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July 01, 2014

Corporate Reputation

Greenpeace calls on Lego to end its ‘playdates with Shell’

In a report released today, Greenpeace, has called on Lego to end its long-running co-promotional activities with oil company Shell. The report, entitled Lego is Keeping Bad Company, attacks the co-promotional activities of the two companies, saying that the 16 million Shell-branded Lego sets sold last year are influencing the next generation of consumers. This is seen as a ploy by a company that is responsible for a significant portion of global carbon emissions to gain its social license to operate and continue exploiting the world’s limited natural resources. In perhaps the report’s most scathing comment, Greenpeace alleges that “Shell has launched an insidious invasion of children’s playrooms in order to prop up its public image.” The report alleges that Lego, one of the world’s most trusted brands, has been used to give Shell a ‘facelift’. The report also contrasts the ‘good’ Lego does for the environment, such as investing in a 77-turbine wind farm and aiming to be completely powered by renewable energy by 2020, with the ‘bad’ shell does, particularly in its Arctic drilling, to show why the companies are ‘bad playmates’. (Greenpeace)


Facebook study breached ethical guidelines, researchers say

Facebook’s experiment, in which it manipulated nearly 700,000 users’ news feeds to see whether it affected their emotions, has been roundly condemned by researchers, who say that it breaches ethical guidelines for informed consent. James Grimmelmann, professor of law at the University of Maryland, points out in his blog post that “Facebook didn’t give users informed consent” to allow them to decide whether to take part in the study, under US human subjects research. “The study harmed participants,” because it changed their mood, Grimmelmann commented. In the experiment, certain elements were hidden from 689,003 peoples’ news feed – about 0.04% of users, or 1 in 2,500 – over the course of one week in 2012. This meant “a small percentage” of emotional words were concealed from peoples’ news feeds, without their knowledge, to test what effect that had on the statuses or “Likes” that they then posted or reacted to. Contrary to expectation, the results found that peoples’ emotions were reinforced by what they saw – what the researchers called “emotional contagion”. (The Guardian)


Barclays discloses global tax payments

The Luxembourg operations of British financial services company Barclays generated £1.4bn in profit last year, representing £100 million in profit per Luxembourg employee. The data shows Luxembourg to be the second most profitable country for Barclays, after the UK, where it made £4.9bn in profits. The bank paid only £55 million in corporation tax in the UK and only £20 million in Luxembourg over the same period. This compares to the £226 million paid in South Africa and £215 million in the USA. Barclays’ structured capital markets unit, seen as its tax avoidance unit, largely uses Luxembourg for its operations. The unit will eventually be shut down as part of Barclays’ CEO Antony Jenkins’ efforts to clean up the bank’s reputation. Barclays has said that it has a duty to its shareholders not to pay greater levels of tax than it owes, that it is proud of the contributions it makes and that it does “not seek to avoid paying our share.” (The Guardian)

Human Rights

Samsung misses target on Chinese labour violations

Samsung Electronics’ sustainability report, released this week, shows that legal and safety violations in its Chinese suppliers have persisted despite the Korean technology giant’s pledge to eliminate such violations from its supply chain by the end of 2012. The revelation is a result of an audit instigated in response to previous findings of supplier violations in September 2012. The audit found that of the 100 suppliers inspected, 59 did not provide sufficient safety equipment or supervision to their workers and 33 suppliers disciplined workers with fines or penalties. The audit also revealed that a minority of suppliers had continued discriminating in hiring, had contract irregularities and were not providing workers with copies of contracts. Samsung has ordered all suppliers in question to eliminate these practices. Samsung’s disclosure offers a greater level of transparency than is regularly seen in leading Asian companies, and is a reflection of broader issues in the Chinese manufacturing sector. (Financial Times*)



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Image source: Shell LEGO Ferrari 21 by Vernon Chan/CC BY 2.0

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