BizResearch

The Greenest Big Companies in America 2009

Newsweek have just published a ranking showing the 100 Greenest Big Companies in America. Ranking companies based on sustainability has proved a huge challenge especially when trying to compare environmental performance across such a wide range of industries.  The 15 sectors include: banks and insurance; basic materials; financial services; food and beverage; general industrials; health care; industrial goods; transport and aerospace; media, travel and leisure; oil and gas; consumer products/cars; pharmaceuticals; retail; technology; and utilities.  The green score for each company is based on three components:

The ENVIRONMENTAL IMPACT SCORE, based on data compiled by Trucost, which provides performance measurements designed to capture the total cost of all environmental impacts of a corporation's global operations. Over 700 variables are summarized in the EIS. This figure is normalized against a company's annual revenues, so that companies of all sizes and industries can be compared.

The GREEN POLICIES SCORE, derived from data collected by KLD, which reflects an analytical assessment of a company's environmental policies and performance. Its scoring model captures best-in-class policies, programs and initiatives, as well as regulatory infractions, lawsuits and community impacts, among other indicators

The REPUTATION SCORE is based on an opinion survey of corporate social responsibility (CSR) professionals, academics and other environmental experts who subscribe to CorporateRegister.com. CEOs or high-ranking officials in all companies on the Newsweek 500 list were also invited to participate

The top three companies are:

Hewlett-Packard - with strong programs to reduce GHG emissions, this is the first major IT company to report GHG emissions associated with its supply chain. It has also made an effort to remove toxic substances from its products, although Greenpeace has targeted it for failing to do better.

Dell - ranks 4th among the top U.S. corporate users of renewable energy with their headquarters using 100% renewable energy. All its desktop and laptop computers will consume up to 25% less energy by 2010. It became carbon neutral in 2008 by using offsets and other methods and plans to maintain its carbon neutrality for the next five years. Dell also leads the industry with its product take-back and recycling programs.

Johnson & Johnson – has given a commitment to climate change which is rare for its peer group and has strong environmental management in place.  It has the largest fleet of hybrid vehicles in the world. However, it is a top emitter of toxic pollutants compared to other companies within its industry.

Click here to read the article and see the full ranking

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Electricity Industry 2009

This market research report from Key Note examines the UK electricity industry in terms of the fundamental activities of generation, transmission, distribution and supply. Between 2005 and 2008, UK final electricity consumption declined year-on-year. Factors contributing to this included: a decline in the manufacturing sector; the large loss of office jobs in 2008; and efforts by consumers to contain energy costs during the economic downturn. By value, the domestic sector accounts for the largest sales.

Many UK power stations are approaching the end of their useful life and it is estimated that a third of UK generating capacity must be replaced by 2020. Currently, fossil fuels account for the majority of electricity generation, with gas holding the largest share of the market, and this will continue to be the case at least until 2020. Due to increasingly tough measures on environmental issues, the industry will be required to find methods of reducing carbon emissions in the process of burning coal and gas. Some generating companies plan to build new coal-fired power stations, but the Government has decided that a proportion of the capacity of these stations must have carbon capture and storage (CCS) facilities, and has launched a scheme to subsidise four of the eight proposed sites. Eventually, all new coal-fired power stations will be required to include CCS schemes.

Renewable energy is growing as a source of electricity, but it is expensive, and some companies in this sector are campaigning for more Government support. To improve efficiency in meter reading and to give customers more control over their energy consumption, the Government has announced that all homes in Britain will have smart meters by 2020. This major project will involve the installation of remotely read meters in 26 million homes and several million businesses.

Forecasting the electricity industry is extremely difficult due to the current downturn in the UK economy, and factors such as high unemployment, contractions in gross domestic product (GDP) and fluctuations in oil prices are likely to impact on the market between 2009 and 2013. According to the Department for Business, Innovation and Skills (BIS), gas will continue to be the dominant fuel used for electricity generation, and its share of the market (by terawatt-hours [TWh]) will increase from 36.7% in 2005 to 53.1% by 2020.

This report is available to current London Business School staff, students and faculty from Key Not Online which can be found on the A-Z list of library databases via Portal

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Simpler, Smaller and More Stable: Designing Carbon Markets for Environmental and Financial Integrity

The type of carbon trading system that would be created by the energy bill recently passed by the House of Representatives would be complex, volatile and prone to gaming. That’s the conclusion of a new report released today by Friends of the Earth. It also finds that emerging proposals to regulate derivatives are necessary but not sufficient to ensure the integrity of carbon markets. Instead, the report concludes, if policymakers wish to use a cap-and-trade system as a tool to reduce global warming pollution, they must design the system to be much simpler, smaller, and more stable than current proposals.

