Valuing social responsibility programs

Most companies see corporate social responsibility programs as a way to fulfill the contract between business and society. But do they create financial value?

Companies face increasing pressure from governments, competitors, and employees to play a leading role in addressing a wide array of environmental, social, and governance issues—ranging from climate change to obesity to human rights—in a company’s supply chain. Over the past 30 years, most of them have responded by developing corporate social responsibility or sustainability initiatives to fulfill their contract with society by addressing such issues.1

See full Press Release.

U.K. Report Urges More Pay Disclosure

A report issued by a United Kingdom government commission advises British financial leaders to disclose their pay to the public, in addition to other policy suggestions.

A report issued by a United Kingdom government commission advises British financial leaders to disclose their pay to the public, in addition to other policy suggestions, according to the New York Times. The 142-page report also addresses issues pertaining to the avoidance of future financial crises, including risk controls and compensation oversight.

Among other points of advice, the report suggests that companies disclose the pay of those executives whose compensation exceeds that of the companies’ directors. Such disclosure would not include names.

See full Article.

Learning from financial regulation's mistakes

Current bank oversight failed to prevent the financial crisis. Let’s not prescribe more of the same.

The G-20 meeting in London earlier this year set the direction for reforming the regulation of financial services to prevent a recurrence of the present crisis. Still to come is the hard work of hammering out the details, which will determine if a new regulatory system can succeed—without imposing excessive costs or triggering unintended consequences.

The causes of the current crisis resemble those of many previous ones: banks that didn’t have enough capital lent too much, too easily, relying on wholesale funding that disappeared when the inevitable concerns about asset quality arose. Yet there are important differences this time. The current problem started in what were regarded as the world’s safest and most sophisticated markets and spread globally, carried by securities and derivatives that were thought to make the financial system safer.

See full Press Release.

Efficiency Drive Could Cut Energy Use 23% by 2020, Study Finds

The biggest opportunity to improve the nation’s energy situation is a major investment program to make homes and businesses more efficient, according to a study released Wednesday by the consulting firm McKinsey. An investment of $520 billion in improvements like sealing ducts and replacing inefficient appliances could pr

The report said such a program, if carried out over the next decade, could cut the country’s projected energy use in 2020 by about 23 percent, a savings that would be “greater than the total of energy consumption of Canada,” Ken Ostrowski, a senior partner in McKinsey’s Atlanta office, said at a forum in Washington on Wednesday. It would also more than offset the growth in energy use that would be expected otherwise.

“The scale is vast if we can put together the means to pursue it,” Mr. Ostrowski said.

See full Article.

McKinsey Report on US energy efficiency

In this report, McKinsey & Company offers a detailed analysis of the magnitude of the efficiency potential in non-transportation uses of energy, a thorough assessment of the barriers that impede the capture of greater efficiency, and an outline of the practical solutions available to unlock the potential.

The research shows that the U.S. economy has the potential to reduce annual non-transportation energy consumption by roughly 23 percent by 2020, eliminating more than $1.2 trillion in waste – well beyond the $520 billion upfront investment (not including program costs) that would be required. The reduction in energy use would also result in the abatement of 1.1 gigatons of greenhouse gas emissions annually – the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the roads.

Such energy savings will be possible, however, only if the United States can overcome significant sets of barriers. These barriers are widespread and persistent, and will require an integrated set of solutions to overcome them – including information and education, incentives and financing, codes and standards, and deployment resources well beyond current levels.

See full Report, in pdf format.

Being a mum has 'devastating' impact on earnings, finds new report

The Fawcett Society (1), today released a report that calculates the impact that becoming a mum has on a woman’s earnings. The report, entitled ‘Not having it all: How motherhood reduces women’s pay and employment prospects’ is a new survey of existing research, drawing together the most recent data from academic and government sources. It finds that:

* Before becoming parents, men and women are equally likely to be employed but childbirth marks the start of a great divide which continues even after children have left home. Just over half (57%) of mothers with children under 5 are in paid work compared to nine tenths of fathers (2).

* Even those women working full time experience a pay penalty – partnered women without dependent children earn 9% less than men on average but for mothers with two children working full time the pay gap is 21.6% (3)

* Pregnancy can make women particularly vulnerable to discrimination. During the recent downturn there has been a marked increase in the numbers of women seeking help because they believe they have experienced pregnancy related discrimination. (4)

See full Press Release.

Leadership lessons for hard times

A series of interviews with 14 CEOs and chairmen of major companies sheds light on the foundations of corporate leadership.

During the current global recession, much attention has been devoted to the mistakes that sparked the financial and economic crisis, in hopes of not repeating them. Less has been given to what’s been done well amid the turmoil—to learn, for example, how best to lead a company through these tough times.

