Delivering in Doah

SandyHopes were high but realistic when COP18 started in Doah. I for one did not anticipate much after the colossal failure in Copenhagen (COP15). But believing that we have to solve or differences, I did hope that at least something would come out of all the effort put in.

From the outset the ambition was to reduce CO2 emissions significantly in-order to keep the Earth from heating up. Especially the developing countries had hoped for a deal that ensured the possibility for sustainable growth. The impact of climate change have been felt in all the countries that “normally” were against any kind of real restriction on emissions so there is plenty incentive to take action.

The initial target was two degrees reduction in global warming, but now it is more likely that we will hit four degrees no matter what we do. So when the Danish climate minister Martin Lidegaard looks towards 2014 for a start of the negotiation for a solution I for one do not think it is even close to a success. Or as he puts it.

“It is crucial that we will soon have taken decisions to ensure we can keep our political promises. Therefore, I am delighted that we have established that the climate change conference in 2014 will be about how we limit greenhouse gas emissions within the next few years – for example through energy efficiency improvements and the removal of subsidies for fossil fuels”, says Martin Lidegaard.

I do belive that if we continue down this path we are creating the seeds to our own destruction. The current politicians are thinking mare about the next election (for those countries that are lucky) than about how to lead their people safely and wisely to a better tomorrow. For better or worse they are the only ones that can make real changes to global warming if we like it or not.

I have attached the official Danish press release from the COP its in Danish, but the message is clear if you read between the lines – we took a real big step in the wrong direction.


Institutional investors will put 60 billion into Danish Infrastructure

The Öresund Bridge from underneath

The Öresund Bridge from underneath (Photo credit: Wikipedia)

It is quite amazing to see and hear what Institutional investors are communicating at the moment. For a long time it was their job to create more wealth for the people who had trusted their hard earned money into a few very well of funds. They invested freely in all kinds of projects and had portfolios that were very diversified (and some would say to diversified).

The first came the raise of the consumer activist who forced these huge investors to put in ethical screens that ensured that there was some form of consistency between the individual wishes and the investment targets. These pension funds have now taken a further step in the direction of creating a more sustainable investment platform by looking into projects that benefit the very society and people own them.

The financial and economic crisis means that public construction projects are on a diet, but now there are signs that there may be a tremendous boost on the way to the Danish infrastructure. A telephone survey done by a independent think tank, shows that the country’s ten largest pension and the state owned, ATP, are willing to invest nearly 60 billion kroner in the Danish infrastructure such as a harbour tunnel in Copenhagen, sewers or a large bridge between some of the main island of the country. According to calculations this will create 7,200 new Danish jobs annually over a period of 10 years when billions are invested in public works projects.

This means that there is cash then the government just need to provide the projects and vision needed to make it a reality.

Socialist government will tax multinationals – Nestle is next

Creating Shared Value Forum 2010

Image by Nestlé via Flickr

The new socialist minister of Tax Thor Möger Pedersen will upgrade the Danish treasury organisation with an extra 160 employees in order to investigate international companies on their tax books.

“It is high time to intervene. The Government will increase the transparency of companies’ payment of corporation tax. All the promise and all must contribute to the Danish economy back on its feet – even the multinationals’ he says

In practice this will mean that multinationals tax information will be posted on the treasuries website and their books will looked into. The claim is that these companies even during the good times up to 2008 (or 2007) did not pay their fair share and now that things are bad they claim even higher tax reductions.

One of the companies that are being named is Nestle a company that have been under scrutiny in several countries around the world for their ability to pay very low taxes. They even have tax manager positions that make around 100’000 Euro with the purpose of reducing the tax paid by the company.

With the prospect of being named and shamed the company is threatening to move their Nordic headquarter to Sweden. Which is strange is this country is even higher taxed than Denmark but I guess they had not really thought the idea fully through. As the Danish CEO of Nestle Fred Holm puts it.

“We have our Nordic headquarters in Denmark, but if we are to be exhibited in this way, then we might as well move to Sweden. Then there is no reason to be in Copenhagen. We want to be here, but we will not be shown, when we just follow the rules, “says Fred Holm, who says that Nestslé has 230 men employed in Denmark.

To be honest I find the idea appealing. What could our society do if we all contributed to the same pot? Some of these companies have made billions of Euros on operating in these countries and have not paid their fair share of tax for several decades. Their ability to hide and shuffle their money around has been remarkable and clever. While I do not think they have done anything illegal they could at least be challenged on their morals and ethics.

On the Nestle website the company proclaims that they are all for share value e.g. the Kramer and Port kind I would guess, but in the interpretation it means that

Creating Shared Value is a fundamental part of Nestlé’s way of doing business that focuses on specific areas of the Company’s core business activities – namely water, nutrition, and rural development – where value can best be created both for society and shareholders.”

So according the Nestle interpretation of CSV it does not include tax so one could hardly claim that they are unethical on that point on the other hand leaving it out does say something about the company mind-set and approach to the societies it operate in.

If a link between profit and society can’t be established it is not in Nestle mind CSR and therefor is tax not included.

