Responsible business: making good work pay is next big imperative
From policies on sustainable fishing and reducing carbon emissions, to campaigns to encourage clothes donations to Oxfam, Marks and Spencer widely promotes “Plan A” – its company-wide social responsibility and sustainability programme. According to the company’s own measure, Plan A placed a net financial burden of £40m on the company in 2007-08, its first year. Since breaking even in 2008-09 it has produced a net benefit annually that outstrips its first-year cost. In 2013-14, this gain reached £145m. Not all CSR programmes are alike, however. The value is often more complicated than what can be demonstrated in financial terms. The London Benchmarking Group (LBG), which measures companies’ investments in the community, found nearly a third of community investment by UK members in 2013 took the form of charitable donations, which may improve companies’ long-term standing in the public eye but are unlikely to lead to subsequent boosts in revenues and profits. Jon Lloyd, head of the LBG, says: “Companies still see the need, particularly when responding to emergency situations, to do the right thing and make a contribution without expectation of a [financial] return.” (Financial Times)*
International Development
How green is the 2014 World Cup?
With the world cup drawing to a close, critics speculate on the sustainable legacy of the game. Fraught with protests for the past year, the FIFA tournament has been criticized for its lack of transparency, corruption and levels of spending considered incompatible with the developing nation’s needs in basic services. Such controversies have overshadowed the sustainability actions undertaken by FIFA and Brazilian leaders. The debate over the sustainability of the World Cup and its legacy spilled over to other issues, generating a greater debate in the Brazilian media, social networks and within NGOs. On the other hand, some are calling these the most sustainable games. FIFA said that the World Cup created 700,000 jobs, over 300,000 of which are permanent, and that with the federal government, it has distributed cheap 30,000 match tickets to low-income families and indigenous groups. If nothing else, the dialogue on legacy and sustainability has been opened wide. (GreenBiz)
Climate Change
Shell ‘underestimating’ climate change risks to investors
Royal Dutch Shell has been accused of misrepresenting the risks of climate change to its shareholders, after a new analysis rejected the oil giant’s assertions that its fuel reserves will not become “stranded assets”. In May, Shell told its investors that it did not believe its proven oil and gas reserves will be devalued by global efforts to curb emissions by reducing fossil fuel consumption. However, in a response published on Wednesday, the Carbon Tracker Initiative – the NGO that has championed the stranded asset idea – and analysts from Energy Transition Advisors contested Shell’s argument, writing that Shell is in denial over the possibility that demand for its fuels will decline in the coming decades and noting that the company has founded its argument on carefully selected information. For the sake of its shareholders, the report urges Shell to engage with investors over their concerns, rather than turning a blind eye. (Blue&Green Tomorrow)
Supply Chain
CSR Asia Highlights the Benefits of Sustainable Palm Oil
Although keen to portray the image of producers of “green” biofuels, the palm oil industry has in actual fact been associated with a wide range of predatory business practices, extensive damage to ecosystems and biodiversity, and an abundance of air pollution and carbon emissions. For more than 15 years, stakeholders have been pressuring palm oil producers to clean up their act. In a new white paper, CSR Asia, in partnership with Oxfam, examines smallholders participating in the palm oil value chain – with an eye towards instituting equitable, sustainable business practices industry-wide. Focusing primarily on the work of the Roundtable for Sustainable Palm Oil – which was established in 2003 to define and implement sustainable palm oil standards – CSR Asia focuses on the certification of sustainable palm oil and the opportunities that this can provide for smallholders. Greater inclusion of smallholders in development and management of palm oil plantations and production promises to play a central role in sustainable palm oil initiatives. (Triple Pundit)
Tax
Corporation tax cuts cost UK over £5bn a year
The UK government’s aggressive cuts to corporation tax are costing more than £5bn a year, requiring funding from elsewhere in the Budget at a time of spending cuts.Businesses will pay nearly £8bn less corporation tax a year by 2016-17 after UK chancellor George Osborne pushes through what he terms “the largest reduction in the burden of corporation tax in our nation’s history”. Richard Murphy, a director of Tax Research UK who advises the Trades Union Congress on taxation, says he is unconvinced of the benefits of a strategy that made multinationals like Fiat and Pfizer want to move their holding companies – but few jobs or operations – to Britain. “It is attracting financial relocations but not much underlying investment and employment. The cost of achieving it is very high.” However, conclusive evidence of whether the corporation tax-cutting strategy has paid off is always likely to be elusive. The IFS’s Mr Johnson said: “It’s almost impossible to say in any clear sense whether it is ‘worth it’.” (Financial times)*
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