In general, it argues that the more “bells and whistles” included in carbon market design e.g. strategic reserves, trigger prices, offsets, banking, borrowing, free allocations, the more chances there are to game the system. Therefore, a prudent rule of thumb is to design carbon markets to be as simple as possible.  It goes on to say that carbon markets should be large enough to satisfy the environmental objective of the system, but not so large that they become simply another way that financial speculators can make money off of money. Excessively large markets are harder to regulate, and can create systemic risks without providing proportional policy benefits. A managed price approach, in combination with principles of simple market design (i.e. prohibiting offsets, free allowance allocations, and banking/ borrowing) would not only reduce opportunities for gaming, but keep the size of the carbon markets manageable.  In addition, adopting this hybrid approach, with its predictable and stable carbon prices, would incentivize more rapid and significant investments in low carbon technologies and infrastructure, thus addressing a structural weakness in emissions trading schemes.

The report also concludes that policymakers must take a realistic view of how even the most robust regulatory regimes developed today will erode in effectiveness over time as they are whittled away.

Click here to read the full report

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The Conference Board Task Force on Executive Compensation

The current economic crisis has led to a loss of public trust in corporations and other institutions. Executive compensation, in particular has come under increasing scrutiny.  One of the missions of The Conference Board and its Governance Center is to encourage leaders to participate in a substantive dialogue on the most pressing governance matters. As part of this mission, the Governance Center established the Task Force on Executive Compensation to provide an independent review of the issues related to executive compensation. In addressing these issues, the task force and its advisory group brought together directors, shareholders, experts in compensation, governance and law, and members of academia.
 
The task force’s report and recommendations set forth five guiding principles, which it believes, if appropriately implemented, can restore corporate credibility with shareholders and other stakeholders and trust in executive compensation pay processes and oversight. The report provides guidance to boards, compensation committees, and management in implementing these guiding principles, and its appendixes contain additional information on executive pay practices and standards.
 
The Guiding Principles state that public companies should:

• Principle One: compensation programs should be designed to drive a company’s business strategy and objectives and create shareholder value, consistent with an acceptable risk profile and through legal and ethical means. To that end, a significant portion of pay should be incentive compensation, with payouts demonstrably tied to performance and paid only when performance can be reasonably assessed.
  
• Principle Two: total compensation should be attractive to executives, affordable for the company, proportional to the executive’s contribution, and fair to shareholders and employees, while providing payouts clearly aligned with actual performance.
   
• Principle Three: companies should avoid controversial pay practices, unless special justification is present.
  
• Principle Four - credible board oversight of executive compensation committees should demonstrate credible oversight of executive compensation. To effectively fulfil this role, compensation committees should be independent, experienced, and knowledgeable about the company’s business.
  
• Principle Five - compensation should be transparent, understandable, and effectively communicated to shareholders. When questions arise, boards and shareholders should have meaningful dialogue about executive compensation.

The full report is available to current London Business School students, faculty, staff and alumni from the Conference Board Research database which can be found on the A-Z list of library databases via Portal.

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The Euro at Ten - Lessons and Challenges

The European Central Bank was established on 1 June 1998. It began operating the single monetary policy the day on which the euro came into existence, 1 January 1999. The Fifth ECB Central Banking Conference took place in November 2008, a few months after the tenth anniversary of the establishment of the ECB, and a few weeks before the tenth anniversary of the launch of the euro. Not surprisingly, four out of six sessions of the conference focused on the challenges of and the lessons from the first decade of EMU. This volume presents the papers presented at the conference as well as the discussions and the speeches.

The first session examined the macroeconomic performance of Economic and Monetary Union, its achievements and challenges, over the past ten years.  Several key questions were addressed including: has the euro and the single monetary policy established a zone of monetary stability as envisaged, with all the direct and indirect benefits this entails for the 320 million citizens of the euro area?; Secondly, to what extent has the euro has contributed to boosting the trend growth of the euro area economy by strengthening competition, enhancing market efficiency, raising productivity growth and increasing labour utilisation.