I for one will be looking forward to what the Danish government will do and how they will go around the business of making multinationals pay more back to the society that they operate in. One must not forget that there are companies that do pay their fair share and that they are put at a disadvantage by companies that have the ability to shuffle money around. It could actually be a competitive advantage that tax paying companies can utilize in the Danish market as tax evaders leave and create new market opportunities which were out of reach before.

The 99% of Denmark

You would be blind if you had not noticed the spreading of the “anti-capitalist” movement in the US also know as the 99% or Occupy Wall Street. And while the do have big issues there is no place were the fall from being the world leading economic superpower and the mall of the world to real tangible poverty have been greater then in here. In Denmark we have seen the first Facebook groups being formed and some of the first attempts to form demonstrations by ordinary people.

So how does the 99% compare between the US and Denmark and does the Danes really have anything to complain about?

Business insider has featured a number of interesting statistics about the situation in the US and I have tried through the Danish statistical office to replicate some of the same charts just in a local Danish context.

For one thing is the unemployment rate around 9% or around 14 million people in the US while it in is 4,2% or around 110 thousand people. While the numbers have been increasing from around 2% in 2008 and more people have lost their jobs the impact is still manageable. And we have yet to see real poverty on a large scale and fall in living standard among the middleclass. Also is the time from the loss of job to the time when people get another place of employment not as long as we have seen it elsewhere.

Another interesting thing is that corporate executives pay continue to rise both in the US and in Denmark. As one of the leading Danish corporate Asger Aamund said, “The Danes better get used to higher corporate payrolls” in spite the fact that the economy is a recession or as close to one as it can possible get. And as unemployment continue to grow and more and more people have to live for less it is no wonder people start o get upset.

One of the most discussed political and economical subjects discussed in Denmark is the growing inequality or the gap between the relative poor and the relative rich. According to the CIA (yes, it is the CIA you are thinking of) is Denmark number 17 on the list on the US is number 93!  Located in between Bulgaria and Camaroon. According to the survey are the most unequal country being Nambia and the most equal country being Sweden. One might argue that equality is not a goal in it self but it is shown that the level of inequality and social stability is to a large extend co-constructive. This means that countries where the economic differences are small will have a larger degree of political stability.

In both the US and Denmark was the pre crisis proportion of rich people around 2% and the poor 30% so when the number of poor gets higher it is no wonder that people start to make noise when they are asked to pay the bill. While we are far from some of the countries in the developing world we the propositions are not shifting in a more equal direction.

Do the Danes have a cause for alarm and a reason to take to the streets is a question, which is difficult to answer. But there is little doubt that the people who are asked to pay the bill after the relative rich have taken their share are the people with the lowest income. And as people with high incomes again and again are exposed as fraudsters, inside traders, pyramid builders, or just plain greedy the reasons for ordinary people to take to the streets just increase.

Danish pension funds will solve Danish infrastructure problems

In the past two years Denmark has been hit by extreme downpours, which have resulted in severe problems in relation to infrastructure issues. The weather have been characterised as the worst in downpour in recorded Danish weather history. Especially in Copenhagen there have been problems with flooding and later with getting rid of the massive amounts of water that have been accumulating in cellars and streets because the drainage system could not cope. But now there seem to be a solution underway as Danish pensions fund have proposed to invest in infrastructure which will remedy some of the problems a investment in the area of 2 billion Euro just for Copenhagen alone.

“Climate change as a extreme rain will require investments in billions, as it can be difficult to find space in government budgets. We have lots of money, we would like to invest in it so that municipalities can spend the money on welfare,” says CEO PFA Pension, Henry Heideby,

PFA, PKA and pension Denmark have proclaimed that they have 19 billion dollars that can be invested now, and where government will pay back with interest over time. A broad political majority supporting the proposal but it is still unclear what the details of the agreement will look like. The spokesperson from the Liberal party on finance issues, Jacob Jensen, sees it as a step to boost more cooperation between government and private investors.

“It could be for renovation of the sewers,” says Jacob Jensen.

Last year’s torrential rain cost insurers nearly one billion dollars in damages, and ISS Damage (one of the companies in charge of the clean-up) estimates that damage is more extensive this time.

One of the proposals have been to establish channels in Copenhagen just like in Amsterdam in order to lead water away from roads and houses.

“We are entering to make sure that water is flowing in the streets in a planned direction toward the green areas, such as the park. From there, there must be channels that can lead the water further out to the coast,” said Per Jacobsen the local governmental official in charge of severs and water supply.

Copenhagen has since last year’s big cloudburst cooperation with seven neighboring municipalities to find a common solution to the problem of water masses, but environmental and engineering mayor Ayfer Baykal doubt on the idea of channels.

“Such concrete channels mean that we must tear half the town down so we can not just do. But we must look at whether there are areas we can use the pools or another for rainwater, so it does not burden the sewers, “he said.

Under all circumstances there is no doubt at least among the majority people that the weather we see in Copenhagen is a result of global warming and new thinking have to be applied in order for this and other cities to cope with the challenge. As pension fund in reality is “our own money” it would seem appropriate that we put it to good use for something the will benefit us all.