CORPORATE REPUTATION

HSBC suspends head of responsible investing for calling climate crisis ‘shrill’

Financial services company HSBC has suspended its head of responsible investing after he referred to the climate crisis warnings as “unsubstantiated” and “shrill” in a conference speech. Stuart Kirk will face an internal investigation. During a presentation entitled “why investors need not worry about climate risk”, Kirk made light of major flooding risks and complained about having to spend time “looking into something that’s going to happen in 20 or 30 years”. While many voiced concerns at Kirk’s speech, some industry executives argued the speech highlighted the danger of ESG investing becoming a “bureaucratic tax” where “ESG executives are paid on PR statements” rather than on impactful results. Climate activists welcomed Kirk’s suspension but said HSBC had questions to answer about the extent to which Kirk’s views were known or supported within the bank. (The Guardian; Financial Times*)

DEFORESTATION

$80 billion at risk in forest supply chains due to lack of deforestation policies

Environmental impact NGO CDP has expressed concern that just 36% of the 675 companies that have disclosed environmental data have publicly announced no-deforestation or no-ecosystem conversion policies. In its ‘Global Forests Report’, CDP found that only 13% of listed targets aligned with good practice. However, the report reveals some positive trends towards supplier engagement on deforestation. Two-thirds of companies are engaging with their tier one suppliers to manage and mitigate deforestation risk, while half of all traders, manufacturers and retailers are also engaging with indirect suppliers. Despite this, almost 4 in 10 of scoped companies report having no information about origins for at least half of their commodity volumes. Additionally, almost 3 in 10 report having no traceability system for at least one commodity that they source. (edie)

ETHICAL BUSINESS

Glencore to plead guilty to bribery charges and pay a total $1.5 billion penalty

Commodity and mining company Glencore will plead guilty to multiple counts of bribery and market manipulation and pay penalties of up to $1.5 billion following coordinated investigations that uncovered corruption. The UK Serious Fraud Office (SFO) charged the group’s subsidiary Glencore Energy UK with seven cases of profit-driven bribery and corruption in connection to oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan. In a statement, the SFO said that “Glencore agents and employees paid bribes worth over $25 million for preferential access to oil, with approval by the company”. In the US, Glencore pleaded guilty in two separate criminal cases and agreed to pay approximately $1.1 billion in criminal fines and forfeiture. Prosecutors described a decade-long bribery scheme and oil price manipulation scheme. (Financial Times)*

TAX

Global multinational tax deal delayed until 2024 over ‘difficult decisions’

An international deal that would force the world’s biggest multinational companies to pay a standardised share of tax has been delayed until 2024. The secretary-general of the OECD, Mathias Cormann, told the World Economic Forum that there were “difficult decisions” taking place that meant the deal could not come into force in 2023, as previously hoped. Cormann said he remained confident an agreement would eventually be implemented to let countries levy a harmonised tax on the world’s largest firms based on the sales generated within their borders. The deal has two parts: Pillar 1, which involves the reallocation of some profits from major multinationals such as US tech companies to countries where they made their sales, and Pillar 2, which brings in a global minimum corporation tax rate of 15%. (The Guardian)

STRATEGY

Asia Pulp & Paper eyes 2060 net-zero goal aligned with Paris Agreement

Indonesian pulpwood giant Asia Pulp and Paper (APP) has said that it intends to reduce its greenhouse gas (GHG) emissions to net-zero in support of climate action and can do so while expanding its operations. APP said it aimed to achieve net-zero emissions by 2060, in line with the Indonesian government’s own carbon reduction target. APP said it is looking into setting a science-based target, which would align emissions reductions with the Paris Agreement. APP’s carbon footprint is subject to debate, as the company does not include GHGs released from its operations on carbon-rich peatlands. More than half of APP’s 1.2 million hectares of plantations are on peat soil, which is vulnerable to smoggy fires that have dogged the region with toxic haze air pollution for decades. (Eco-Business)

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