To contribute to that understanding, we interviewed the leaders of 14 major companies (see sidebar, “Who’s who”), all seasoned CEOs or chairmen, asking them to reflect on what they felt they had learned. We were keen not to limit their comments to the current recession and therefore also asked them to consider previous challenges they had faced in a turnaround or a crisis. The companies they lead are in different industries, face different challenges, and have performed quite differently.

See full Press Release.

McKinsey Report Cites $1.2 Trillion in Potential Savings From Energy Efficiency

A new report on energy efficiency from the consulting firm McKinsey found that the United States could save $1.2 trillion through 2020, by investing $520 billion in improvements like sealing leaky building ducts and replacing inefficient household appliances with new, energy-saving models.

That investment would cut the country’s projected energy use in 2020 by about 23 percent — a savings that would be “greater than the total of energy consumption of Canada,” said Ken Ostrowski, a senior partner in McKinsey’s Atlanta office, at a press event in Washington this morning. It would also more than offset the expected growth in energy use that would be expected otherwise in the United States.

“The scale is vast if we can put together the means to pursue it,” Mr. Ostrowski said.

See full Article.

La Conferencia anual del Banco Mundial sobre economía del desarrollo analiza las maneras de superar la crisis

* En la conferencia del Banco Mundial, los expertos analizan las maneras de superar la crisis actual.
* Las economías de Asia oriental como China y Corea ya saben cómo enfrentar los obstáculos que se anteponen al crecimiento.
* El exceso de capacidad industrial representa una traba para la recuperación mundial.
* Los esfuerzos relacionados con programas de estímulo fiscal deben ser ambiciosos y de efecto rápido.

17 de julio de 2009 — Las lecciones de la crisis de Asia oriental se presentan de muchas maneras, ya sea en forma de enseñanza práctica de los riesgos de la dependencia excesiva de las exportaciones, conociendo el momento en que funcionan mejor los incentivos para la innovación industrial, o mediante la recomendación de políticas monetarias conservadoras y una gran acumulación de reservas para contrarrestar la inestabilidad mundial.

Estos problemas y otros de carácter urgente, tales como el establecimiento de importantes planes de estímulo, el desplazamiento del poder económico, el crecimiento verde a pesar de la crisis y una estrategia para salir del colapso mundial actual, se trataron en la 20° Conferencia anual del Banco sobre economía del desarrollo de 2009, (ABCDE, siglas en inglés), que tuvo lugar en Seúl a fines de junio.

Ver Nota de Prensa completa.

Hit or miss for charities in recession?

On a cold December day, volunteers were sent out into the streets of Bury St Edmunds with their collection tins and encouraged to do their best.

The UK was on the cusp of recession. With families watching their pennies, they were expecting to find it relatively tough to raise money for the local St Nicholas Hospice.

But the annual "flag day" raised a record £1,200 - more than expected - as generous shoppers popped their loose change and more in the buckets.

"The only area of fundraising that has not been hit is the community side," said Yasmin Jeffery, marketing manager for the hospice.

See full Article.

Changing the fortunes of America’s workforce: A human capital challenge

Rising income dispersion in the United States and other advanced nations has become a source of concern. Since the early 1970s, incomes for the highest U.S. earners have raced ahead, while those at the bottom of the income distribution have stood still and those in the middle barely increased. Strikingly, even in the current recession, this underlying trend is not reversing.

In an effort to provide a comprehensive, well-founded explanation to policymakers and other interested parties, the McKinsey Global Institute and McKinsey Social Sector Office have conducted a study of changes in income dispersion and their causes from 1991 to 2005, the height of the economic cycle. The study analyzed a broader, deeper data set than previous research in the area, making it the first attempt to estimate the contribution to rising dispersion of fundamental changes in the U.S. economy’s mix of industries and occupations. Its findings show that redeveloping America’s human capital should be the focus of labor market policy coming out of the recession.

Understanding the patchwork of the United States’ labor market is key to understanding what has happened to income growth. Labor income largely accounts for 75 to 85 percent of household pretax income across the income distribution, and the analysis shows that differential rates of growth in labor incomes were the most significant sources of the differential rates of household income growth across the income distribution. For this reason, the research takes as its starting point the labor market rather than household incomes as most previous studies have done, resulting in a more detailed picture than was previously available.

See full Press Release.

Banking Crisis: regulation and supervision - Treasury Contents

This Report is the last to be published under the Committee's Banking Crisis inquiry.

By any measure the FSA has failed dreadfully in its supervision of the banking sector, but it has already begun to rectify its mistakes. The first chapter considers the steps already taken by the FSA to improve its regulation of banks in response to the failings exhibited in its handling of Northern Rock. We welcome the Supervisory Enhancement Programme (SEP) and the increased intensity of supervision which it will bring to bear on the financial services sector. The SEP is a necessary but not sufficient reform.

