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All the latest research and data, analysed and distilled
Time for insurers to wake up to climate change
Insurers should be paying more attention to the risks posed by climate change, Lloyd’s of London warns. In a new report, the insurance market gives particular attention to the probability of severe flash floods, which could increase by 40% towards the end of this century. Peak river flows could also rise by 10% by 2015, and 30% by 2080. The report, Catastrophe Modelling & Climate Change, draws heavily on the latest conclusions of the Intergovernmental Panel on Climate Change, which talks of “surprising or irreversible” impacts of global warming.
Sustainable supply chains a priority
Supply chain management is becoming an increasing priority, a new study by professional services firm PwC and the Apics Foundation finds. More than three-quarters of operations professionals say their companies will increase their focus on supply chain sustainability over the next three years. More than two-fifths of these reveal they are motivated by cost reduction, while around one-third report environmental improvements as their main driver.
Despite this, however, only 30% of managers say their companies have a comprehensive sustainability strategy for supply chain issues. Among the chief barriers to action are lack of measurable targets and misaligned employee incentives, operations professionals say.
US companies feeling climate change impacts
Nearly half of the largest companies in the US are already seeing the impacts of climate change, or expect to see them within five years, a survey by the Carbon Disclosure Project finds. The survey of companies listed in the Standard & Poor’s 500 Index reveals a substantial rise on 2011, when only 26% of S&P500 firms reported being affected.
The companies also say that half of the climate risks identified are “more likely than not” or “virtually certain” to affect their business, up from 34% in 2011. The majority of disclosed physical risk exposures are direct to operations (68%), with the bulk of the remainder relating to clients and suppliers. The chief impacts run from droughts and cyclones, through natural resource shortages, to uncertainty of physical risks and sea level rises.
Female representation increases among UK large manufacturers
One in five directorships at FTSE 100 manufacturing firms are now held by women, research by the manufacturers’ organisation EEF reveals. The Women in Manufacturing report finds that women occupy 64 of the 305 board positions in the 28 manufacturing firms listed in the FTSE 100. In addition, women hold at least one quarter of the posts on the boards of 36% of the listed manufacturing firms. EEF is using the findings to argue against government calls for a mandatory quota for female board representation.
Ice loss worse than thought in Antarctica
Antarctica lost ice between 2010 and 2013 at twice the rate it did during the previous five years. During the three-year period, about 160bn tonnes annually melted into the sea. According to satellite data collected by NASA and published in the Geophysical Research Letters, the majority of the losses occurred in the west Antarctic, the most vulnerable of Antarctica’s three regions. The hard-hit region saw 134bn tonnes of ice disappear in the period under investigation. Overall, the losses detected could raise global sea levels by 0.45 millimetres each year.
Peer-to-peer finance on the increase
The market for collaborative banking could be set to explode as consumers grow increasingly dissatisfied with conventional financial institutions. According to research by US-based venture capital firm Foundation Capital, the so-called “peer-to-peer industry” could be worth $1tn within ten years.
Driving the shift are young, tech-savvy adults. One in three young people believe they won’t need a high-street bank at all, claims research cited in the report. Half of young people, meanwhile, believe tech start-ups will challenge mainstream consumer banks to radically revise their way of working. In the UK, the peer-to-peer finance providers were worth £843m in 2013, more than double their 2012 value of £381m.
SRI taking off in Germany, Switzerland and Austria
The total market for social responsible investment in Germany, Austria and Switzerland now amounts to €134.5bn. Austria is growing the fastest, with funds under some kind of social, environmental or governance screen up by 29% on last year. Its neighbours both clocked increases of 17%. Institutional investors – especially corporate pension funds – are driving the ethical investment market in all three countries, although private investors are showing increasing interest too. More than two-fifths of the Swiss market, for example, is now held by private investors. The proportion drops to 25% and 14% in Germany and Austria, respectively.