Another important set of issues that were addressed in the second session involved the role of the euro in fostering the integration of financial markets in Europe and in promoting the efficiency and stability of the European financial system – and through it – of the broader economy in the euro area.  The increasing interconnectedness and interdependence of our economies and financial systems have important implications both for the conduct of monetary policy and for the performance of the central banking task of safeguarding financial stability. These implications were examined and assessed in the third session on the basis of the paper presented by Kashyap, Rajan and Stein and in the concluding policy panel.

The keynote speech of the conference, by President Trichet, discusses the sources of, and the lessons from, the global financial crisis, both for monetary policy and for regulation of financial institutions. In addition, Trichet outlines the policy response of the ECB to the crisis, in particular the policy response in cooperation with other central banks. In the closing address of the conference the Executive Board Member Stark emphasises that the first decade of EMU has not been calm: The ECB had to confront the aftermath of the Asian crisis, the bursting of the dot-com bubble, the attack of 11 September 2001, and the recent sharp rise in commodity prices.

Click here to read the report in full

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World Investment Report 2009

Global FDI flows have been severely affected worldwide by the recent economic and financial crisis according to the latest World Investment Report from UNCTAD (United Nations Conference on Trade and Development). Initially developed economies were most affected but now the decline has spread to developing countries too. This poses many challenges for developing countries as FDI has become their largest source of external financing. Inflows are expected to fall from $1.7 trillion to below $1.2 trillion in 2009, with a slow recovery in 2010 (to a level up to $1.4 trillion) and gaining momentum in 2011 (approaching $1.8 trillion).

Main findings from the report:

The crisis has changed the FDI landscape: investments to developing and transition economies surged, increasing their share in global FDI flows to 43% in 2008. This was partly due to a concurrent large decline in FDI flows to developed countries (29%). In Africa, inflows rose to a record level, with the fastest increase in West Africa (a 63% rise over 2007); inflows to South, East and South-East Asia witnessed a 17% expansion to hit a new high; FDI to West Asia continued to rise for the sixth consecutive year; inflows to Latin America and the Caribbean rose by 13%; and the expansion of FDI inflows to South-East Europe and the CIS rose for the eighth year running. However, in 2009 FDI flows to all regions will suffer from a decline.

The agriculture and extractive industries have weathered the crisis relatively well, compared with business-cycle-sensitive industries such as metal manufacturing. In addition, there is a better outlook for FDI in industries such as agribusiness, many services and pharmaceuticals. With regard to the mode of investment, greenfield investments were initially more resilient to the crisis in 2008, but were hit badly in 2009. On the other hand, cross-border M&As have been on a continuous decline, but are likely to lead the future recovery. Divestments were particularly significant during the crisis.

There was a marked downturn in FDI by private equity funds as access to easy financing dried up. Endowed with sizeable assets, sovereign wealth funds attained a record FDI high in 2008, though they too faced challenges caused by falling export earnings in their home countries. Overall policy trends during the crisis have so far been mostly favourable to FDI, both nationally and internationally. However, in some countries a more restrictive FDI approach has emerged. There is also growing evidence of “covert” protectionism

Click here to download the report

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Economic Survey of the European Union 2009

The 2009 Economic Survey of the European Union from the OECD says Europe has responded promptly to the crisis amid signs that member countries will emerge from the recession earlier than expected. But it adds that emergency policies to stabilize financial markets and support the economy must not endanger the single market and must be withdrawn once the economy recovers. Other structural reforms are needed in order to help prevent future financial crises and improve economic performance include improving financial regulation and supervision, raising the long-term sustainability of public finances and further increasing foreign access to European markets.

A major challenge for the EU over the longer-term is to raise the level of innovation; despite numerous policy initiatives, Europe still lags behind the United States and Japan in research and innovation. An integrated labour market for researchers, a European Community patent and a Unified Patent Litigation System would help to stimulate innovation. Tackling obstacles to the funding of innovation and encouraging research co–operation are also critical.

The report also argues that the EU must continue to resist the rise in protectionist sentiment and push for global trade liberalisation. Although recent reforms have reduced distortions in the Common Agricultural Policy, support could be further decoupled from production and payments better targeted to achieve ecological, social or other policy objectives.

In terms of environmental issues, policies aimed at reducing greenhouse gases, promoting low–emission technologies and cutting energy consumption are helping Europe to become a low-carbon economy. But the measures need to focus more on correcting only genuine market failures and be flexible enough to cope with future environmental, economic and technological changes. Faster liberalisation of EU electricity and gas markets is critical to increase competition and improve energy security.