We note that the regulatory philosophy of the FSA has changed. It has less faith in market forces than before; it is more willing to challenge firms' business decisions; it now considers the competence of new bank directors and appears more willing to remove 'the punchbowl from the party'. All of this is good, but all of this is also fashionable. The FSA must develop the confidence to take unpopular decisions when the economic boom begins again, in the face of both industry and the political class.

Many banks are systemically significant because they are too big, they conduct many types of business, or they are too complex and interconnected. This Report addresses each of these issues in turn. We believe it to be unlikely that all banks could be shrunk to a size where they posed no systemic risk, but the Government can and should still act. First, it should ensure that there are no banks which are 'too big to save'. It should review the wisdom of allowing a banking market to be dominated by firms whose balance sheets are larger than the national economy. Second, banks must not operate under any incentive to grow large just in order to benefit from the status of being 'too big to fail'. We suggest that this market failure be addressed through a 'tax on size' administered through the capital requirements regime.

Access full Report.

The Equality Bill: Defining a new approach or business as usual?

The Equality BillThe Equality Bill was published on 27th April 2009 and is now making its way through Parliament. A principal aspiration for the Bill has been to harmonise and simplify existing equality legislation in order to provide individuals, employers, service providers and public bodies with a more straightforward legal approach to addressing equality.

However, during the long process of consultation and discussion of the Bill, its nature has changed and a broader set of aspirations and expectations are in place.

This report looks at what's in the Bill, including implications of the provisions for business, and asks whether the Bill in its current state does indeed define a new approach to help build a fairer society for the future.

See full Press Release.

Gender pay gap 'not being closed'

A lack of government action to tackle gender stereotypes in schools has contributed to women's pay failing to catch up with men's, a report has said.

The Women and Work Commission, which was established to consider how to close the gender pay gap, said it had widened to 22.6% from 21.9% in 2007.

Three years after its first report, the commission said women were still being pushed into "traditional" jobs.

It called for a strategy to tackle stereotyping in careers advice.

"The government is committed to tackling inequalities in the workplace and progress has been made across the public sector and in helping women get the skills and training they need," said Baroness Margaret Prosser, chair of the commission.

See full Article.

Valuing corporate social responsibility

Environmental, social, and governance programs create shareholder value, most executives believe, but neither CFOs nor professional investors fully include that when evaluating business projects or companies.

The perceived importance of corporate environmental, social, and governance programs has soared in recent years, as executives, investors, and regulators have grown increasingly aware that such programs can mitigate corporate crises and build reputations. But no consensus has emerged to define whether and how such programs create shareholder value, how to measure that value, or how to benchmark financial performance from company to company.

See full Press Release.

Politicians Accused of Meddling in Bank Rules

Accounting rules did not cause the financial crisis, and they still allow banks to overstate the value of their assets, an international group composed of current and former regulators and corporate officials said in a report to be released Tuesday.

The report, from the Financial Crisis Advisory Group, also deplored successful efforts by politicians to force changes in accounting rules and said that accounting standards should be kept separate from regulatory standards, contrary to the desire of large banks.

“The message to political bodies of ‘Don’t threaten, Don’t coerce’ flies in the face of some of what has been coming from the European Commission and from members of Congress,” said Harvey Goldschmid, a co-chairman of the group and a former member of the Securities and Exchange Commission.

See full Article.

Corporate governance: Lessons from the financial crisis

If there is one major lesson to draw from the financial crisis, it is that corporate governance matters.

Directors, regulators and shareholders, but also policymakers and the general public, need to pay more attention to corporate governance. This tells us how firms operate, their motives and principles, their reporting lines, who they are accountable to, and how they manage profit, remuneration and, in the case of many financial firms, other people's money. When times were good, too many people took their eye off the ball and now we see the consequences.

The public outcry has been loud and understandable, not least in relation to executive pay. And even some top executives have now admitted the lack of relationship between pay and performance and called for a salaries shake-up. We now realise that constantly rising share prices is not necessarily a sign of good corporate governance. In fact, as recent history shows, it could actually be the opposite.

The question is, what can be done to improve how financial firms operate? We have been examining the crisis closely and in particular seeing how the OECD Principles of Corporate Governance might help or, indeed, be improved in light of recent experiences.

See full Article.

The green growth race

Environmentally-friendly investments form part of many recently launched recovery programmes. With the right policies, they could achieve growth and a cleaner planet as well.

Sir Nicholas Stern, whose groundbreaking report in 2006 raised the alarm on climate change, recently declared that we had six years left to win the battle against global warming.

How realistic Sir Nicholas's claim is may be debatable, but there is no doubting the urgency of tackling the problem. Climate change is simply a matter of life and death.

The cost of inaction is well documented, not least by the OECD (see references), but until recently people have not talked enough about the benefits of action. That has started to change. The economic recovery programmes launched now see ecologicallyfriendly investments as a way to spur not just long-term green growth, but to jump-start a recovery. The policy is popular because it promises to deliver a healthier planet as well. Clean energy, innovation, new markets, new employment, and new wealth-the list goes on.

