This was the year of the food bank in Britain as the Trussell Trust handed out at least three million parcels – its biggest increase in five years. Rising levels of hunger – even among working families – have accompanied a stagnation in incomes, the roll-out of universal credit and cuts in benefits.
As the past year has been spent hovering on the brink of a Brexit deal, uncertainty has dogged the economy, depressing growth and pushing business investment sharply lower.
“Trade tensions abroad and Brexit debates at home are manifestations of fundamental pressures to reorder globalisation… there is a risk that countries turn inwards, undercutting growth and prosperity for all,” said Mark Carney, Governor of the Bank of England, summing up the challenges at the beginning of the year.
Carney also pointed to the imbalances of income and wealth created by globalisation in many countries. This has been a particular problem in the US and UK where household incomes have yet to regain pre-2009 levels.
At the other end of the income scale, by 4 January, captains of industry in the UK had already taken home more than the average wages for the whole year.
Business discovered its sense of “purpose” and vowed to do better by its stakeholders on both sides of the Atlantic. But this did not stop the outcry from the sector over proposed wealth taxes from US Democratic presidential hopefuls and threats to leave the country if Jeremy Corbyn ever became prime minister in the UK.
Here’s some of Tortoise’s coverage of Wealth from this year.
Good companies must also be good citizens
At Tortoise we tracked the shift in rhetoric by business on ethics and inclusive capitalism. We took this a step further in September with the launch of our own Responsibility Index, measuring FTSE 100 companies against the UN Sustainable Development Goals. We also engaged with the companies and discussed issues to address in future. The index will be released in full at the beginning of the year.
“What keeps me up at night is how much they say but just how little they actually do,” the United Nations official laments over the phone. “No one’s holding them to account.”
The “they” refers to big companies. In recent years, and especially since the financial crash, a broad consensus has arisen that capitalism has a responsibility to respect and enhance the rights of people and to ensure that the planet remains habitable.
Among the initial findings which can be released today are:
- 61 of the FTSE 100 reported lower emissions last year than the year before while 39 recorded increases;
- Only about one in 10 big multinationals undertook to buy all their power from renewable sources;
- 1 in 10 of the FTSE 100’s subsidiaries was registered in a tax haven;
- The FTSE 100 only reduced the gender pay gap by 0.3% between 2017 and 2018 – at this rate, it would take 53 years for them to equalise incomes;
- As of today there are 687 male directors on the FTSE 100 boards compared to just 334 women.
Read the full piece here.
Are you the waitress?
Diversity in the corporate sector was a theme we came back to in ThinkIns and our journalism. While the gender pay gap, which remains stubbornly entrenched at 17.3 per cent (for median gross hourly earnings for all workers), and power gaps at big companies persist, so too does discrimination in the City against women raising money for their own businesses.
After launching her software business in late 2015, Zara Nanu spent several years going from potential investor to potential investor with her PowerPoint presentation. Each time, she knew she would probably face another all-male panel. She knew that she’d likely be asked what comms experts call “defensive” questions about her unique selling point and her competitors, while male counterparts would be asked “positive reinforcement” questions about how they were going to grow their business. And she knew that for every £1 invested by UK venture capital firms less than 1p goes to women founders.
“It’s always difficult as you come out of that room feeling like you’re failing because you didn’t get the money, then a male team comes out and they do have the money,” she says.
“A lot of times at these pitching events, I’d be confused for the waitress,” said Nanu. “It changes the relationship slightly when they’ve just asked me for the wine and, all of a sudden, I’m pitching and asking for a million pounds.”
Nancy Roberts, founder of Umbrella Analytics, which also offers companies technology to report and analyse their gender pay gaps and corporate culture, says she has stopped pitching to mostly all-male panels because it was “not worth [her] time”.
Read the full piece here.
The curse of Softbank
While investors may shun female-led start-ups, there is still plenty of macho fervour out there for hubris and hype. Nowhere was this more evident than in the backing by Japan’s Softbank Vision Fund for so-called Silicon Valley “unicorns,” such as WeWork, Slack and Uber.
Softbank pushed billions of dollars into tech start-ups to turbo-charge their growth, even at the expense of profits. But its investments in the office rentals firm WeWork started to turn sour in September, throwing the fund’s whole strategy into doubt.
For technology executives gathered at the Langham Hotel in Pasadena, California, last month, no expense was spared. Long-term residents of the five-star property were cleared out and a private chef brought in to cater to more than 100 CEOs invited to the three-day retreat by SoftBank, the giant Japanese conglomerate that has turned Silicon Valley on its head.
John Legend, the Grammy-award winning singer, performed while a four-legged robot from Boston Dynamics, a SoftBank-backed company, stalked the 23-acre gardens. Visitors were handed a goody bag containing expensive gifts including a “sustainable” water bottle worth nearly $100, according to one person who attended the private event.
While the luxury was ostentatious, the message from SoftBank’s charismatic founder, 62-year-old Masayoshi Son, was plain. The days of not caring about profits or good governance were over, he warned the executives, who had all received backing from the bank’s huge venture capital fund. Now it was time to start making some money.
Read the full piece here.