The full report is available to current London Business School staff, students and faculty from SourceOECD which can be found on the A-Z list of library databases in Portal

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Best Global Brands 2009

Interbrand, in conjunction with Business Week, have just realised the results of their annual ranking the Best Global Brands 2009.  The 10 top brands are Coca-Cola; IBM; Microsoft; GE; Nokia; McDonalds; Google; Toyota; Intel; and Disney. The largest risers in brand value are Google (25%); Amazon.com (22%); Zara (14%); Nestlé (13%); and Apple (12%); and the largest decliners are Morgan Stanley (-26%); American Express (-32%); Harley-Davidson (-43%); Citi (-49%) and UBS (-50%).

Coca-Cola retains the number one spot, successfully maintaining its diversified portfolio in more than 200 countries. Last year it launched more than 700 products around the world.

With revenue is at an all-time high, IBM stay at the number two spot. It received the most US patents (more than 4,000) for the 16th year in a row, investing heavily in innovation as it continues its progression from a hardware provider to a software and services solutions brand. It is the market leader, with expanded presence in more than 170 countries and approximately 65% of revenue generated outside of the US.

The financial services market has seen major changes over the past year due to the recent financial crisis.  Interbrand has identified three brands that are growing their market position and leadership status.

• Barclays is emerging out of the crisis stronger than many of its peers. It appears that the company made a good decision not to take government money in December and the sale of BGI enabled the firm to stay liquid and benefit from new opportunities. Barclays has done a good job integrating Lehman’s US operations.

• Credit Suisse is moving up the ranks. The firm did not require government funds and is one of the key beneficiaries of the reshuffling of the marketplace. In the private banking space, Credit Suisse has profited from the weakening of its main rival UBS, while, at the same time, increasing its market share and leadership status. The Credit Suisse brand is positioned as a key pillar of the newly restacked financial services sector.

• With the acquisition of Abbey National, Santander has become a top international bank. The group’s next strategic move is to establish the brand in the US retail-banking market; the recent Sovereign Bank investment is the first step towards building a renewed U.S. presence. Santander is aiming to become one of the world’s top two or three largest banks.

Click here to see the full ranking

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Major errors prompt questions over Google Book Search's scholarly value

 Google Book Search's mistakes provoke questions about its scholarly value. Matthew Reisz reports

It should be the world's greatest scholarly resource, but some claim that Google Book Search's many huge - and often hilarious - errors raise major questions about its value to serious researchers.

Why does a link to a book on cosmology by a Napoleonic mathematician lead to a novel by Barbara Taylor Bradford? Could Sigmund Freud really be one of the authors of The Mosaic Navigator: The essential guide to the Internet Interface? And how did Barack Obama publish 29 books before he was born?

The journal Speculum is about the Middle Ages rather than gynaecological instruments, so why is it listed under "Health & Fitness"? And why on earth is a French translation of Hamlet classified under "Antiques & Collectibles"?

Even stranger, there seems to be something special about the year 1899, with Google claiming that a novel by Stephen King, a biography of Bob Dylan, a Portuguese version of the Beatles' film Yellow Submarine - and dozens of almost equally implausible titles - were all published then.

Such grotesque mistakes were pointed out by the linguist Geoffrey Nunberg, adjunct full professor at the University of California at Berkeley's School of Information, at its recent conference, "The Google Book Settlement and the Future of Information Access".

Read the full posting from the THE.

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Science, Technology and Innovation in Europe

This publication presents an analysis of Science, technology and innovation in Europe looking at the main statistical indicators in this field. It is intended for both generalists and specialists and is divided into three main parts: Part 1: Investing in R&D; Part 2: Monitoring the knowledge workers; and Part 3: Productivity and competitiveness

Selected highlights from the report:

In 2006, R&D expenditure as a share of GDP (R&D in the EU-27 remained stable at 1.84 %.  Considering the estimates by sector, most R&D expenditure is financed by the business enterprise sector (BES), which accounted for almost two thirds (1.17 %) of R&D intensity in 2006, while the public sector (higher education and government) accounted for 0.65% and the remaining 0.02 % was financed by the private non-profit sector (PNP).

