Accounting scandals prompt KPMG ban on non-audit work
KPMG informed its 625 UK partners on Thursday that is to cease undertaking non-audit work for the 90 FTSE-350 companies whose accounts it supervises, becoming the first of the ‘big four’ firms to make such a pledge following the scandals surrounding the collapse of Carillion and BHS. As the auditor to Carillion, KPMG is facing intense scrutiny for its oversight of the construction giant, which went bust in January with debts of more than £5bn. At the retailer BHS, PwC has been accused of failing to conduct sufficient oversight of its accounts at a time when it was earning significant sums from non-audit work. The Financial Reporting Sector (FRC) said that it was working to decide “whether further actions are needed to prevent auditor independence being compromised, including whether all consulting work for bodies they audit should be banned”. (Sky News)
Campaigns
Iceland’s Christmas TV ad banned for being too political
Iceland, the UK food retailer, has had its Christmas campaign banned from TV because it has been deemed to breach political advertising rules. As part of its festive campaign the discount supermarket struck a deal to relaunch an animated short film created by the Greenpeace, featuring an orangutan and the destruction of its rainforest habitat by palm oil growers. Clearcast, the body responsible for vetting ads, said it was in breach of rules laid down by the 2003 Communications Act, which demand that an ad is prohibited if it is “directed towards a political end”. Earlier this year, Iceland became the first major UK supermarket to pledge to remove palm oil from all its own-brand foods. Richard Walker, the founder of Iceland’s son stated: “We have said repeatedly we are not anti-palm oil, we are anti-deforestation. We think this is a huge story that needs to be told.” (Guardian)
Construction of Keystone XL Pipeline blocked by US judge
A federal US judge has blocked construction of the controversial Keystone XL oil pipeline, connecting Canada’s oil sands to US refineries, stating that the US government had not completed a full environmental analysis. The ruling against of project is a victory for environmental and indigenous rights groups who have campaigned against the 2,000km pipeline, but creates a major setback for TransCanada, which may have to delay the construction of the $8bn pipeline. US District Court Judge Brian Morris overturned the Trump Administration’s permit for starting construction following a lawsuit filed by environmental groups against the US government. He said the administration’s analysis had not fully considered the impact of greenhouse gas emissions and oil spills, or the economic viability of Keystone XL. He stated the Trump administration had “discarded prior factual findings related to climate change to support its course reversal.” (Financial News)*
Supply Chain
UK MPs call on online retailers to explain impact of fast fashion
UK MPs on the Environmental Audit Committee (EAC) disclosed today that they have written to the bosses of major e-tailers demanding more detail on their sustainability practices. The EAC said it has written to Amazon, Asos, Boohoo, PrettyLittleThing, and Misguided requesting more information on each firm’s CSR policy, including details on the life-cycle of their garments and the environmental impact of their businesses. The move is part of an ongoing investigation by the Committee into the UK’s booming ‘fast fashion’ industry, which is swiftly becoming a major contributor to UK waste and carbon emissions. In the letters EAC Chair Mary Creagh said the Committee has heard “shocking evidence” this week suggesting online fashion retailers are forcing clothing manufacturers to pay “illegally low wages” and promoting a business model that results in “excessive waste”. (Business Green)
Innovation
Global shipping industry executives form Blockchain consortium
Nine ocean carriers and terminal operators plan to create a new blockchain-based platform for the global shipping industry supply chain. Called the Global Shipping Business Network (GSBN), the digital platform aims to connect stakeholders throughout the industry, by enabling secure transmission of data and improving transparency. Ocean carriers like CMA CGM and Evergreen Marine, along with terminal operators like DP World and Shanghai International Port are collaborating with software company CargoSmart on the platform. In the container shipping industry, uncoordinated processes can result in disruptive information gaps, the forum stated. To address this, the GBSN intends to offer a forum for collaboration and standards for sharing shipping documents and data. “The GSBN blockchain consortium has the potential to enable faster, more accurate processing of cargo information and more transparency of terminal operations to cargo owners,” said Yan Jun, president of Shanghai International Port. (Environmental Leader)
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