HUMAN RIGHTS

US ban on cotton from Xinjiang, China comes into force

The fashion industry has been told it must wean itself off cotton from China’s Xinjiang region, as a new law comes into force giving US border authorities greater powers to block or seize goods linked to forced labour in China. The ‘Uyghur Forced Labor Prevention Act’ (UFLPA), assumes that any product partly or wholly made in Xinjiang is linked to the region’s labour camps. The fashion industry will be particularly affected, with an estimated 20% of the world’s cotton coming from China, of which 84% comes from Xinjiang. The UFLPA has designated cotton a “high priority for enforcement”. Any UK or EU fashion brand exporting to the US will also be subject to the new law, and failure to provide adequate certification or supply-chain details may result in fines up to $250,000. (The Guardian)

SUSTAINABLE INVESTMENT

UK pensions required to disclose 1.5°C investment alignment

UK pension fund schemes will be required to report on the alignment of their investments with the Paris Agreement target to limit warming to 1.5°C. The measures introduced by the Department for Works and Pensions (DWP) mark the next step towards climate transparency requirements for pension schemes, following legislation in 2021 mandating the publication of Task Force on Climate-related Financial Disclosures (TCFD). The DWP’s TCFD requirements initially applied to pension schemes with assets greater than £5 billion and expanding to £1 billion schemes later in 2022. Accordingly, the new rules will apply to funds representing more than 80% of UK pension schemes by October. The DWP said it is “seeking to align with the TCFD’s updated guidance in this area and codify such a requirement for UK occupational pension schemes”. (ESG Today)

CONSUMERS

New UK regulation proposed for buy now pay later schemes

Rules on so-called buy now pay later (BNPL) loans will be tightened, including new guidelines on advertising and checks to ensure customers can afford to pay. Technology company Apple recently announced plans to launch a BNPL option for Apple Pay users. However, critics say BNPL schemes encourage consumers to spend beyond their means. The loans, used by 15 million people in the UK in 2021, are typically spread over a series of payments. The new UK government regulations will see lenders be required to carry out checks to ensure loans are affordable for consumers, ensure advertising practices are fair and not misleading, will require lenders to be approved by the Financial Conduct Authority, and enable borrowers to take complaints about BNPL schemes to the Financial Ombudsman Service. (BBC News)

TECHNOLOGY & INNOVATION

Blockchain scheme launched for business flights

A new blockchain-enabled service that enables businesses to purchase sustainable aviation fuel (SAF) has been spearheaded by Shell, Accenture and American Express Global Business Travel (Amex GBT). Called Avelia, the scheme is offering one million gallons of SAF in the first instance. This amount of fuel could cover 15,000 individual business traveller flights from London to New York. There are many business flight schemes through which customers can either offset the emissions related to their tickets or purchase SAF, but this is the first of its scale to utilise blockchain. Business customers will be able to book flights through Amex GBT and request verification that SAF has been produced and supplied. Verification will be provided in the form of blockchain-generated tokens, which have a tamper-proof audit trail. (edie)

GOVERNANCE

UK Institute of Directors pushes for voluntary code of conduct

Professional leadership organisation, the Institute of Directors (IoD), has proposed a voluntary nine-point code covering ethics, diversity, competence and lawfulness. The code of conduct has been recommended to improve behaviour in boardrooms after high-profile collapses such as the builder Carilion and the retailer BHS. The code would also include a commitment to cut a company’s carbon footprint in reasonable time. The plan would supplement the existing corporate governance code administered by regulator, the Financial Reporting Council (FRC), and general legal duties under UK company law. The IoD has asked the business ministry and FRC to support the development of the code. The IoD said directors should agree to submit to any accountability processes associated with the code and signatories could be listed on a register. (Reuters)

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