In 2006 the leading EU-27 Member States in terms of R&D intensity were Sweden and Finland, with 3.73 % and 3.58 % respectively. R&D intensity also exceeded 2 % in Germany (2.53 %), Denmark (2.43 %), Austria (2.49 %) and France (2.09 %).

At EU level, high-tech exports grew on average by 0.5 % per year between 2001 and 2006, while high-tech imports declined by 0.1% per year. At country level, Cyprus recorded the highest average annual growth rate in high-tech exports (63.5%), followed by Latvia (32.7%), Slovakia (32.0%) and Bulgaria (31.2%). Over the same period Slovakia recorded the highest AAGR in terms of high-tech imports (26.7%).

In 2006, 1.3 million researchers (in FTE) were employed in the EU-27, which represents an increase of 77 700 over 2004. In the same period the number of researchers increased in most EU-27 Member States. In 2006, Germany employed the most researchers in FTE (282 000), followed by Spain (116 000).

Women are still under-represented in R&D in the EU-27, especially in the business enterprise sector: in 2005, women represented 30 %of all researchers in the EU and only 19 %of researchers employed in the BES. The share of female researchers was generally higher in the new Member States (2004 and 2007 enlargements) and candidate countries.

The report also presents the results from the European Innovation Scoreboard (EIS) at European and national level, together with a look at the Community Innovation Surveys (CIS) for 2006 and 2008.

The full report can be downloaded from the Eurostat website

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The Global Entrepreneurship Index

Volume 5, Issue 5:
The Global Entrepreneurship Index (GEINDEX),              
by Zoltán J. Ács (George Mason University and Max Planck Institute) and László Szerb (University of Pécs) 

Abstract

This paper constructs a Global Entrepreneurship Index (GEINDEX) that captures the contextual feature of entrepreneurship across countries. We find the relationship between entrepreneurship and economic development to be mildly S-shaped not U-shaped or L-shaped. Our findings suggest moving away from simple measures of entrepreneurship across countries illustrating a U-shaped or L-shaped relationship to more complex measures, which are positively related to economic development. Implications for public policy suggest that institutions need to be strengthened before entrepreneurial resource can be deployed to drive innovation.

To read this go to:
Portal> Library Serices> A-Z list of Databases> Foundations and Trends.
Or click on this link if you are logged into Portal and are a member of staff, student or Faculty at the London Business School

Air Transport Association 2009 Economic Report

The Air Transport Association of America (ATA), the industry trade organization for the US airlines, has just released its 2009 Economic Report, documenting operational statistics and financial results for the industry for calendar year 2008.  The ATA Economic Report provides both economic and statistical information about the US passenger and cargo airline industry. This year’s report also includes special sections on the economy, demand, energy, taxes and operations.

Selected highlights from the report:

Annually, commercial aviation helps drive $1.1 trillion in US economic activity and more than 10 million US jobs.  US airlines operate nearly 28,000 flights in 80 countries, using more than 6,000 aircraft to carry an average of two million passengers and 50,000 tons of cargo.

Operating revenues grew a healthy $11 billion in 2008, whilst operating expenses surged $24 billion, swinging the industry’s operating income into the red.

From 2001 through 2008, US passenger and cargo airlines reported cumulative net losses of more than $55 billion. Not surprisingly, over the same period, US passenger airlines were left with no choice but to sharply downsize, shedding more than 150,000 jobs.

The average price paid for a gallon of jet fuel jumped 96 cents in 2008 – the largest annual increase in history – to an all-time high of $3.07.

Flying operations, which constituted 42% of industry costs, increased 27% on a $16 billion year-over-year spike in fuel expenses to $58 billion in 2008.

US airlines have improved their fuel efficiency by more than 120% over the past three decades.
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ATA airlines are good environmental stewards, and are on track to meet or exceed their commitment to improving their fuel efficiency another 30% between 2005 and 2025, which will result in CO2 savings equivalent to taking 13 million cars off the road each year during that period.

Cargo transport accounted for 16% of total industry revenues and generated $5.3 billion more sales than in 2008, reaching an all-time high of $30 billion.

The 2009 Economic Report, as well as all previous editions of this ATA publication, is available on the ATA Web site.

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Global Competitiveness Report 2009-2010

Switzerland tops the overall ranking in the latest Global Competitiveness Report, an annual ranking produced by the World Economic Forum. The US falls one place to second position, due to its weakened financial markets and macroeconomic stability.  Rounding of the top five are Singapore, Sweden and Denmark. European economies continue to prevail in the top 10 with Finland, Germany and the Netherlands following suit. The UK has moved down one more place this year to 13th, mainly because of continued weakening of its financial markets.

