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Unethical behaviour costs corporates dear
Companies in the US and UK have wasted about $150-$200bn through unethical and irresponsible behaviour since 2009, according to “conservative” estimates by Ecclesiastical Investment Management (EIM). The figure equates to about 15% of global dividends, which totalled $1.1tn in 2013. The financial sector is singled out in the report as particularly dishonest. EIM notes that 6,000 bankers have been sacked or suspended since 2006 for ethical misdemeanours. The Payment Protection Insurance (PPI) scandal alone cost UK banks £22bn. Another poorly performing sector highlighted in the report is the pharmaceutical industry, which has seen an estimated 15% of its global revenues lost due to corporate misconduct since 2009. Price fixing emerges as a key concern in a number of industries. The report cites tech firms Samsung, Philips, LG and Panasonic, which were fined €1.4bn by the European Commission for cartel price fixing. A global probe into price fixing in the automotive supply sector, meanwhile, saw 26 companies fined a total of $2bn.
McKinsey probes motivations for sustainability
Alignment with a company’s mission and values is the main reason corporate executives prioritise sustainability, according to a survey by consultancy firm McKinsey. More than two-fifths of the 2,904 executives interviewed chose this specific motivation from a list of 12 possibilities. Building or maintaining reputation was referenced by around one third of interviewees, while cost cutting received a nod from around one quarter. In general, chief executives (36%) are fractionally more likely to assign strategic importance to sustainability than other senior executives (32%). Motivations vary from sector to sector as well. Respondents in the manufacturing industry are most likely to cite consumer communications as a major driver (70%) in their reputation management approaches. In contrast, extractive companies put the highest priority on community investments (76%) and external reporting (74%).
Carbon tax finds favour in US
Three in five Americans would back a carbon tax on the condition that the subsequent revenues were spent on renewable energy, development or another “worthy cause”. A survey by the University of Michigan and Muhlenberg College shows that support for a fossil fuel tax drops to around one third when the destination of revenues is not revealed. That said, the positive response to the proposed tax is even lower – 29% – when the researchers suggested that revenues would go towards raising energy prices.
Circular economy worth $15bn
Global revenues from the leading five sectors of the circular economy amount to about $15bn, according to a new study by professional services firm PwC. The study anticipates that the sector’s chief growth areas – peer-to-peer finance, online staffing, peer-to-peer accommodation, car sharing and music/video streaming – could increase more than twenty-fold to $335bn by 2025.
Airlines won’t hit carbon target through fuel efficiency alone
Fuel efficiency improvements alone will not halt the impact of aviation-related greenhouse gas emissions, a study from the University of Southampton finds. Air travel is expected to be 70% higher than 2005 levels by 2020. The International Civil Aviation Organisation is calling for an improvement in fuel efficiency of 2% per year between now and 2050. In an attempt to reduce overall demand, the study’s authors recommend a 1.4% increase in ticket prices. The cost of air travel dropped by 0.5% per year between 1990 and 2012. Greenhouse gas emissions from planes, which include nitrous oxides and ozone, have an impact on global warming around 2.7 times higher than that caused by their carbon dioxide emissions alone.
Direct Carbon Emissions from Civil Aircraft
UNDP report highlights persistent developmental disparities
Norway, Finland and the Czech Republic boast the lowest levels of inequality, according to the UN Development Programme’s Inequality-Adjusted Human Development Index. Yet the general trend highlighted by the index, which covers 145 countries, is one of persistent disparities in most nations. The division between rich and poor is widest in Latin America and the Caribbean region, while South Asia, the Arab States and Sub-Saharan Africa score the lowest for educational equality. The inequality survey appears in the latest issue of the UNDP’s Human Development Index.
The UNDP’s annual report also contains a new Gender Development Index (GDI). In only 16 of the 148 countries surveyed do key development figures (such as access to health, education levels, life expectancy and so on) score equal or higher for women than men. The list of gender equal nations includes Finland, Lithuania, Poland and Russia. Afghanistan is the most unequal country in gender terms, with development scores for women 40% lower than those for men. Across all countries, meanwhile, men enjoy more than double the income of women on the basis of gross national income per capita.