Korea launched the world's first "green new deal" stimulus package in January 2009, planning over $38 million in spending on various "green" projects. China is completing a $440 billion package to support wind and solar energy.

See full Article.

Wind Turbine Supply Chain Strategies, 2009–2020

With the global wind turbine industry anticipating economic recovery and a period of unprecedented growth starting in 2010, wind turbine component suppliers are adapting their strategies to take on the challenges of a more global, larger‐scale, and more technically complex supply chain. Following years of sellers’ markets, the global recession and the resulting slowdown in 2009 have forced component suppliers to prepare for a resurgent market in which intense competition will leave little room for long lead times, low quality, and high prices.

Suppliers of blades, bearings, gearboxes, generators, and towers are taking advantage of the present market weakness to realign their strategies in parallel with shifting demand for larger turbines delivered in more markets which require higher performance levels. This realignment has included relocating facilities to minimize transport costs, investing in larger model production lines, and focusing on performance improvement with technology innovations.

EER’s new study, Wind Turbine Supply Chain Strategies, 2009–2020, provides analysis of wind turbine market trends at this critical juncture for the industry, starting with the evolving supply chain strategies of wind turbine OEMs, and focusing on the strategies of key component suppliers, their products, and their market growth prospects within the context of the global wind turbine industry.

See full Report, in pdf format.

Development aid: The funding challenge

Development aid rose to a new record in 2008. While good news in a crisis, how can the trend be maintained?

In 2008, total net official development assistance (ODA) from OECD Development Assistance Committee (DAC) countries rose by 10.2% in real terms to US$119.8 billion. This is the highest annual aid figure ever recorded, representing 0.3% of members' combined gross national income.

This encouraging, if rather unexpected, news comes despite the fact that the global economic crisis began to bite early in 2008. Since debt relief was also coming to an end for some recipient countries, a technical fall in aid would not have been a complete surprise. Still, there is no room for complacency. On the contrary, there are signs that the crisis is now forcing developed countries into difficult budgetary choices and foreign aid could be a victim.

See full Article.

'Rewarding Failure': Will the Crisis Leave a Residue of Moral Hazard?

The federal government has poured hundreds of billions of dollars into the banking system, and most experts seem to agree that the financial crisis is closer to its end than its beginning. But as attention shifts from fire fighting to rebuilding, many are worrying about the "moral hazard" that may remain, with an apparent government safety net encouraging a new round of foolish risk taking.

Not everyone thinks the problem of moral hazard has grown, underscoring the continuing debate about what exactly caused the crisis and how key players will behave in a financial world that is still taking shape. But several Wharton faculty members interviewed say the government response to the crisis could lead to new problems down the road.

"We have created huge moral hazard by, in most instances, sparing all creditors from the consequences of their choices," says Wharton finance professor Richard J. Herring, noting that bond owners and others who lent vast sums to financial institutions have not been forced to take the kind of devastating losses suffered by stockholders.

See full Article.

Peru Struggles to Balance Rights of Native Population and Developers

The crisis that broke out recently in Peru involved the rejection by the native population of the Amazon region of several government decrees, backed by president Alan Garcia, making it easier for companies to log, farm, explore for oil and natural gas, and develop other natural resources.

The most recent round of conflicts began in April, when the Indian population of Peru’s Amazon region rejected a series of decrees promoted by president Alan García. The decrees were drafted in 2008 within the framework of the U.S.-Peru Free Trade Agreement. They make it easier to privatize natural resources in the Amazon region, which is rich in many commodities.

The native population demanded that authorities revoke the decrees, claiming they threatened their ancestral, communal rights in the region. But the government disagreed and so the 12 largest tribes organized a series of protest demonstrations, which included shutting down roads, closing gas pipeline valves and pumping stations, and blocking river navigation. The government reacted strongly to the demonstrations, arguing that the decrees “regulated” more effectively the management of natural resources and the areas preserved exclusively for the native population. García also emphasized that Peru needs foreign capital to develop its economic potential.

See full Article.

Encuesta del Gasto de las Empresas en Protección Ambiental. Año 2007

Los gastos en protección ambiental de la industria aumentaron un 15,1% en 2007 respecto al año precedente

Los gastos en protección del medio ambiente de los establecimientos industriales se elevaron a 3.012,5 millones de euros en 2007, lo que supone un incremento del 15,1% respecto al año 2006.

Los gastos corrientes destinados a la protección del medio ambiente ascendieron a 1.524,1 millones de euros (un 8,3% más que en 2006), mientras que las inversiones en equipos integrados y en equipos independientes alcanzaron los 1.488,5 millones de euros (con un incremento del 23% sobre el año anterior).

Ver Nota de Prensa completa, en formato pdf.