Africa’s economic projections buoyant
Africa’s economic growth is projected to hit 4.8% in 2014, increasing to between 5% and 6% in 2015, according to the United Nations Development Programme. The UNDP’s African Economic Outlook predicts west Africa will have the fastest growing economy of any region in the continent next year, at 7.2%. At the bottom of the growth pile is north Africa, with an anticipated GDP rise of 3.1%.
The report notes that Africa’s exports, driven by strong commodity prices, grew faster than any other region in the world in 2012, at 6.1%. According to the UN body, Africa’s economic growth is translating into tangible advances in health, education and poverty reduction. Currently, 15 countries qualify as “medium”, “high” or “very high” in terms of human development.
Private equity needs to look south
Only one-tenth of private equity finance finds its way into emerging markets every year, research by the International Finance Corporation finds. The private sector lending arm of the World Bank, which has a portfolio of about $4bn in more than 200 private equity funds, estimates that emerging markets annually receive about $200bn in private equity investments.
Where these monies are invested, jobs and economic growth follow, the IFC claims. It cites its own private equity investment, which it maintains generated 300,000 new jobs between 2000 and 2011. The average rate of job growth for companies in which the IFC invested during this period exceeded 15%.
New parents fare well during economic recession
The 2008 banking crisis and subsequent global recession hit per capita incomes and job security hard. However, research from the International Labour Organisation indicates that new parents in work came out well during this period. A new report by the ILO finds that many countries raised the level of support to families during the crisis.
Australia, France, Germany, Norway, Poland and Slovakia are among those that increased access to early childhood education and care, extended tax credits, and improved maternity and paternity leave, among other measures. China is another. The world’s most populous country extended maternity leave from 90 to 98 days in 2011. Chile, meanwhile, shifted postnatal parental leave for women from 18 to 30 weeks. In 2013, fathers in Australia won the right to 14 days of paternity leave.
Nike decouples revenue rise from carbon emissions
Nike has cracked the decoupled growth challenge, its newest Sustainable Business Performance Summary suggests. The US sports and apparel brand saw revenues increase by 26% between 2012 and 2013, yet carbon emissions dropped by 2.8% across the company’s whole value chain (using a 2011 baseline). Meanwhile, carbon emissions per unit in inbound transportation fell by 29%, along with a 17% decrease in emissions per unit in its footwear manufacturing operations.
The company also reports that four in ten of participating contract footwear factories met the minimum requirements of its internal energy and carbon standards, representing 72% of the brand’s footwear volume. Nike has a target of cutting its emissions per unit of production by 20% by 2015 (against a 2011 baseline).
McDonald’s spells out new 2020 targets
McDonald’s has committed to buy 100% of its coffee, palm oil and fish from sources verified as sustainable by 2020. Among other new targets set by the US restaurant chain is a 50% increase in in-store recycling and the use of 100% recyclable or sustainably certified fibre-based packaging. The commitments appear in McDonald’s 2012-2013 CSR and Sustainability Report.
The report’s highlights include news that the restaurant chain now sources all its whitefish from fisheries that are verified as sustainable. McDonald’s also reveals that 90% of its restaurants now recycle used cooking oil and about 77% recycle corrugated cardboard. Between franchises, affiliates and restaurants with developmental licences, more than 35,000 restaurants now carry the iconic brand of the US firm. McDonald’s revenues topped $28bn last year, with Europe (40%) and the US (31%) representing the lion’s share.
Kellogg charitable donations top $60m
US food company Kellogg donated 400m servings of food in 2013 to children and families in need. Of these, 230m were breakfasts. The donations form part of the US firm’s Breakfast for Better Days programme, which seeks to give away 1bn servings of cereal and snacks by the end of 2016. In total, Kellogg’s charitable donations reached $47.6m in food during 2013. It donated a further $13.4m in cash to a variety of charities. The Michigan-based firm, which counts more than 1,600 foods in its product portfolio, posted revenues of $14.8bn in 2013.African economy Antarctica climate change effects collaborative banking CR Cheat Sheet Lloyd's supply chain management