The People’s Republic of China continues to lead the way among large developing economies, improving by one place this year. Among the three other large BRIC economies, Brazil and India also improve, while Russia falls by 12 places. Several Asian economies perform strongly with Japan, Hong Kong SAR, Republic of Korea and Taiwan, China also in the top 20. In Latin America, Chile is the highest ranked country, followed by Costa Rica and Brazil.
 
A number of countries in the Middle East and North Africa region are in the upper half of the rankings, led by Qatar, United Arab Emirates, Israel, Saudi Arabia, Bahrain, Kuwait and Tunisia, with particular improvements noted in the Gulf States, which continue their upward trend of recent years. In sub-Saharan Africa, South Africa, Mauritius and Botswana feature in the top half of the rankings, with a number of other countries from the region measurably improving their competitiveness.
 
The rankings used for the Global Competitiveness Report are based on the Global Competitiveness Index (GCI), which was specially developed for the World Economic Forum.  The rankings use 12 measures of competitiveness which include: Institutions; Infrastructure; Macroeconomic Stability; Health and Primary Education; Higher Education and Training; Goods Market Efficiency;  Labour Market Efficiency; Financial Market Sophistication; Technological Readiness; Market Size; Business Sophistication; and Innovation. The Report provides detailed profiles for each of the 133 economies featured in the study along with data tables with global rankings for over 110 indicators.  This year’s Report also includes a number of discussions of selected countries and regions including the United States, the large emerging BRIC economies and the 12 recent accession members of the European Union, providing an in-depth analysis of the issues affecting national competitiveness.

The full report can be downloaded from the World Economic forum website

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Global Corruption Barometer 2009

The Global Corruption Barometer (the Barometer) produced by Transparency International’s (TI) is a public opinion survey that assesses the general public’s perceptions and experiences of corruption and bribery.  It assesses the extent to which key institutions and public services are perceived to be corrupt and measures citizens’ views on government efforts to fight corruption.

This year, for the first time, the Barometer asked citizens about the extent to which they feel the private sector uses bribery to distort the policy-making process in their country; a phenomenon often referred to as state capture. The Barometer found that 54% of survey respondents believe bribery is commonly used by the private sector to shape policies and regulations. This contrasts sharply with what the private sector reports. TI’s 2008 Bribe Payers Index found that only 32% of senior business executives claimed that bribery was often used to influence specific policy outcomes.  Sixty five per cent of Barometer respondents in upper-middle income countries - many of these emerging economies where growth and political transition mean markets and regulation are in a state of flux - reported that state capture by the private sector is a common phenomenon. While 55% of respondents in high-income countries reported that it is common for bribes to influence the policy-making process, 45% of respondents in low-income countries claimed the same.

Other findings include:

Globally, respondents perceived political parties as the single most corrupt domestic institution, followed closely by the civil service.

Aggregate results, however, mask important country differences. In 13 of the countries sampled, the private sector was deemed to be the most corrupt, while in 11 countries respondents identified the judiciary

Corruption matters to consumers. Half of those interviewed expressed a willingness to pay a premium to buy from a company that is ‘corruption-free’.

Overall, the general public consider their governments’ efforts to tackle corruption to be ineffective. Only 31% perceived them as effective, compared to the 56% that viewed government anti-corruption measures to be ineffective.

The full report can be downloaded from the Transparency International’s website

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Financial Services Inquiry report

This report from the Equality and Human Rights Commission focuses specifically on gender pay gaps within the Finance Sector. Its scope extends from regional high-street banks to investment houses in and around the City of London, and in terms of jobs, from high-street bank cashiers to investment bankers. The Inquiry was initiated in early 2009, largely because it was already known that the financial services sector has a bigger overall pay gap than any other part of the economy. The Commission found that women working full-time in the finance sector earn 55% less per year than men working full-time. The gap between male and female full-time earnings is twice as large as the average gap across the economy as a whole.