Why tax matters for development

Stronger and cleaner tax systems would help development, but there is much work to be done. Jeffrey Owens and Richard Parry , OECD Centre for Tax Policy and Administration

In 2008 a US senate subcommittee issued a report alleging that banks located in tax havens cost US taxpayers some $100 billion a year in lost revenue. That is a considerable leakage, especially in light of US laws, institutions and other mechanisms to help control tax evasion.

But if parking money offshore leaves an intolerable dent on the legitimate tax revenues of wealthy countries, just imagine the gulf it leaves in those of developing countries where the legal and institutional apparatus to stop tax evasion is far weaker. Tax abuse not only debilitates efforts to fight poverty but also weakens the fiscal base needed for sustainable economic development.

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An idea whose time has come—and gone?

An idealistic effort to establish a new humanitarian principle is coming under attack at the United Nations

GARETH EVANS, a former Australian foreign minister and roving global troubleshooter, makes a bold but passionate claim on behalf of a three-word expression which (in quite large part thanks to his efforts) now belongs to the language of diplomacy: the “responsibility to protect”. In a recent book, he says there are “not many ideas that have the potential to matter more for good, not only in theory but in practice.”

Like many people who labour to ensure that mass murder will never recur, he links his personal commitment to an early formative event: in his case, a visit to Cambodia on the eve of the massacres in which up to a quarter of the population died. For others, the spur was the genocide in Rwanda, pictured above; for others still, the killing of Muslim men and boys from Srebrenica in Bosnia.

Whatever their motive, people of that cast of mind took heart from the moment in 2005 when the biggest-ever gathering of world leaders accepted the principle that they have a general “responsibility to protect” human beings from genocide, ethnic cleansing, war crimes and crimes against humanity.

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Setting the standards and building confidence

Angel Gurría, Secretary-General of the OECD

When leaders of government, international organisations and civil society from around the world gather for critical discussions at the OECD summit meetings in Paris this June, one question will dominate the agenda: Is enough being done to restore confidence and long-term growth, and break the grip of the worst global crisis of our times?

Chairing the Ministerial Council Meeting on 24-25 June will be Prime Minister Han Seung-soo of Korea, who is well-placed to share Korea's own experience in overcoming the Asian crisis a decade ago and whose efforts may lead Korea to be one of the first OECD countries to emerge from the current downturn.

The OECD Economic Outlook, due for release on 24 June, will point to a protracted recession. However, our economies no longer appear to be in freefall, which, after a year of ever dimmer forecasts, is good news.

See full Article.

A stronger, cleaner, and fairer economy : Towards a new paradigm

The current crisis is an opportunity to launch a new economic model, in which the environment, as a pillar of human welfare, must be central.

By Cristina Narbona Ruiz, Spanish Ambassador to the OECD and former Minister of the Environment, Spain

In the past few months we have seen the emergence of the dire economic, social and environmental consequences of a system which privileges personal profit over the general interest, and greed and wastefulness over responsibility and prudence. This crisis must be tackled urgently, but by first understanding its deep roots and not yielding to the temptation of tending only to the more serious symptoms. All the analyses point to an over-dominant financial economy that generated astronomical profits for a tiny minority of the world population, and promoted excessive consumption and indebtedness. Meanwhile, social inequalities and the systematic destruction of the earth's ecosystems have escalated, helped along by a lack of regulation and insufficient public oversight. Public authorities have been too tolerant of speculation and tax avoidance, which run alongside pollution and the exhaustion of natural resources. And all of this in the name of a type of economic growth that, instead of increasing the well-being of all, actually threatens it for future generations.

The reality is that the economy has never been "autonomous" from ecology: all economic processes depend on ecological processes. The consequences of having ignored this reality have become tragically evident today. On the other hand, as some European countries in particular have repeatedly shown, higher and lasting levels of job creation and increasing well-being, alongside reinforced environmental and social requirements, are perfectly possible.

See full Article.

Pedal power for Kenya's mobiles

Two Kenyan students are hoping to market a device that allows bicycle riders to charge their mobile phones.

Jeremiah Murimi, 24, and Pascal Katana, 22, said they wanted their dynamo-powered "smart charger" to help people without electricity in rural areas.

"We both come from villages and we know the problems," Mr Murimi told the BBC.

People have to travel great distances to shops where they are charged $2 a time to power their phone, usually from a car battery or solar panel.

See full Article.

Risk, the Derivatives Market, & Proposed Regulatory Reforms: What's Ahead?

On June 17, the White House and the Department of the Treasury revealed plans to regulate over-the-counter derivatives. The proposals unveiled also included a host of other regulatory measures designed to avoid systemic risk in the financial markets. In a recent interview with Knowledge@Emory, Nicholas Valerio III, associate professor in the practice of finance at Emory University’s Goizueta Business School, discussed the reform proposals, the problems with over-the-counter derivatives, and what’s ahead for Wall Street. At Goizueta, Valerio teaches classes on derivative assets to undergraduate and MBA students as well as an advanced derivatives course to full-time MBA students. His areas of specialization include equity options and futures, investment management, and financial markets. In addition, he advises and accompanies MBA students on the annual New York Stock Exchange trek to further enhance the learning experience.

