A high-level government review into the City of London has concluded that it is riven by short-termism and staffed by too many people earning too much money. Professor John Kay, a leading economist, has made his recommendations after scores of submissions and interviews with top business and investment people. In particular, Mr Kay says that traders seeking short-term profits are not acting in the wider interests of the public and should be marginalised. His words are likely to be greeted with horror in City dealing rooms, where job losses are already common because of low levels of investor activity. Mr Kay agrees that his proposals would lead to fewer jobs for traders. He said: “There should be fewer of them and they should be paid less. The objective of financial markets is not to provide jobs for traders… We need a philosophical shift in the way people think about markets.” (The Independent, p47)
Supply Chain
Food and drink industry manufactures big water savings
Food and drink manufacturers have cut their operational water use by 14.4% thanks to an industry-wide voluntary agreement. The 70 signatories to the Federation House Agreement, managed by WRAP and the Food and Drink Federation, account for 24% of the food and drink manufacturing sector. Together, their savings equate to almost six million cubic metres of water – enough to fill 2,400 Olympic-sized swimming pools. Chocolate manufacturer and retailer Thorntons completed a detailed water audit which identified two underground leaks, resulting in savings of £60,000 a year, while meat processor Tulip ran ‘eco-treasure hunts’ to identify opportunities for savings. The progress has been welcomed, especially given that production at the sites monitored increased by 10.7% during the monitoring period. (Edie)
Environment
Work begins on Africa’s largest geothermal project
Kenya will embark on the construction of the continent’s largest geothermal project this week. The $1.3 billion power plant is part of Kenya’s effort to diversify its power source as it moves to cut reliance on hydropower, which currently contributes 46% of the country’s electricity needs, but which is vulnerable to weather fluctuations. With only 15% of Kenyans connected to the national grid, the country is currently implementing a development plan dubbed Vision 2030, which among other things seeks to develop the manufacturing sector. A government report, titled Least Cost Power Development Plan, projects that overall demand for electricity will grow at an annual rate of 9% in coming years. (The East African)
UK Treasury charged with ‘botching’ clean energy
The UK Treasury’s refusal to back the energy department’s low-carbon agenda has made flagship electricity market reforms “unworkable”, “vacuous” and counterproductive, the government has been told. A draft bill designed to spur billions of pounds of spending on power sources such as wind farms and nuclear plants is so flawed it is likely to scare off the very investors it is supposed to encourage, says a scathing report from the Commons energy committee. “The government is in danger of botching its plans to boost clean energy, because the Treasury is refusing to back new contracts to deliver investment in nuclear, wind, wave and carbon capture and storage,” said Tim Yeo, the Conservative MP chairing the committee. (Financial Times*, p3)
Inclusive Business
China targets ‘inclusive innovation’
China’s 12th Five-year Plan (2011-2015) marks a shift in focus from “pursuing economic growth” to “sharing the benefits of development with all people”. In this context, the Ministry of Finance of China and the World Bank Group recently organised the ‘Regional Inclusive Innovation Policy Forum’ in Beijing. Participants from different sectors shared cases of inclusive innovations that worked well in their countries, such as long-range wireless networks in Nepal and a scheme which dispatches scientists to work in rural areas of China. “Inclusive innovation is about utilising innovation to serve the needs of people at the economic base of the pyramid,” said Kurt Larsen, a senior education specialist with the World Bank Institute (WBI), “giving them access to basic goods, services and livelihood opportunities.” (World Bank)
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