared with 62% of those reporting on palm oil.

The CDP report, which represents companies with a market capitalisation of $3.24tn, notes that the number of investor signatories demanding corporate disclosure through CDP’s forest programme has increased by 30% during 2014. It also welcomes steps by individual companies. Wilmar International’s anti-deforestation policy is estimated to prevent the emission of more than 1.5 Gigatonnes of CO2 by 2020, equivalent to the annual carbon emissions from the consumption of energy in Central and South America combined. More than 1 billion people depend on forests for their livelihoods, the report states. One tenth of global greenhouse gas emissions, meanwhile, come from deforestation.

In a separate report, CDP finds that 68% of companies listed in the FTSE Global 500 Equity Index believe water risks could generate a “substantive change” in their business. As many as one fifth (22%) believe that water-related issued could actually limit their ability to grow as a business. The findings are based on reports by 174 companies. Of these, 62% say that responsibility for water issues ultimately lies with their boards, compared with 58% in 2013. More than four-fifths of corporate reporters have goals and targets to reduce water use.

CDP Global Forests report: Deforestation-free Supply Chains


CDP Global Water Report

Corporate Snapshots

Microsoft’s worrying supply audits

Microsoft reports 40 “serious findings” from its supplier audits this year, up from 22 last year. The most significant problem centres on wages and benefits (14 cases), with non-payment of overtime the chief concern. Transgressions of the company’s principles on non-discrimination (6 cases) and freely chosen work (6 cases) – such as requiring factory workers to say in the factory dormitory or retaining passports – are other common areas of non-compliance. In total, Microsoft completed 217 third-party audits. Of these, it carried out internal assessments of 131 suppliers judged to be high and medium risk. In 2013, it completed 278 audits and 149 assessments, respectively. Over the past 12 months, the tech giant also developed and made available to suppliers 40 environmental, health, and safety (EH&S) training course modules.

2014 Microsoft Citizenship Report

Westpac increases clean tech investments

Westpac increased lending to the green technologies and environmental services sector to $8bn in 2014. Some 59% of the Australian bank’s total energy financing is now directed to renewable energy generation, including hydro, wind and solar. Westpac also registered a 26% rise in its lending to the social and affordable housing sector, to $820m. It has a commitment to make up to $2bn available to this sector by 2017. Other highlights in its latest annual report include establishment the Westpac Bicentennial Foundation, a $100m fund to provide 100 education scholarships a year.

Westpac Annual Review and Sustainability Report 2014

BAT supporting farmers

British American Tobacco calculated that it invests more than £65m in supporting its contracted farmers, who number more than 100,000. In a special report on its producers, the tobacco company reveals that it buys more than 400,000 tonnes of tobacco each year, mainly from farmers in Asia, Africa and Latin America. Other notable statistics in the report include the 170m trees that BAT has planted over the past six years as part of its afforestation programmes and the £30m it has invested in community projects in tobacco-growing countries over the past five years.

Sustainability Focus Report: Supporting Farmers’ Livelihoods


Clean technology  Corporate tax  deforestation  emerging markets  gender equality  IPCC  protected land  tax avoidance  water conservation  zero emissions 

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