Aurelia Butler

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New regulations on human rights are forcing global companies to address concerns about modern slavery and tackle problems in their supply chains.In Europe, a landmark human rights rule was adopted by the EU in July 2024. The Corporate Sustainability Due Diligence Directive (CSDDD) requires European companies — and some businesses abroad but with significant turnover in the EU — to identify and prevent possible human rights abuses. This applies to product manufacturing supply, raw materials, and other aspects of companies’ supply chains. The CSDDD builds on human rights due diligence legislation that is already in force in France, Germany, and the Netherlands. And, although the CSDDD does not come into effect more widely until 2027, big global companies in the UK, US and elsewhere have added language to their regulatory filings warning investors about the looming regulation. The law has been hailed by activists as one of the most significant advances in years. It “should send a message to all companies everywhere that they must respect human rights”, Amnesty International said this year. The rule also addresses the concerns of some large Dutch pension funds that have raised the alarm about slavery in corporate supply chains.As a result, the CSDDD will become an important issue for investors, because companies that fail to take modern slavery seriously will face increasing legal risks, according to the Minderoo Foundation, an Australian philanthropic organisation. “Investors play a crucial role in driving ethical business practices and ensuring companies respect human rights in their operations,” Minderoo said in an October report.Europe’s new rule joins the US’s 2021 Uyghur Forced Labor Prevention Act. While the CSDDD applies globally, the US law targets allegations of forced labour in the Xinjiang region of China, home to the Muslim Uyghur people. Imported Xinjiang goods are prohibited, although there can be exceptions. Up to June 2024, the Uyghur US Customs and Border Protection had stopped more than 4,000 shipments of goods valued at more than $3.6bn for enforcement review, according to the agency.These US regulations are already posing problems for businesses and investors. In May, the US Senate published a report alleging that BMW and Jaguar Land Rover cars and components imported to the US included a part made by a company linked to Uyghur forced labour. The senators had investigated eight carmakers to find out if their supply chains included one component made using forced labour from China’s north-western Xinjiang region. BMW was found to have imported about 8,000 Mini Cooper cars containing components made by a Chinese company that had been put on the US forced-labour ban list. The report also noted that JLR continued to import components even after being informed. Both companies said they were taking action to fix their compliance issues.While these EU and US laws are new, human rights due diligence regulations have a long history. The 2010 Dodd-Frank law to reform Wall Street forced thousands of companies to identify any “conflict minerals” from the Democratic Republic of Congo and nearby countries. Earlier efforts to shed light on human rights concerns in the minerals industry had included the Kimberley Process — a global effort started in 2003 to increase transparency in the diamond supply chain after diamonds were used to fund a series of brutal civil wars in Africa in the 1990s.With the CSDDD still a few years from coming into force, “many [companies] are paying no attention to the new rules”, says David Birchall, a senior lecturer at Macquarie University in Australia. But others are already on their way towards compliance thanks to local laws, he adds. Volkswagen, for example, has staffers to ensure it complies with the German human rights due diligence law. “The key thing for multinationals is to know which laws they are covered by, as well as to begin preparing for the broader and often more stringent CSDDD,” Birchall says. “For US firms, this depends on where they do business, their sector, [and] their size,” he adds. “It is complicated.”It is so far unclear whether Donald Trump’s incoming administration might try to exempt US companies from CSDDD or other European human rights requirements. The president-elect did, however, support the Uyghurs in his first term. His administration banned exports to some Chinese companies involved in surveillance of the Muslim minority and imposed visa restrictions on officials implicated in detentions.Republicans, who will have control of Congress and the Senate, have overwhelmingly supported tough legislation to combat the mass detention of Uyghurs and demonstrated a willingness to pressure Trump to take action. “Certainly, the Uyghur forced labour prevention act had bipartisan support before,” says Rachel Chambers, a professor at the University of Connecticut. “The Chinese, of course, view laws like this as geopolitically motivated.”A woman in a Uyghur neighbourhood in Xinjiang. Western car companies were criticised by a US Senate report for using parts made by a Chinese group on a forced-labour ban list More

