Hundreds of companies accused of secret Luxembourg tax deals
The list of multinational businesses accused of using European jurisdictions to cut their tax bills grew much longer this week, following findings by the International Consortium of Investigate Journalists (ICIJ) accusing more than 300 companies, including PepsiCo, Ikea and FedEx, of benefiting from preferential deals with the government of Luxembourg. The findings could make awkward reading for Jean-Claude Juncker, the former prime minister of Luxembourg, who took office on Saturday as the president of the European Commission. The Commission has already begun a similar investigation into companies including Amazon, Apple and Starbucks and a unit of Fiat. The ICIJ said the documents it has obtained involve deals negotiated by accounting firm PwC on behalf of hundreds of corporate clients. “It’s unclear whether any of these documents are among those still being sought by EU investigators,” the consortium wrote, “but they are the kinds of documents that go to the heart of the EU’s investigation into Luxembourg’s tax rulings.” (New York Times)
Environment
Water shortage threatens growth for world’s biggest firms
More than two thirds of the world’s largest corporations say water scarcity could harm their business, according to the latest global water report from nonprofit CDP, which surveyed 174 companies listed in the FTSE Global 500 Equity Index. The burgeoning crisis has prompted a response from many of the surveyed companies, with 82 percent of respondents setting goals and targets this year. Over 75 percent believed that water preservation strategies could offer operational, strategic and marketing opportunities. Companies most exposed to water risk are also the most prepared to invest in technological improvements. Since 2011, Coca Cola has invested more than $1 billion in wastewater treatment. However, despite these positive actions, disclosure levels of the Global 500 have not kept up with investor demand for information. 42 percent of the companies requested by investors to divulge information related to their water risks failed to do so, with Nike and Exxon Mobil being the most persistent non-disclosing companies identified as having potentially the greatest impact on water resources. (Edie)
Supply Chain
Levi’s launches cheap financing for more ethical factories
In an attempt to bolster its ethical credentials and meet increasing consumer demands, Levi Strauss & Co is offering a new financial incentive to suppliers as far away as Bangladesh and China to meet environmental, labour and safety standards. The denim company said it would begin providing lower-cost working capital to those of its 550 suppliers who perform best on these measures. The financing, arranged with the International Finance Corporation (IFC), will operate on a sliding scale, whereby suppliers are rewarded with lower interest rates on working capital as they improve employee conditions and environmental performance. The move is a response to increasing consumer anxiety over the conditions under which clothes are made, which pressures brands to ensure their suppliers abide to higher standards. The combination of these pressures and the increasing intricacy of global supply chains is leading multinational companies to build tighter bonds with suppliers and to use new tools to manage them. (FT*)
Innovation & Technology
UK Businesses handed £14m to develop carbon-cutting products
A £14 million fund has been launched to facilitate UK businesses develop new products and technologies designed to lead the fight against climate change. Business Secretary Vince Cable unveiled this week the dedicated clean tech fund, on the same day the government promised £50 million for the development of emerging technologies such as energy efficient computing. The latest fund is expected to promote products that reduce carbon emissions, improve energy security and reduce energy costs, helping the UK meet its future energy needs in an environmentally-friendly way. “We are facing a trilemma”, the Business Secretary said. “As well as reducing emissions and improving energy security, we need to reduce costs for energy users. Governments have their role to play, but we also need there to be investment by businesses in innovation to develop new products and technologies. We are making £14m available to encourage that investment and make sure that British companies have help to tackle this challenge.” (Business Green)
Renewable Energy
Official figures show outstanding October for UK wind energy
New figures released by the National Grid for October, revealed that wind generated more power than nuclear, supplying an average of more than 12 percent of electricity demand during the month and further contributing to the UK’s clean energy mix. Wind energy hit a record high on October 20th, providing a 24% of the UK’s electricity needs, beating the previous record of 22 percent set in August. RenewableUK’s Director of External Affairs, Jennifer Webber, said: “These figures shine a light on the full extent of wind’s powerful performance over October; to beat nuclear for seven days straight and 11 days overall in a month, is unprecedented. We saw August set new records for generation and October has followed hot in its heels”. The figures come as analysis by WWF showed Scotland’s wind turbines produced the equivalent of 126 percent of the power needs of every home last month. (RenewableUK; Business Green)
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