Google's executive chairman, Eric Schmidt, has defended his company paying just £6m in UK corporation tax. His comments came after a committee of MPs last year denounced multinationals – including Google – who pay little tax on their UK earnings, as “immoral”. Mr Schmidt said his firm invested heavily in the UK and its services boost the economy. “We empower literally billions of pounds of start-ups through our advertising network and so forth,” he said. “And we're a key part of the electronic commerce expansion of Britain, which is driving a lot of economic growth for the country.” He added that Google's behaviour reflected the way all big international companies manage their taxes. (BBC)
Glencore accused of unacceptable trades with Iran
One of Britain's biggest companies is accused of making millions of pounds selling goods to Iran, including to a state-owned firm that supplies the regime's nuclear programme. Glencore, a commodity trading house, traded $659m (£430m) of goods, including aluminium oxide, to Iran last year, the Guardian has established. The company has admitted that some of its aluminium oxide ended up in the hands of Iranian Aluminium Company (Iralco). Trafigura, another commodity trading house, has also admitted to trading an unspecified aluminium oxide with Iralco in the past. The International Atomic Energy Agency has named Iralco as supplying aluminium to Iran Centrifuge Technology Company (Tesa), which is part of the Atomic Energy Organisation of Iran (AEOI). (Guardian)
G4S to quit key Israel contracts amid outcry
G4S, the world’s biggest security company by revenues, has confirmed it is planning to quit key contracts in Israel amid protests against its involvement in settlements within occupied Palestinian territories. The company employs 6,000 people in Israel, where it provides and maintains screening equipment for several West Bank military checkpoints. It also manages security systems at the controversial Ofer Prison in the Occupied West Bank. But with protests continuing outside both the company’s headquarters in London and internationally, G4S said it would exit the contracts covering Ofer, the checkpoints and the West Bank police headquarters when they terminate in 2015. (Financial Times*)
Governance
Signs of restraint on executive pay
As European companies prepare to face investors at this year’s round of shareholder meetings, there are signs that a mood of greater restraint over executive pay may be setting in. Banco Santander, Spain’s largest lender by assets, cut the pay of its top executives by more than a third for the last financial year, with Emilio Botín, its executive chairman, taking a 32 percent pay cut to €3m. Meanwhile, Deutsche Bank has proposed to cap the bonuses of its co-chief executives, for the coming year. Switzerland’s largest bank, UBS, has cut the bonus pool for its investment bank by 20 percent. However, the caution extends beyond the financial sector; Volkswagen cut the pay of its chief executive from €17.5m in 2011 to €14.5m in 2012, even as its profits soared. (Financial Times*)
Reporting
Unilever Sustainable Living Plan two years on
Unilever’s commitment to put sustainable and equitable growth at the heart of its business model is helping to drive increased sales while reducing costs and risks, according to the second Unilever Sustainable Living Plan Progress Report, published today. In 2010 Unilever set three big goals, all to be achieved by 2020: helping more than a billion people to improve their health and well-being; sourcing 100 percent of agricultural materials sustainably; and halving the environmental footprint of its products across the value chain. In the new report, Unilever reports solid progress on these goals but also highlights that even more collaboration is needed in order to reach its goals and achieve large scale change. (Unilever)
Policy & Research
Carbon bubble will plunge the world into another financial crisis
The world could be heading for a major economic crisis as stock markets inflate a huge investment bubble in fossil fuels, according to a new report by Lord (Nicholas) Stern, a professor at the London School of Economics, and the thinktank Carbon Tracker. The so-called “carbon bubble” is the result of an over-valuation of oil, coal and gas reserves held by fossil fuel companies. According to the report, supported by organisations including HSBC, Citi, Standard and Poor's and the International Energy Agency, at least two-thirds of these reserves must remain underground if the world is to meet existing internationally agreed targets on climate change. If the agreements hold, these reserves will be in effect unburnable and so worthless – leading to massive market losses. (Guardian)
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