As the global race for renewable energy accelerates, the billions of dollars of subsidies that the US, Europe and China dole out to vie for market dominance are likely to have implications for investors.This year, the EU adopted the Net-Zero Industry Act, which aims to make investing in solar, wind and other clean technologies more appealing. The legislation eases bureaucracy, accelerates project approvals, and targets reaching 50mn tonnes of carbon dioxide storage capacity in Europe by 2030. Investors will have seen that these subsidies have begun to prompt companies to take action. For example, ArcelorMittal, the world’s second-largest steelmaker, has started testing a carbon capture project in Ghent, Belgium, according in a Morgan Stanley report in June. This facility will test the feasibility of a full-scale carbon capture at the site as the Act comes into effect, Morgan Stanley said.Asset manager Invesco said the legislation is “expected to be a game-changer for EU companies transitioning to net zero emissions”, in its own report in August. The law will accelerate demand for European-based manufacturers, such as solar cell makers. “The €375bn in grants, tax credits, direct investments and loans from the NZIA will help to spur additional capital and operating expenditures,” the report concluded.The EU’s action highlights how the bloc is eager to match renewable energy subsidies adopted by the US and China in recent years. The Biden administration’s 2022 Inflation Reduction Act angered many European officials, who worried the $369bn package would lure cleantech businesses and investments away from their region. It even prompted the EU to accuse Washington of breaching World Trade Organization rules. The head of carmaker Stellantis and other European executives called for Brussels to consider reciprocal measures, or change its rules to respond to the IRA.The EU should “take action to rebalance the playing field . . . [and] improve our state aid frameworks”, European Commission president Ursula von der Leyen said shortly after the US adopted the IRA. The EU’s net zero law was quickly proposed in 2023 to counter the American legislation. “There is a risk that the IRA could lead to unfair competition,” von der Leyen warned.President Joe Biden announces a $3bn investment from the Inflation Reduction Act in October to help reduce pollution from US ports More

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NEW YORK (Reuters) -Several key players in President-elect Donald Trump’s new cryptocurrency venture head to Abu Dhabi on Monday for the largest bitcoin gathering in the Gulf region as the digital currency sets record highs.Speakers include the president-elect’s son Eric and billionaire Steve Witkoff, the new White House envoy for the Middle East and co-founder of World Liberty Financial, a crypto platform launched in September that Donald Trump and his family helped form.Eric Trump will deliver Tuesday’s keynote address at the Bitcoin MENA conference, which is projected to draw more than 6,000 people, and will then hold a “whale-only” chat in the conference’s VIP lounge, according to the event’s agenda.Witkoff will also speak separately to that more exclusive crowd, which requires a $9,999 “whale” pass, a nickname for large players who have potential to move a market.The president-elect is World Liberty Financial’s chief crypto advocate, and sons Eric, Don Jr. and Barron are ambassadors, according to the WLF website. Company filings show Donald Trump is entitled to 22.5 billion WLF tokens and a share of its revenues. “The bitcoin conference carries a lot of significance for crypto as it’s one of the longest-running conferences focused on bringing our industry together,” said Marshall Beard, chief operating officer of Gemini, the crypto exchange founded by Trump backers Cameron and Tyler Winklevoss.     “It’s been incredible to see the rise of bitcoin alongside the growth of the conference … and crypto became a major campaign issue in this year’s presidential election.”Other speakers also have close ties to World Liberty Financial, including Justin Sun, the 32-year-old Chinese founder of blockchain platform Tron.Three weeks after Trump won the Nov. 5 election, Sun posted on X that he bought $30 million worth of WLF tokens, making him the venture’s largest investor. Sun was charged with crypto-related fraud and securities violations under the Biden administration. The Gulf gathering is occurring at an inflection point for the industry as Trump, once a crypto skeptic, has vowed he will be the “crypto president” and make America the new “crypto capital of the planet.” Buoyed by these promises, bitcoin smashed records last week when it hit $100,000. Trump also named a White House czar for artificial intelligence and cryptocurrencies, former PayPal (NASDAQ:PYPL) executive David Sacks, a close friend of Trump adviser and megadonor Elon Musk. Musk, whose companies include X, SpaceX and Tesla (NASDAQ:TSLA), spent more than a quarter of a billion dollars to help elect Trump in 2024, records show. Other technology and digital asset veterans also gave millions to candidates friendly to the industry, according to analytics firm Breadcrumbs. Trump’s 2016 campaign manager, Paul Manafort, will address the conference on “A Life of Politics with the Man Closest to Donald Trump.” Binance founder Changpeng Zhao, who served a four-month U.S. prison sentence this year for crypto-tied money-laundering law violations, will also hold a whale session at the conference. Trump, his family members, other speakers and their firms did not respond to requests for comment. More