Valerio recommends Knowledge@Emory readers pick up two bestselling finance books to get a better perspective on risk management and the psychology and history of the financial markets—“Against the Gods: The Remarkable Story of Risk” by Peter L. Bernstein and “The Black Swan: The Impact of the Highly Improbable” by Nassim Nicholas Taleb.

See full Article.

Geithner urges end to ‘dumb regulation’

Divisions between the administration of Barack Obama, the Federal Reserve and key regulators came to a head on Friday as officials debated plans to overhaul the US regulatory system.

Tim Geithner, Treasury secretary, said there was “a lot of dumb regulation in our country” and urged lawmakers to act quickly in spite of resistance from the financial industry and other regulators to the administration’s plan.

See full Article.

A pan-European regulator will be here by 2010

The European Commission has adopted the detailed recommendations on European financial supervision from the February de Larosière report almost intact – save that where de Larosière had proposed a two phase implementation between now and 2012, the Commission has chosen in its communication of 27th May to compress the two phases into one, for implementation next year. At its meeting last week, ECOFIN (the Finance Ministers of the 27 member states) gave the green light to the Commission proposals.

The performance of EU national supervisors during the crisis, and in particular their refusal or inability to cooperate effectively, has been slated in influential reports, documents and speeches from de Larosière onwards – the February speech from the Chairman of CESR is a striking example.

The Commission’s adopted answer is to give enhanced powers to the three Lamfalussy Committees (CEBS, CESR and CEIOPS) to turn them from advisors into prudential supervisory authorities, whose decisions and guidance are binding on national supervisors throughout the EU.

See full Press Release.

Greenland comes in from the cold

As world leaders grapple with the perils of climate change, there are parts of the globe where warmer temperatures are welcomed. Hardtalk presenter Stephen Sackur has just returned from Greenland where he found plenty of people eyeing opportunities amid the melting glaciers.

The musk ox steak on my plate was seductively dark and succulent. One of my dining companions was eyeing a slab of reindeer flesh big enough to feed a pack of huskies, while the other was drooling over scallops harvested from the clear cold waters of the Baffin Sea.

But never mind this traditional, and sublime, Greenlandic fare, I really want to tell you about my side order of leeks. Without wishing to sound immodest I know a thing or two about vegetables - it comes from being the son of a Lincolnshire farmer - and I can tell you the Rowing Club in Kangerlussuaq has few peers when it comes to fresh, home-grown vegetables.

See full Article.

Greed behind crisis, warns Pope

We have an Ecuadorian woman living in Spain offering to auction her virginity because she has lost her job and her mother is sick back in Ecuador and, without a job, cannot send her money.

She is religious but sees no way out.

This would be a good time for the Roman Catholic Church, her club, to contact her and offer her a job.

That would be a practical demonstration of morality, not just talk!

Onésimo Alvarez-Moro

See article:
The Pope is set to blame greed and selfishness for the global financial crisis, in his latest encyclical letter - the highest form of papal teaching.

On the eve of the G8 summit in Rome, the letter will remind world leaders, bankers, businessmen and ordinary people of their moral duties.

The letter, Caritas in Veritate, or Love in Truth, is his third since Benedict XVI was made Pope in 2005.

He began writing it two years ago but has had to amend it considerably.

See full Article.

Alimentos: gobiernos agravaron la crisis

La Agencia de Naciones Unidas para los alimento (FAO, por sus siglas en inglés) aseguró que los gobiernos agravaron, con sus acciones, la crisis de alimentos del año pasado.

Un funcionario de la FAO le dijo a la BBC que el almacenamiento de alimentos y bloqueo a las exportaciones que efectuaron algunos países en Asia, sólo sirvieron para aumentar los precios.

Alexander Sarris, un alto funcionario de la organización, aseguró que el precio del arroz se duplicó cuando las autoridades de India y Vietnam decidieron frenar las exportaciones y Filipinas almacenó las importaciones.

Ver Artículo completo.

Major world economies aim for "green growth" as the way out of the crisis

The world’s main economies are looking to “green growth” as the way forward out of the current crisis, opening up new prospects for climate-change negotiations ahead of the 15th Conference of the Parties of the UN Framework Convention on Climate Change (COP15) in Copenhagen in December.

Ministers from 40 countries, representing 80% of the world economy, discussed the crisis and where next at the OECD's annual ministerial meeting in Paris. Participants included the 30 OECD member countries plus five countries that are candidates for membership, Chile, Estonia, Israel, Russia and Slovenia, and five major economies with which the OECD has a policy of ‘enhanced engagement’ -- Brazil, China, India, Indonesia and South Africa.

