Swiss bank Credit Suisse allegedly “helped its US customers conceal their Swiss accounts” and avoid billions of dollars in American taxes. A report by a US congressional committee claims the bank opened Swiss accounts for more than 22,000 US customers, with assets totalling $12 billion. The report alleges bankers helped clients create offshore shell entities to avoid arousing suspicion. It said the practices included “opening undeclared Swiss accounts” or accounts to “mask their US ownership”, as well as sending Swiss bankers to the US to recruit new customers and “service existing Swiss accounts without creating paper trails”. Last week Credit Suisse agreed to pay $197 million to regulators after it admitted to servicing thousands of US clients without approval and said that it was “working towards a resolution” with US authorities. Senator John McCain said that, “for too long, international financial institutions like Credit Suisse have profited from their offshore tax haven schemes while depriving the US economy of billions of dollars in tax revenues by facilitating US tax evasion.” (BBC)
Supply Chain
Ikea subsidiary loses forestry accreditation over harvesting of wildlife habitats
Swedish furniture chain Ikea has been accused of felling up to 600 year old trees from protected woodlands to make its furniture. As a result, Swedwood, Ikea’s forestry subsidiary has been stripped of its Forest Stewardship Council (FSC) accreditation. The moves comes after an audit of Swedwood’s operations in Russia found a number of problems, including harvesting of “key biotopes”, or important wildlife habitats; the lack of a proper environmental impact assessment; and lack of protective equipment for workers. Linda Ellegaard Nordstrom, a director of the campaign group Protect the Forest Sweden, said that, “the report raises several deficiencies, but does not describe the main problem, which is fragmenting the forest.” In a statement, Ikea said that, “a majority of the deviations have already been corrected and our full focus is now on correcting the remaining deviations and reinstating the FSC certificate urgently. We take our responsibility for the forests and the people who work there very seriously… Ikea is committed to responsible forest management and to the principles of the FSC.” (Supply Management, Sunday Times*)
Confidential papers raise fears over conflict gold
Hundreds of millions of dollars worth of suspect gold could have poured into global markets as major breaches have been found in new international rules designed to tackle an underground trade linked to African warlords and human rights abuses. Confidential papers detail how, in 2012, one of the world’s biggest gold refineries ignored guidelines designed to stop the trade in so-called conflict gold. While there is no evidence that the refinery accepted conflict gold, major breaches in new guidelines were uncovered, raising concern about the history of huge volumes of shipments. These allegations are a setback to international efforts – championed by Barack Obama, the UN, the EU and campaign groups – to stamp out the illicit trade in conflict gold by requiring the world’s largest refineries to be independently audited to check that they are sourcing gold responsibly and publishing the findings. These findings follow recent announcements from both Apple and Intel, who have confirmed that all gold used in the circuitry of their products is now conflict free. (Guardian)
Energy
Japan retains role for nuclear in new energy strategy
Japan has confirmed that nuclear power will remain an important source of electricity generation for the country, which has seen widespread opposition to nuclear power since the Fukushima disaster in 2011. Prior to the meltdown, Japan planned to raise its share of nuclear power from 30 percent to 50 percent, but the strategy was abandoned in the wake of the disaster. However, Prime Minister Shinzo Abe believes nuclear power can be a safe technology with the right regulations in place. The plan says a mix of nuclear, renewables, and fossil fuels will be the most reliable way to meet Japan’s energy needs, with an emphasis on coal and hydropower. Outside of hydropower, renewables represent just two to three percent of the overall power mix and while a number of high profile solar projects have been initiated since 2011 they are not expected to become significant contributors to Japan’s energy supplies in the short term. However, this modest expansion in solar projects has pushed Japan into fourth place in an Ernst & Young ranking of the most attractive countries for renewable energy investors. (Business Green)
Reporting
New standards urge financial sector to address sustainability issues
A new set of sustainability accounting standards, addressing the environmental, social and governance (ESG) issues related to the financial sector, have launched today. The new provisional standards, developed by The Sustainability Accounting Standards Board (SASB), covers issues relating to commercial banks, consumer finance, insurance, investment banking, mortgage finance, and security and commodity exchanges. Examples of issues included in the standards are customer privacy and data security; integration of ESG factors in credit risk analysis, investment management and advisory; and responsible lending and debt prevention. According to SASB, the new standards, which identify the minimum set of sustainability issues for each industry, are designed to be “cost effective for companies and decision useful for investors”. Former PwC International CEO, Samuel Di Piazza, said that, “the standards create comparative, industry-based benchmarks. Their adoption over time is simply inevitable.” (Edie)
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