SYDNEY (Reuters) – Asian shares were dragged by a slide in South Korea on Monday ahead of a packed week of central bank meetings that should see borrowing costs take a step lower, while U.S. inflation data are the last hurdle to a further policy easing there.Political tumult in France and South Korea was joined by the fall of Syrian President Bashar al-Assad’s regime, which complicated an already fraught situation in the Middle East.Still, the mood was generally upbeat after U.S. November payrolls showed enough of a recovery to assuage concerns of a slowdown, but not so much as to forestall a rate cut from the Federal Reserve next week.”Incoming data support our call for global growth lift into year-end, despite a slipping Euro area and building political stress,” said Bruce Kasman, head of economic research at JPMorgan.”We expect policy rates in Canada, Euro area, and Sweden to drop to 2% or lower over the coming year, while US and UK rates settle close to 4%,” he added. “This month’s meetings should point in this direction.”Futures imply an 85% chance on a quarter-point easing at the Fed’s Dec. 17-18 meeting, up from 68% ahead of the jobs figures, and have a further three cuts priced in for next year.That outlook combined with the bull run in tech stocks to boost the Nasdaq market by over $1 trillion in value last week alone. On Monday, S&P 500 futures and Nasdaq futures were both little changed.MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%. South Korean stocks fell 1.7% even as authorities pledged all-out efforts to stabilise financial markets amid uncertainty over the fate of President Yoon Suk Yeol.Japan’s Nikkei firmed 0.4%, helped by an upward revision to economic growth. Asia will also be alert to data on Chinese inflation later in the session. The consumer price index is seen slipping 0.4% in November, while the annual pace is expected to tick up to 0.5%.China’s Central Economic Work Conference is also scheduled for this week, though markets are not sure if any new policies will be announced.The U.S. consumer price report is out Wednesday and the core is seen holding at 3.3% for November, which should be no impediment to a rate easing.CENTRAL BANKS GALOREAmong the many policy meetings this week, the European Central Bank is fully expected to cut by 25 basis points on Thursday, with a one-in-five chance of 50 basis points.”With geopolitical uncertainty high and conflicting signals from hard and soft data, monetary policy remains the only game in town to support economic activity, especially in the absence of strong political leadership in Paris and Berlin,” said Barclays (LON:BARC) economist Christian Keller.”We continue to expect consecutive 25bp cuts until June next year, and then cuts in September and December to reach a terminal rate of 1.5%.”Markets are leaning toward a half-point cut from the Swiss National Bank on Thursday given slowing inflation and a desire to stop the franc reaching record highs on the euro.Canada’s central bank is now expected to ease by a half point on Wednesday following a shock rise in unemployment for November. 0@CADIRPR >The Reserve Bank of Australia holds its meeting on Tuesday and is one of the few seen standing pat, while Brazil’s central bank is set to hike again to contain inflation.In currency markets, the dollar index was flat at 106.010 after edging up 0.2% last week. The euro stood at $1.0557, having bounced as high as $1.0629 on Friday before the job figures boosted the dollar broadly. [USD/] The dollar was steady on the yen at 149.92, having held to a 148.65 to 151.23 range last week as investors await further guidance on the prospect of a near-term rate hike from the Bank of Japan.Geopolitical uncertainty helped gold edge up 0.4% to $2,643 an ounce, but it faces resistance at $2,666. [GOL/]Oil prices gained some support from events in the Middle East, though markets are preoccupied with the risk of weak demand, particularly from China. [O/R]Brent added 9 cents to $71.21 a barrel, while U.S. crude rose 12 cents to $67.32 per barrel. More

(Reuters) – Demand for workers in Britain collapsed last month after the new Labour government’s first budget, a survey published on Monday showed, adding to other signs of the impact of the tax increases on employers.The Recruitment and Employment Confederation trade body and accountants KPMG said their index of demand for staff slid to 43.9, the lowest reading since August 2020, from October’s 46.1.Only the COVID-19 pandemic, the global financial crisis, and the immediate aftermath of the Sept. 11 attacks on the United States resulted in worse readings.Permanent staff placements fell in November at the fastest rate since August 2023, although the pace of decline for temporary workers eased slightly from October, REC said. “It should be a surprise to no-one that firms took the time to re-assess their hiring needs in November after a tough budget for employers,” REC Chief Executive Neil Carberry said.”The real question now is whether businesses will return to the market as they go into next year with greater certainty about the path ahead.”Last week REC issued an “urgent warning” over the government’s separate Employment Rights Bill which aims to reform the labour market and raise living standards, describing it as “undercooked”.Finance minister Rachel Reeves, who announced her budget on Oct. 30, will hope that Monday’s survey represents a one-off dip rather than the start of a longer downturn in the labour market.The REC survey is a diffusion index which can be prone to sharp but short moves around big political and financial events.But employers have said the tax rises on businesses will have a deeper impact.Last week, the Confederation of British Industry cut its estimate for economic growth next year due to the higher social security contributions, although other forecasters such as the OECD have said other measures in the budget will raise growth.A Bank of England survey showed 54% of businesses said they would respond to their higher costs from the budget by reducing employment, while 38% expected lower wages.Separately on Monday, a survey from research company Incomes Data Research showed the median pay deal offered by private sector employers slipped to 3.9% in the three months to October from 4.0% previously.The BoE is watching for signs of diminishing inflation pressure in the labour market.Reeves has described the budget as a one-off to fix the public finances and pay for improved public services and has promised businesses stable and predictable tax policy to help them plan and invest.Jon Holt, group chief executive of KPMG UK, said expected interest rate cuts in 2025 and the government’s investment plans offered reasons for optimism.”This should give businesses greater confidence which may help stabilise the labour market,” Holt said. More