@Risk

Researchers at Dartmouth University have found potentially harmful levels of arsenic in several commercial food products, including infant formula, cereal/energy bars and high-energy foods used by endurance athletes.

What’s arsenic, which is known to be both toxic and potentially carcinogenic, doing in food products like infant formula and cereal bars?

As strange as it sounds, the common denominator here appears to be organic brown rice syrup.

As an article at the Dartmouth website points out, food manufacturers have recently begun using organic brown rice syrup as an alternative to high fructose corn syrup for sweetening food.

But, most rice produced in the US is grown in southern states where the soil was previously used for cotton farming, and so treated with pesticides containing arsenic.

Here are a few of the –rather alarming –results from the Dartmouth research: (more…)

Many companies aren’t adequately integrating environmental, social and governance (ESG) issues with new SEC requirements, and that’s causing widespread SEC disclosure noncompliance, according to recent research by CSR Insight LLC.

The study, billed as the first independent, comprehensive technical study of how the SEC regime applies to ESG issues found that:

• More than a dozen SEC requirements potentially apply, for 10-K, 10-Q, 8-K, and other corporate SEC filings, including narrative disclosure and financial statement requirements, books and records requirements, and management certification requirements.
• There’s a substantial likelihood of widespread corporate noncompliance with one or more of these SEC requirements.

CSR Insight, which is an independent consultancy specializing in analysis of SEC and global financial regulation, global financial regulatory policy, ESG reporting frameworks, ESG capital market issues, and international corporate governance standards,  concluded that the problem is this: (more…)

Most European retailers consider expanded European cross-border e-commerce a medium or high priority for growth. However, many are struggling to navigate diverse local laws, regulations and practices.

A new study conducted by Accenture found that retailers wanting to grow cross-border online sales across Europe are challenged on several different fronts, including:

• The diversity of product returns laws  (cited by 47 percent)
• Difficulties in efficiently handling product returns cross-border  ( 44 percent)
• The cost of compliance with different national laws regulating consumer transactions, such as distance selling, or data transfer requirements (42 percent)
• The differences in labor laws  as being a key challenge (42 percent)
• The cost of compliance with different national fiscal regulations (42 percent)
• Differences in packaging and labeling laws (38 percent)
• Differing VAT levels between markets (34 percent)

As Accenture describes in its press release, the differences between packaging and labeling laws can be particularly problematic. Retailers that have one common inventory for both their store and internet operations are required to put the same label on all inventory and in multiple languages, regardless of the goods’ specific destination. What’s more, while many European markets simply require retailers to report how much packaging they use annually, some may require detailed packaging information at the individual product level.

Still, the increasing willingness of European consumers to use digital channels as part of their shopping experience is driving retailers to focus on delivering both efficient online, cross-border operations and revenue growth in this area.

These are reasonable aspirations. (more…)

A group of nine companies is testing newly developed Key Performance Indicators (KPIs) designed to assess reputational risks and operational shortcomings associated with labor and human rights factors in corporate supply chains.

Developed as part of the Fair Labor Association (FLA) and Harvard Law School?s Pension and Capital Stewardship Project and with funding from the Investor Responsibility Research Center (IRRC) Institute, this KPI initiative is the first effort of its kind to create a standardized method to assess such risks.

The nine companies involved collectively source from 1,755 factories that employ about 1.8 million workers in 62 countries. They are testing KPIs in the following areas, with a host of detailed underlying information for each category: (more…)

Pursuing deals in growth markets can be tremendously beneficial.  But, doing business in growth markets is inherently more risky, too.

What can your company do to take advantage of the benefits (low cost manufacturing, access to natural resources, market access for basic global products, buyers with access to core operations, etc.), while mitigating potential pitfalls?

For starters, you may want to read PwC’s new study, Getting on the Right Side of the Delta: A Deal-maker’s Guide to Growth Economies. After analyzing 200 deals (both publicly announced and private ones for which PwC was an advisor) and interviewing 20 leading dealmakers around the world, PwC found that:

• The majority of deal risks typically relate to one or more of three key elements: the asset itself, the seller, or the government.
• The most common barrier to deal completion is an inability to get comfortable with valuations. 40 percent of failed deals in PwC’s data set fell victim to valuation concerns.
• The most common problems that emerge after a deal closes concern partnering, causing 30 percent of problems post-deal.  Beyond partnering, the same issues that prevent deals from closing also frequently emerge post-deal (direct government interference, problems with financial information and non-compliant business practices).

Fortunately, PwC’s report also includes five key recommendations for dealmakers when pursuing deals in growth markets. PwC advises dealmakers to: (more…)