Africa losing billions from fraud and tax avoidance
Africa is losing more than $50 billion every year in illicit financial outflows as governments and multinational companies engage in fraudulent schemes aimed at avoiding tax payments to some of the world’s poorest countries, impeding development projects and denying poor people access to crucial services. Illegal transfers from African countries have tripled since 2001, according to a report released by the African Union’s high-level panel on illicit financial flows and the UN Economic Commission for Africa. In total, the continent lost about $850 billion between 1970 and 2008, according to the report, which calls for the UN to crack down on European and US firms that engage in tax avoidance and money laundering. Joseph Stead, senior economic justice adviser at Christian Aid, said: “This is the first time that African countries have spoken out so strongly and in unison about how these financial crimes are hurting their people. That is a big deal.” (The Guardian)
Obama plans tax on US firms overseas to fix roads at home
US President Barack Obama plans to close a tax loophole that allows US firms to avoid paying taxes on overseas profits. His 2016 budget would impose a one-off 14% tax on US profits held overseas, as well as a 19% tax on any future profits as they are earned. The White House said its plans for an immediate 14% tax would raise $238 billion, and would increase US GDP by about 1.5% if it was used to fund new infrastructure including road, bridge and public transport upgrades. But analysts say it is unlikely the Republican-controlled Congress will approve the proposals. Research firm Audit Analytics calculated last April that US firms in total had $2.1 trillion-worth of profits stashed abroad. US conglomerate General Electric had the most profit stored overseas at $110 billion, while tech giants Microsoft and Apple and drugs companies Pfizer and Merck all featured in the top five. (BBC News; The Guardian)
Collaboration
SABMiller and the Royal Society partner to advance sustainability expertise across Africa
Last week saw the launch of a new initiative that will offer 15 post-graduate scientists from nations across Africa the opportunity to work with UK academic institutions in subject areas such as water management, sustainable farming, energy and waste. The exchange programme is a collaboration between one of the UK’s leading science establishments, the Royal Society, and the multinational brewer SABMiller. Africa is an important market for SABMiller, making up 30 percent of the company’s annual profit. However, it also presents a considerable challenge for the company, since the production of beer requires significant quantities of clean water and prime farmland. SABMiller is working with the Royal Society both to safeguard its operations in Africa in the short-term, and work towards a longer-term form of resilience, contributing financial and technical resources to help advance sustainability in general. (Sustainable Brands)
Responsible Investment
UBS and M&G ‘worst performers’ on responsible investment
UBS Global Asset Management and M&G have been named among the UK’s worst-performing fund houses in terms of transparency and responsible investment by ShareAction, the investor rights charity. ShareAction ranked the 33 largest asset managers in the UK by examining to what extent they meet the responsible investment and transparency criteria set out by the UK’s Stewardship Code, to which all 33 have signed up. More than a third did not disclose their conflicts of interest policy, despite the fact that this is one of the main requirements of the code. Catherine Howarth, chief executive of ShareAction, said: “Our survey blows the cover on a wide range of big names in asset management who still refuse to be transparent about how they invest clients’ money.” Meanwhile the top-ranked asset managers were Threadneedle, Aviva Investors and Jupiter. (Financial Times*)
Energy
MillerCoors completes 10,000 panel solar array
US brewer MillerCoors, has completed a 3.2MW capacity solar panel installation at its Irwindale brewery in California. The brewery has worked with SolarCity to develop the installation which broke ground in October 2014. The installation has the capacity to supply more than 40% of the site’s energy demand, which has been reduced by 30% over the past five years. Tom Long, MillerCoors CEO said: “We are acutely aware of the energy stress on this community, so we are doing our share – plus some – to decrease usage by installing this solar array. This step toward brewing more sustainably makes us a better brewer and a better neighbour to the residents of Los Angeles County.” The array will produce enough energy to brew more than seven million cases of beer annually. It is also claimed the on-site installation will save nearly 675 million gallons of water over 30 years. (2degrees)
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