Scandal erupted this month after the UK’s Financial Services Authority and American authorities fined Barclays £291 million for deliberately making false submissions of interbank lending rates. It is the latest controversy to hit the UK’s troubled banking sector in the years since the credit crunch, which have seen public anger over bankers’ pay and perceived irresponsibility. Following the resignations of both chief executive Bob Diamond and chairman Marcus Agius, Barclays admitted that the public’s trust in banks has “been decimated and needs to be rebuilt”. Barclays said it needed a culture change that would see it “affirming key values” with “reinforcing mechanisms” to ensure staff behaved appropriately. Alluding to management and pay, it added “visible leadership” and rewards would have to be aligned to these values. The government is now considering bringing much tougher, US-style powers of prosecution to the City amid calls for the authorities to put bankers behind bars. (The Times*; The Telegraph)
HSBC chief resigns over ‘polluted culture of profit’
A senior HSBC executive resigned in front of a US Congressional committee this month, moments after senators accused the bank of laundering money for “drug kingpins” and rogue states such as Iran and Syria. A damning report by the Senate Homeland Security Committee says that HSBC had a “pervasively polluted” culture of putting profit ahead of the law, revealing that billions of dollars of cash was transported between HSBC banks in the US and Mexico, and that the bank raised no red flags when international businessmen cashed in millions of dollars in travellers cheques. David Bagley, HSBC’s head of group compliance since 2002, said that the bank had “fallen short of our own expectations and the expectations of our regulators” before announcing his resignation from the role. The UK’s trade minister, Lord Green, former chief executive and chairman of HSBC, released a statement expressing “regret”, but refused to appear in the House of Lords to answer questions over the scandal. (The Independent; The Guardian)
Technology
Apple in U-turn over environmental ratings system
Technology giant Apple announced this month that it would rejoin the American EPEAT environmental ratings system for electronic products, just days after leaving it. The reversal of the announcement, described by a senior Apple executive as a “mistake”, was apparently forced on the company by government agencies, schools and scientists which use EPEAT to certify the environmental credentials of computers they are considering purchasing. Apple has in the past year touted its own green credentials, most recently announcing a cleaner energy initiative at its data farms in North Carolina, but it has come in for criticism for the design of its latest laptop products, in which several components are not user-serviceable or replaceable. Bob Mansfield, Apple’s senior vice-president of hardware engineering, insisted that “our commitment to protecting the environment has never changed, and today it is as strong as ever”. (The Guardian)
Mobile phones bring rural Africans into the modern economy
A new report from Sub-Saharan Africa, funded by the Gates Foundation, shows that the mobile phone is the most popular way to transfer money in Kenya, Uganda and Tanzania, especially among rural populations. Only 1% of those surveyed in Uganda had transferred money by bank, while 43% had used a phone. One of the highest-profile mobile payments services on the continent is Kenya’s M-Pesa, which has extended banking services to 40% of the country’s adults. By some estimates, a third of Kenyan GDP now flows through the service, which is operated by Vodafone’s Kenyan subsidiary Safaricom. In a sign of things to come, Visa last year acquired the South African software company Fundamo, which provides the technology used by approximately a third of all mobile money systems. Visa is aiming to generate half of its revenue from outside the US by 2015, and sees emerging markets as critical to these plans. (Global Envision; The Atlantic)
Food & Beverage
India wakes up to fast food health risks
International food brands including McDonald’s, Pizza Hut and Coca-Cola are coming under increasing scrutiny as they fight it out for a slice of India’s growing fast food market. The dietary shift across India has had a “devastating” effect on nutrition, according to campaigners. India has the largest diabetes population in the world, according to the World Health Organisation, and heart disease has become the country’s biggest single cause of death. Advertising is rapidly altering public perceptions, argues health activist Shobha Shukla: “It has become a kind of status symbol to eat in McDonald’s and similar fast food chains… Even the very poor people think it is something like a show of upward mobility.” Officials have been slow to act, but the state government of Uttar Pradesh recently took the lead by banning the sale of fast food in or near government-run schools, and Delhi is due to follow. Global brands including McDonald’s, KFC and Subway have begun to respond by introducing low-fat alternatives to their menus, while PepsiCo insists it is now putting “significant marketing muscle” behind healthier offers. (The Guardian)
Textiles & Apparel
Sportswear industry looks to dump leather
Puma’s executive chairman Jochen Zeitz said recently that the sportswear company will have to find alternatives to leather for its athletic shoes, because of the ecological damage the material does to the planet. “We have to find alternative ways of producing our raw materials without asking nature to do it for us,” the Financial Times quoted Zeitz as saying. The announcement is just the latest sign that the sports footwear industry is searching for ways to cut its leather dependency. In the race to make the best sustainable athletic shoe, Nike recently launched a shoe made entirely of yarn, while Puma rolled out a sneaker made from recycled materials including rice husks. (Greenbiz)
Natural Resources
EU moves to shore up price of carbon emissions
The European Union has moved to shore up the faltering price of carbon dioxide emissions, amid widespread concern that a huge surplus has cut the incentive for companies to invest in low-carbon technology. But the changes announced to the emissions trading scheme are relatively minor, resulting in changes in the timings of auctions of carbon permits, rather than the large-scale reforms that campaigners and businesses had urged. Earlier in the month, major companies including Royal Dutch Shell, Statoil and commodities giant Bunge wrote to top EU officials calling for the urgent withdrawal of 1.4 billion carbon permits in order to support the flagging market. The current carbon price stands at about €7 (£5.40) per tonne of carbon, which is well below the price of €25-40 per tonne that analysts say is needed to encourage companies to change their behaviour. Connie Hedegaard, climate chief at the European Commission, promised that further, more sweeping reforms would be examined. “After the summer recess, the commission will also finalise the options for long-term structural measures,” she said. (The Guardian; Reuters)
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