Sixty-five percent of Swiss voters have rejected a proposal to cap executives’ pay, which would have preventing executives from earning more in a month than their lowest paid colleagues could earn in a year. David Roth, who led the political support for the referendum, attributed the defeat to “scare tactics” from companies, who claimed that the proposal would undermine Switzerland’s business competitiveness and the risk that multinational corporations would relocate their offices. Deborah Warburton, a partner in the UK executive search firm Hedley May, said that “even though it was a 'no' vote, the question of how to make executive pay fairer is still very much a live issue, with the UK having implemented a law giving shareholders a binding vote on executive pay only last month, France and Germany also considering such measures, and the EU working on potential draft legislation to give shareholders voting rights over executive pay." (The Guardian; The Independent)
Survey: Sexism rife in global hedge fund companies
According to a survey by the Financial Times of 340 global hedge fund management staff, 55 percent of women said that they had suffered “inappropriate” behaviour in the office and a third of female employees have reportedly suffered sexual harassment at work. A female respondent at a US hedge fund firm said that she knew several women who had left fund management “as a direct result of gender discrimination and harassment.” Mark McCombe, the Asia-Pacific chairman at the US asset management firm BlackRock, said that the survey should act as “a wake-up call to companies globally to end sexual discrimination in all forms.” Anne Richards, the chief investment officer at the UK firm Aberdeen Asset Management, said that she had experienced “belittling behaviour” at shareholder meetings and with clients because of her gender. Ms Richards is calling on hedge fund companies to set up external hotlines to ensure that women “can expose sexist behaviour in a way that will not destroy their careers if they report a colleague or client.” (Financial Times*)
Environment
UN agrees multibillion dollar framework to tackle deforestation in developing countries
The UN has announced an agreement on “results based” funding for its Reducing Emissions from Deforestation and Forest Degradation (REDD) in developing countries programme. The aim of the agreement is to pave the way for multibillion dollar investments from governments, funding agencies and private firms in schemes to halt deforestation. Under the new rules, the Green Climate Fund will play a key role in channelling finance for projects to host governments, who in turn must set up national agencies to oversee the money. Money will be given to governments that can prove that they have reduced carbon emissions without harming local communities or biological diversity. (Reuters)
Responsible Investment
New index rates GSK and Unilever among most sustainable investments
According to a new index released by the Swiss sustainability rating agency Inrate, GlaxoSmithKline, Unilever and the Zurich Insurance Group are the most sustainable companies in Europe. The Inrate Sustainability Guide 2013, which ranks Stoxx Europe 50 companies on their environmental and social performance, ranks companies from the clothing, household and software sectors as the most sustainable, with companies in the energy, resources and nutrition sectors, with the oil firm Shell, receiving the lowest ranking. The chief executive of Inrate, Philippe Spicher, said that as sustainability indices can sometimes be misleading owing to firms’ greenwashing their sustainability credentials, “Inrate places the environmental and social impact at the heart of its sustainability analysis. We analyse and understand a company’s business activities as well as the environmental and social issues at stake.” (Blue & Green Tomorrow)
UK firms call for more business diversity to achieve long-term sustainable growth
Twelve UK companies, including Deloitte, Arup, John Lewis and Anglian Water, are calling for a greater diversity of business forms to win back public trust, motivate employees and to achieve sustainable growth. The group have warned that UK public concern about the short-term pressures imposed by shareholders is increasing, as is public concern about entrusting public sector contracts to businesses which are driven only by shareholder returns. According to a report by the 12 companies, which was carried out by the UK think tank Tomorrow’s Company, executives should regularly review their firm’s business model, make changes it if does not further their objectives, and consider adopting models such as social enterprise, co-ops and employee-owned businesses. Mark Preston, the chief executive of the UK property company Grosvenor, said that “diversity of business form fuels innovation, resilience and growth, and provides greater flexibility to keep up with changing societal and customer expectations.” (Financial Times*)
Policy
UK to cap payday lenders’ interest charges
The UK Government has announced that the UK Financial Conduct Authority will cap the interest charges set by payday lenders. The UK Government said that “if we don’t crack down on the whole cost of credit then wherever payday lenders can recoup their costs they will.” The move follows criticism by UK Government ministers, UK consumer groups and the Archbishop of Canterbury, who has vowed to put payday lenders such as Wonga out of business, after it was revealed that some payday lenders charge more than 5,000 percent interest on loans. The UK Treasury said that the results of a cap on payday lenders in Australia was part of the evidence in support of the decision. (BBC; Reuters)
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