The inquiry took a detailed look into the pay, policies and practices of 44 organisations employing the equivalent to 22.6% of the workforce in the sector. This has revealed that bonuses are a significant factor behind the gender pay gap within the organisations with men receiving five times the performance pay of women, an average of £14,554 in annual performance related pay compared to the female average of £2,875 (based on full-time equivalent earnings).  Significantly, the Inquiry found that no improvements appear to have been made. Responses to the questionnaire showed that women in new jobs were still on average receiving lower salaries than men. The high proportion of workers in the 25-39 age group - the age at which employees tend to have children - also makes it harder for women to have a viable career in the sector that balances family life.

The report sheds light on some of the reasons why the financial sector has such a wide pay gap:

• In many firms, employees do not know how much their colleagues are paid, and this lack of transparency allows inequalities to grow.
• In some roles, bonuses often form a significant element of take-home pay, and sometimes appear to be based more on an individual’s readiness to ask for more than rewards based just on their performance.
• Stereotyping and unwritten assumptions about ‘whose face fits’ distort recruitment processes.
• The sector’s unusually young age profile makes balancing work and family a particularly acute issue.
• In some parts of the sector, a long hours’ culture can be tough on those with caring responsibilities.
• For some, the move away from local branches to separate centralised head offices and call centres has closed the path from the shop floor to management to the boardroom.
• Some senior leaders are unwilling to acknowledge that there is a problem, or to do anything about it.
• Even where there are good equality policies on paper, they do not always translate into good practice.

The full report can be downloaded from the Commission’s website

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The State of Agricultural Commodity Markets 2009

In the first half of 2008, the world was facing the highest food price levels in 30 years and a global food insecurity crisis. Although international food prices have since fallen, they are still above the levels seen in recent years and are expected to remain so. The FAO estimates that soaring food prices pushed another 115 million people into chronic hunger in 2007 and 2008, bringing the world total to nearly one billion hungry people.

This latest report from the FAO aims to provide an objective and straightforward treatment of economic issues for all those interested in agricultural commodity market developments and their impact on developing countries. It attempts to explain why food prices increased, as well as discussing the steps needed to ensure that high food prices become an opportunity for developing country farmers in order to safeguard world food supplies at affordable prices. Many factors have contributed to the dramatic increase in food prices, but new biofuel demands and record oil prices are considered to be the major drivers.  High product prices have not helped farmers in developing countries, mainly due to the fact that high prices did not filter through. In addition, the necessary infrastructure and institutions were lacking and some policy responses (such as price controls and tariff reductions) actually reduced incentives.

The report also points out that the need to protect consumers from higher food prices must be balanced against maintaining incentives for productivity-raising investment and supply response. Policy measures need to be targeted, non-distortionary and positive towards agricultural investment.  Many developing countries need international support to overcome budgetary constraints and to identify and implement appropriate policies. Developed countries also need to consider the impacts of their agriculture, trade and energy policies on international food prices and availability.

The full report can be downloaded from the FAO website

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Football Clubs & Finance 2009

This market research report from Key Note documents the structure and dynamics of the club scene in general, while placing football in its context as a sport and leisure interest among UK consumers. In the 2008/2009 club season, three of the four semi-finalists in the prestigious UEFA Champions League were English. This confirmed the steady rise of England’s Premier League as a sporting and financial force in Europe, with top clubs like Manchester United, Chelsea and Liverpool able to attract a high proportion of the world’s best players on lucrative contracts.

The UK’s main professional and semi-professional employers of footballers are estimated to have generated revenues of £2.73bn, compared with £1.21bn at the start of the decade. Key Note forecasts that the market will rise to £3.5bn by 2013. The strong growth rate has been driven by a variety of long-term improvements to the British club game, including stadium investment, foreign players and managers and attracting a more affluent and socially varied audience. However, the 2000 to 2009 period has brought two major boosts: broadcasters competing for the right to show Premier League matches, and investment from outside the UK. Broadcasting rights now comprise half of all revenues in the Premier League,
up from 31% in 2000.

According to Key Note, the successful club of the future, whatever its size; will be one which learns to maximise revenues from the unprecedented number of sources now available. In addition to the broadcasting rights, match-day revenues are generated not only from ticket admissions, but also from sales in the club’s shops, bars and restaurants; punters invest here to make a ‘day out’ of the live occasion. There is no shortage of sponsors for rights to adorn everything from shirts to stadia, and although supporters may object to the over-commercialisation, they are still prepared to pay for the newly designed strip each season, helping to advertise the club and its sponsors.

This report is available to current London Business School staff, students and faculty from Key Note Online which can be found on the A-z list of library databases via Portal

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