See full Press Release.

Accountants given green reporting guidance

Climate change bill brings green policies into the corporate mainstream

Accountants are being encouraged to improve their knowledge about environmental reporting as companies and public bodies face growing pressure to reduce their carbon footprint.

The climate change bill, which requires the UK to reduce emissions by 80% from 1990 levels by 2050, brings green policies into the corporate mainstream.

To help accountants through the thicket of green regulations and targets the Association of Chartered Certified Accountants has released the second in its series of sustainability briefings.

See full Article.

Financial sanctions – are you compliant?

The FSA released its review of authorised firms’ compliance with the UK Financial Sanctions regime on 27th April. The headline conclusion makes concerning reading: “Our review has led us to conclude that there are inadequacies in firms’ systems and controls to reduce the risk of a breach of UK financial sanctions in all size of firms across all financial sectors.”

To provide some examples, the FSA report talks of serious confusion between AML due diligence and name-checking for sanctions purposes; of a lack of appreciation of the full extent of financial products and services implicated; and of firms that have policies but fail to make sure staff are aware of them or to provide training.

The inadequacies seem to exist – no surprise, really – in inverse proportion to the size of the firm, with smaller firms lacking the resources to understand and deal with the significant complexities of the sanctions regime.

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Battle to save the planet is hotting-up

Accountants try to convince leaders that saving the planet means including climate change information in the annual reports of big companies

Leaders tend to meet these days in an attempt to save the world economy ­ but when diplomats and bureaucrats convene for the UN Climate Change Conference in Copenhagen in December it will be to tackle a problem on an altogether different scale: ­ save the world.

When they do, somewhere in the middle will be a group of accountants trying to convince leaders that saving the planet means including climate change information in the annual reports of big companies.

The first step was taken at the end of May when the Climate Disclosure Standards Board ­ set up by the World Economic Forum ­ published its draft framework for clarifying ‘precisely’ what information needs to be disclosed.

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Who needs audit?

Is statutory audit still an effective tool?

During a 50-year career I have observed audit from various perspectives – auditing with a Big Four firm; moving to business as a plc group internal auditor; then financial controller and commercial director; and latterly as a general practitioner serving small businesses.

A debate on audit last took place more than ten years ago when exemption for small companies was first mooted. Step changes since then have enabled several hundred thousand companies to avoid audit where no significant public interest exists.

Given recent corporate failures a debate seems appropriate between the profession, business leaders, government and financial academia to review how statutory audit matches business and investors’ needs.

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U.S. Green Jobs Seen Taking Years Of Planning

Alternative energy jobs can provide vocations across many sectors of the economy but policy to spark them can take years to develop, U.S. governors told a Senate committee on Tuesday.

State green power mandates and regional cap-and-trade plans on emissions have been useful tools in pushing local economies to begin to convert from fossil fuel plants to green jobs, the governors told the Senate's Committee on Environment and Public Works.

"This didn't happen by accident," Colorado Gov. Bill Ritter told the committee about thousands of green jobs that will be created in his state in wind power manufacturing plants and alternative battery companies. "It happened through a concerted and aggressive effort starting in 2004."

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ACCA put's water accounting on par with carbon

Global institute ACCA warns companies that neglecting water management could cost as much as neglecting carbon reporting

ACCA is calling on corporates to not only account for their carbon emissions but their water usage too in a report released this week 'Water: the next carbon?'

The institute hopes to encourage accountancy practices and the finance function in businesses to incorporate water risks and usage in its company reporting.

The global accountancy institute issues the report after a recent conference with World Wildlife Fund UK which saw the two bodies sign a memorandum of understanding with the goal of assessing the current UK water accounting and reporting processes.

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SFO chief invites small firms to help beat rising corruption

Record levels of corruption are exposed by the economic crisis pushing the head of the Serious Fraud Office to widen the scope of discussions to include advisers outside the UK’s biggest practices

The UK’s most senior fraud fighter has said he will call more accountants to the discussion table as record levels of corruption are exposed by the economic crisis.

Richard Alderman, the head of the Serious Fraud Office, told Accountancy Age that the department would be widening the scope of discussions to include advisers outside the UK’s biggest practices.

Alderman is taking action after an overseas corruption clampdown by the Ministry of Justice.

‘Big firms will be advising the very large corporates on this issue, but I’m also very interested in the smaller corporates and the advisers who will be advising them because I think they have a key role. I’m very much in favour of reaching out to them in order to be able to help them with that.’

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Report urges UK banking transparency

Banks must brace themselves for a rash of board-level bureaucracy, if the proposals of the Walker Review on financial sector corporate governance, published on Thursday, are accepted.

Sir David Walker, the former chairman of Morgan Stanley International, and author of the report, said financial groups should set up board risk committees, separate from audit committees, to ensure executives are not allowed to run amok.