Finally, the UNDP’s Multidimensional Poverty Index shows that about 1.5 billion people in the 91 developing countries surveyed remain “multidimensionally poor”. A further 800 million or so risk falling into poverty. South Asia is the worst performer, with 71% of its population either poor (800 million people) or “near poor” (270 million).
World set to need “more than four planets”
The global population consumes 50% more in natural resources than the Earth is able to regenerate, a new report by the business-backed World Economic Forum reveals. And the world’s wealthy nations are primarily to blame. The richest 1.1 billion people on the planet are responsible for 78% of total consumption. Demographers estimate that another 3 billion people could be added to the ranks of middle-class consumers over the next few decades. If consumption patterns remain constant, more than four planets will be needed to supply the consequent demand for goods and services, the WEF report concludes.
GRI reports boost in external assurance
Nearly half (45%) of the 2,313 sustainability reports published in 2013 in line with the Global Reporting Initiative (GRI) framework were externally assured, up from 38% in 2011. Listed companies lead the list, comprising 89% of externally assured reporters, a new study by GRI finds. US companies are comparatively reluctant to assure their non-financial reports, with only 16% of GRI-compliant reporters adopting such a measure. Non-financial corporate transparency is generally on the rise, meanwhile. As of 2013, 93% of the world’s largest 250 companies (G250) issue a corporate responsibility report, 82% of which refer to the GRI.
Demands outstrips supply for certified palm oil
The increase in demand for palm oil certified by the Roundtable for Sustainable Palm Oil is outpacing the rise in supply for the first time. This milestone follows a surge in certified palm oil sales in the first half of this year. Purchases of so-called “identity preserved”, “segregated” and “mass balance” certified palm oil hit 1.12m tonnes between January and June 2014, up 65% on the same period last year. On the supply side, total production of certified sustainable palm oil stood at 5.3m tonnes at the end of June 2014, a 29% increase compared to the first half of 2013. An estimated 16% of palm oil grown globally is certified as sustainable. RSPO’s latest data indicates that 4.16m tonnes of certified palm oil is sold in the mainstream market without an associated premium.
Merck’s health interventions benefit 342 million people
US-headquartered pharmaceutical firm Merck’s portfolio of drugs tackles 88% of the top causes for disease and illness, up from 55% in 2012. The list covers the most serious 20 conditions cited in the Global Burden of Disease list, drawn up by the Institute for Health Metrics and Evaluation. As part of its community investment programme, Merck trained 22,000 healthcare workers in 2013 and invested $24m in partnerships designed to strengthen health systems and address underlying barriers to health. The partnerships, which include programmes to tackle HIV in China and Botswana, reached 342 million people in 2013. The US pharma company invested an additional $70.5m in patient and provider-education interventions, down from $91.1min 2012.
UPS hits 10% emission reduction goal
Global logistics provider UPS is revising its target for the carbon intensity of its air and ground fleet after achieving its 10% reduction (against a 2007 baseline) target three years ahead of its 2016 deadline. UPS posted a 13.6% reduction in CO2 intensity, largely through the use of alternative fuels and more sustainable modes of transport. The company is now committing to reduce its transport-related carbon emissions by 20% by 2020. The carbon impact of its road delivery of small packages in the US accounts for nearly half of its overall carbon footprint. The remainder is divided between its air transport activities (37%) and its supply chain and freight segment (15%). UPS has logged more than 55m miles using alternative fuels and advanced technology vehicles to date. It has a target to reach 1bn miles by the end of 2017. Among UPS’s other environmental achievements is the planting of 1.3m trees between 2012 and 2013.
Fluor racks up volunteer hours
Employees at international engineering company Fluor provided 44,800 volunteer hours to community projects around the world during 2013. The efforts of its volunteers saw the delivery of 545,400 free meals in the US. Fluor’s $4.9m philanthropy programmes, which range from immunisation initiatives to drug abuse counselling, benefitted about 29,300 individuals. One of the biggest beneficiaries of the company’s community giving projects is the tertiary education sector, with US and international universities receiving grants totalling $1.9m. Together with the Fluor charitable Foundation, the corporation’s total community spend in 2013 increased to $8.5m.airlines carbon tax circular economy corporate misconduct executive survey GRI McKinsey Palm Oil sustainable travel unethical behaviour