The world’s biggest companies disclose little or no financial details about their operations outside their home countries, watchdog Transparency International (TI) said in a report that ranks 124 firms. The watchdog warned that the biggest oil, gas and mining companies are not ready for new EU rules that will come into force from July requiring extractive companies to report payments to governments on a country-by-country and project-by-project basis. Ninety of the world’s 124 largest publicly traded companies do not disclose the taxes they pay in foreign countries, while 54 disclose no information on their revenues in other countries, TI said. Top performers on transparency are Italian energy group Eni, Britain’s Vodafone and Norway’s Statoil. The bottom three were China’s Bank of Communications, Japanese carmarker Honda and Bank of China. TI’s chairman, Jose Ugaz commented: “With great economic power comes greater responsibility. By not responding to people’s demands for greater transparency, companies risk their brands and losing customers”. (Guardian)
Strategy
Companies that care about climate change make more money
S&P 500 firms that disclose their environmental data and set strong carbon reduction goals had higher profitability, stability, and returns to shareholders than peers, claims a new report by CDP (formerly the Carbon Disclosure Project). The report, which tracked S&P 500 companies over three years, found that organizations that are planning for climate change – by disclosing their environmental data, putting in climate change risk management policies, generating strong greenhouse gas emissions reductions goals, and so on – have an 18% higher return on equity (ROE) than their peers, and a 67% higher ROE than companies that don’t disclose climate change-related actions. These climate change-aware companies also have had 50% lower volatility in earnings over the last 10 years and 21% strong dividends to shareholders than companies with less transparency. Top performers include Apple, Best Buy, Estee Lauder, Bank of America and UBS. (Fast Company)
Diversity
Report sets goal of more women in boardrooms of FTSE 100 firms
More needs to be done to increase the pipeline of women being prepared for top jobs at Britain’s biggest companies, according to the authors of a government-endorsed report into diversity in the boardrooms of stockmarket-listed companies. While FTSE 100 companies are on track to achieve the goal set by Lord Davies for 25% of boardroom seats to be held by women by 2015, this has come mainly through a rise in the number of non-executive directors rather than full-time directors involved in the day-to-day running of companies. The report builds on data published last month showing that six out 10 companies still do not meet the 25% target, even though the average proportion of female directors across the FTSE 100 is 22.8%. 24 boardroom positions need to be given to women if FTSE 100 companies are to achieve the overall goal in time. The authors set out five action points for those at the helm of listed companies, including calling for one in three new directorships to go to a female candidate. (Guardian)
Reporting
Companies can do more than Excel with CSR data
US companies are tracking sustainability data more than ever before, but the software tools they use are subpar, according to Columbia University’s ReScore Project Group. The study was conducted in collaboration with Tennaxia, a cloud-based CSR software platform, and consulting firms 2020 Strategies and The Triana Group. Findings indicate that more than half of the 50 US organisation surveyed reported using Microsoft Excel spreadsheets to track CSR data, while only 29 percent use data management software specifically designed for CSR purposes. While managers typically perceive Excel as the low-cost option for tracking CSR data, study authors conclude that relying on basic spreadsheet software will actually cost more annually in staff time, inefficient workflows and errors. A major issue with using Excel as the default tracking tool is that data is often of inconsistent quality and difficult to audit, explained Ryan Mullen, a Senior Associate in PwC‘s Sustainable Business Solutions practice and a participant in the study. Software tools designed specifically for CSR data typically generate “more auditable records,” he said. (Sustainable Brands)
Renewable Energy
Global study shows clean energy activity surges in developing world
Developing nations represent a large and rapidly growing share of the world’s clean energy investment, according to Climatescope 2014, a recently-released landmark study. The results suggest renewable technologies can be just as cost-competitive in emerging parts of the world as they are in richer nations. The report offers the clearest picture yet of clean energy in 55 emerging markets in Africa, Asia and Latin America and the Caribbean. The findings show clean energy capacity added in these nations grew at a faster pace than in developed countries, more than doubling in the past five years and totalling 142 GW – more than France’s current capacity. China received the highest ranking as the largest manufacturer of wind and solar equipment in the world, followed by Brazil, as well as the largest demand market for such equipment. South Africa, Kenya and Uganda were among the top scorers, all having notable energy projects and products in place. The report also points to increasingly stronger policies that attract more clean energy investment. (Eco Business)
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