Sir David also wants boards’ remuneration committees to take on far more work, scrutinising the pay of anyone who earns more than the average board-level executive.

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Compliance Risk Management - Easing the Burden

There is an increasing gap between the scale of the compliance task within the financial services industry and the skilled resource available to discharge it, exacerbated by current economic conditions, increasing regulatory demands and downward pressure on resource budgets. Whilst high-end compliance advice and judgment is rarely IT-dependent, regulators are also beginning to demand that compliance risks are dealt with using risk management methodologies, and viewed and managed consistently throughout complex organisations.

Compliance often drowns in data but lacks information. This demands the deployment of smart technology solutions within the compliance function to improve the transparency of control activities and compliance risks, and to enable compliance leaders to work with senior management in managing risk and compliance resource on a more dynamic, consistent and efficient basis.

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Malcolm Turnbull angers MPs as Coalition torn over climate

CLIMATE change is looming as a major challenge for Malcolm Turnbull's leadership after he angered some senior colleagues yesterday by publicly floating a new strategy despite failing to get shadow cabinet support for it.

With Mr Turnbull's leadership severely weakened by the disastrous "utegate" affair, sources said deep Coalition divisions over emissions trading presented a significant difficulty for the Opposition Leader as he pursued a political strategy of trying to defuse the issue while others believed the Coalition should "dig in".

Coalition policy is to vote the Rudd government's emissions trading laws down in the Senate next month, but reconsider that position before a second vote in November, when the final stance of the US is clearer and a second Senate rejection would provide a trigger for a double-dissolution election.

Senior Coalition sources have told The Australian Mr Turnbull asked shadow cabinet to consider the strategic shift of presenting the opposition's amendments when parliament resumes next month, saying business supported the idea and it would deprive the government of the chance to mount an attack on the Coalition as climate change spoilers.

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McCreevy's European omission

McCreevy’s refusal to sign key documents on international standards casts doubt over IASB’s future

The chasm which separates the International Accounting Standards Board and Europe has been exposed after EU commissioner Charlie McCreevy refused to sign documents which enshrine the values of international standard setting and underpins a key oversight body.

The absent signature has led to a stand off between the IASB and the European Commission.

McCreevy’s signature is noticeably missing from both the charter and the memorandum of understanding which set out the principles of international standard setting and underpin an oversight body, known as the monitoring board.

The monitoring board was set up in April to promote the continued development of high quality accounting rules by the IASB and provide oversight on the global standards-setting regime.

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Banking reform proposals outlined

The tripartite authorities: The Bank of England, the FSA and the Treasury currently regulate together

Opposition parties are setting out details of how they would regulate the UK banking system.

The Conservatives want to give the Bank of England more regulation powers, but also want to curb the personal power of the Bank's governor.

They would give responsibility for supervising financial institutions to a new financial policy committee.

Meanwhile, the Liberal Democrats say taxpayer-owned Lloyds and Royal Bank of Scotland should be broken up.

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Is the taxman really guilty of human rights abuse?

New legislation governing the right of HMRC to acquire data and information have the capacity to breach human rights says Roger Barnard, director of tax at Tenon

A public consultation with the potential to significantly strengthen existing powers for HM Revenue & Customs has been met cautiously, with some advisers arguing the proposals are already in practice.

Legislation governing the right of the department to acquire data and information came into effect on April 1, largely focusing on how HMRC approaches taxpayer compliance checks across a range of taxes, including corporate tax, VAT and PAYE.

According to HMRC, the legislation was brought in to make the tax system ‘simpler and more consistent’. However, a further proposal – that would give the taxman the power to seize large or ‘bulk’ batches of information at once – is leading many to question whether the consultation process is going to have any sway.

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Accounting for sustainability earns global accountancy backing

Global accountancy institutes join forces to bring sustainability to the forefront of reporting principles

Prince Charles' Accounting for Sustainability Forum has announced that 16 accountancy bodies across the world have agreed on a set of five sustainability principles.

This is the first time that a global group of accountancy institutes has set a guideline of this kind with the principles promoting 'connected reporting.'

By signing the principles, the participating bodies are hoping to bring sustainability to the forefront of accounting practic and educating future accountancy professionals on its importance and application.

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"Compartir costos" del cambio climático

El negociador jefe de las Naciones Unidas para el cambio climático, Yvo de Boer, instó a los países ricos a recolectar al menos US$10.000 millones para ayudar al mundo en desarrollo a elaborar planes nacionales tendientes a limitar las emisiones de gases de efecto invernadero.

En declaraciones a la BBC, De Boer dijo que ese dinero también debe utilizarse para "facilitar a las naciones pobres su adaptación al calentamiento global", cuyas consecuencias van desde desplazamientos de la población hasta la pérdida del sustento económico.

El funcionario de la ONU dijo que la cifra de US$10.000 millones es lo "mínimo" que el mundo desarrollado puede ofrecer.

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