World Council of Churches pulls fossil fuel investments
The World Council of Churches (WCC), an umbrella group for nearly 350 churches representing over half a million Christians worldwide, has said it will stop investing in fossil fuels. The divestment is being hailed as a major victory by campaign groups, who are also targeting other institutional investors such as pension funds, universities and local governments to divest from fossil fuels. The campaign group 350.org said the commitment may be the most significant yet made, however it is not currently clear whether the decision will apply only to the WCC itself, which has a relatively small investment fund, or whether it will apply to all members, and their much larger funds, as well. 350.org’s founder, Bill McKibben said the move was a reminder “that morality demands thinking as much about the future as about ourselves – and that there’s no threat to the future greater than the unchecked burning of fossil fuels.” (Edie)
Policy
Executive pay 162 times that of the average worker
The pay of UK bosses is now at 162 times that of the average worker as a result of an average 15% pay rise for top executives. The High Pay Centre, a think tank, has called on the UK government to impose a cap on executive pay that is set at a multiple of the earnings of their lowest-paid employees. Legislation introduced last year requires a firm’s remuneration package to have the support of 50% of shareholders in order to pass. Despite shareholders being given the power to vote down executive pay packets, the average FTSE 100 chief executive took home £4.7m last year, as against £4.1m in 2012. The average pay in the UK is £26,500 and 80% of new jobs are in in sectors averaging under £16,640 annually. The High Pay Centre said that the increasing gap is leading to a reduced trust in business, creating the perception that a small elite were keeping all the rewards of recent economic growth. (The Independent)
Limits to payday loan charges set to be introduced
The Financial Conduct Authority (FCA), the UK financial watchdog, is set to unveil the level and structure of limits to the charges payday lenders can impose. The cap, announced last year, will take effect at the beginning of next year. The cap is expected to limit charges by payday lenders at around £30 for every £100 borrowed. It is expected that the cap will force many payday lenders out of the market as, in combination with tougher regulation, the industry becomes less profitable: the Consumer Finance Association, an industry body, expects the market to shrink by around 50%. The cap is well-supported by MPs and campaign organisations who criticise the payday loans industry for forcing those already in precipitous financial situations into further difficulties. Last month the UK competition watchdog, in its investigations into the payday loan market, estimated that the current lack of price competition was leading to consumers typically overpaying £10 for every £260 they borrowed. (Financial Times*)
Corporate Reputation
Ombudsman receives record number of complaints about energy bills
The number of customers complaining to the independent ombudsman about their energy bills has, in the first six months of 2014, reached the total level of complaints made last year. Official complaints reached 22,671 in the first six months of 2014: the 2013 total was 17,960. The ombudsman deals with disputes that have been unresolved after eight weeks or more. 84% of complaints were billing-related issues whilst the second largest cause of complaints (13%) were related to issues of switching from one provider to another. The figures come a week after Citizens Advice and Citizens Advice Scotland said complaints about npower and Scottish Power had doubled in the first three months of 2014. Lewis Shand Smith, chief energy ombudsman attributed the increase in complaints to “the rising cost of living, but also as a result of consumers becoming more aware of their rights and feeling more empowered to act and fight for a fair deal.” (The Guardian)
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