Investors and Companies’ Biodiversity and Natural Capital Reporting and Performance

This paper presents the results of a multidisciplinary qualitative study concerning the influence of investors on the performance and dependencies of companies in relation to biodiversity and natural capital (BNC). For BNC, we employ four indicators: land use, water use, chemical pollution and carbon emissions. The study assesses: (i) in which way asset managers and fund managers exert influence on the efforts of companies to reduce their negative environmental impact and to improve their positive environmental impact; (ii) how this influence is perceived by the companies; and (iii) to what extent legislation requiring reporting on non-financial performance criteria supports the parties in their engagement and communication. Interviews were conducted with multiple investors and companies to assess in a detailed way the interaction between these parties. Key findings include that BNC is considered material by half of all interviewed investors, that they employ available legal options in their engagement strategies, and that they use the information disclosed by investee companies pursuant to mandatory reporting law. However, company respondents indicate that investors are only interested in BNC when it is clearly and directly linked to (reduced) financial risks. These respondents stated that BNC performance as well as transparency strategies do not have any material influence on investors. Another central issue flagged by respondents is the lack of comparable and standardised information regarding BNC themes such as corporate water use, land use and chemicals. Common methodologies and standards to tackle these issues are still missing. Based on our findings, it can be concluded that tangible strategies for successfully tackling BNC issues are absent. The approaches developed so far are not clearly enough linked to (financial) risks and opportunities in the past, present or future. The perceived effect of EU Directive 2014/95 on tackling BNC issues is also low and environmental profit & loss accounts are unable to clarify the financial relevance of BNC. Establishment of a clear nexus between BNC and financial risks and opportunities is a necessary precondition to advance BNC in future

The Novel Compound Sul-121 Preserves Endothelial Function and Inhibits Progression of Kidney Damage in Type 2 Diabetes Mellitus in Mice

Diabetic nephropathy is still a common complication of type 2 diabetes mellitus (T2DM) and improvement of endothelial dysfunction (ED) and inhibition of reactive oxygen species (ROS) are considered important targets for new therapies. Recently, we developed a new class of compounds (Sul compounds) which inhibit mitochondrial ROS production. Here, we tested the therapeutic effects of Sul-121 on ED and kidney damage in experimental T2DM. Diabetic db/db and lean mice were implanted with osmotic pumps delivering Sul-121 (2.2 mg/kg/day) or vehicle from age 10 to 18 weeks. Albuminuria, blood pressure, endothelial mediated relaxation, renal histology, plasma creatinine, and H2O2 levels were assessed. Sul-121 prevented progression of albuminuria and attenuated kidney damage in db/db, as evidenced by lower glomerular fibronectin expression (~50%), decreased focal glomerular sclerosis score (~40%) and normalization of glomerular size and kidney weight. Further, Sul-121 restored endothelium mediated vasorelaxation through increased production of Nitric Oxide production and normalized plasma H2O2 levels. Sul-121 treatment in lean mice demonstrated no observable major side-effects, indicating that Sul-121 is well tolerated. Our data show that Sul-121 inhibits progression of diabetic kidney damage via a mechanism that involves restoration of endothelial function and attenuation of oxidative stress

Combating Environmental Irresponsibility of TNCs in Africa: An Empirical Analysis

Environmental irresponsibility is one of the most prominent issues confronting host communities of transnational corporations (TNCs) engaged in the production of economic goods and, sometimes, services. Drawing mainly on stakeholder theory, combined with legitimacy theory, this article addresses how host communities in Africa combat the challenge of environmental irresponsibility of TNCs. To illustrate the dimensions and dynamics of the challenge, this paper examines the experience of despoliation of Ogoniland by the oil giant Shell in Nigeria. The analysis draws attention to the significance of the role of individuals and civil society groups in securing accountability of one of the most formidable fronts of economic globalisation. The analysis is particularly relevant to the experience of environmental irresponsibility in the context of weak governance structures

An evolutionary approach to international political economy: the case of corporate tax avoidance

Corporate tax avoidance is both widespread and diverse in its practical mechanics. The scope of the phenomenon often leads economists to conclude that in the jungle of economic competition, tax planning (or optimisation) is among the necessary tools to ensure the survival of the fittest. This theory is increasingly associated with a Darwinian theory of economic evolution. In this paper, I develop a contrasting framework of the evolutionary political economy of corporate tax avoidance. Analysing core concepts of Old Institutionalist Economics (OIE), I examine the core drivers of corporate tax avoidance in a globalised system of states. The major contrast, I find, is between that of the corporate and legal personality and the institutional environment in which it operates. Historically, each corporate entity has been considered a separate legal person, yet a series of ‘mutations’ of incorporations laws created a widening gap between theory and reality, and these, in turn, give rise to tax arbitrage. Narrowing this gap, however, impinges on another venerable historical institution, the institution of sovereignty and sovereign inequality

Is the water footprint an appropriate tool for forestry and forest products: The Fennoscandian case

The water footprint by the Water Footprint Network (WF) is an ambitious tool for measuring human appropriation and promoting sustainable use of fresh water. Using recent case studies and examples from water-abundant Fennoscandia, we consider whether it is an appropriate tool for evaluating the water use of forestry and forest-based products. We show that aggregating catchment level water consumption over a product life cycle does not consider fresh water as a renewable resource and is inconsistent with the principles of the hydrologic cycle. Currently, the WF assumes that all evapotranspiration (ET) from forests is a human appropriation of water although ET from managed forests in Fennoscandia is indistinguishable from that of unmanaged forests. We suggest that ET should not be included in the water footprint of rain-fed forestry and forest-based products. Tools for sustainable water management should always contextualize water use and water impacts with local water availability and environmental sensitivity

Group subsidiaries, tax minimization and offshore financial centres: Mapping organizational structures to establish the ‘in-betweener’ advantage

International business and public policy research have examined the techniques that multinational enterprises (MNEs) use to shift revenues to subsidiaries in offshore financial centres (OFCs) in order to minimize tax liability and arbitrage for their advantage. While study of such tax arbitrage strategies has looked to geographical locations and legal dimensions to better understand these strategies, it has ignored the structural and organizational relationship between MNEs and their subsidiaries. We define two distinct types of OFC-based corporate entities based on their location among and apparent control over other MNE affiliates: ‘stand-alone’ OFCs at the end of a chain of MNE subsidiaries; and ‘in-betweener’ OFCs with equity control over further entities and hence apparent flexibility to redirect profits to other MNE subsidiaries further down the chain. We hypothesize that when MNEs have in-betweener OFCs controlling a substantial share of overall MNE profits, this indicates greater MNE interest in aggressive tax planning (ATP). We then evaluate empirical support for our claims based on an ‘equity mapping’ approach identifying stand-alone and in-betweener OFCs in 100 of the largest MNEs operating globally. This study demonstrates that a key factor determining tax arbitrage is not the amount of value registered on OFC subsidiaries’ balance sheets, but rather the portion of the group’s operating revenues and net income controlled by OFC subsidiaries. National taxing authorities could benefit from tracking in-betweener OFC locations and behaviour to counter ATP strategies, decrease sovereign arbitrage, and increase MNE tax revenue