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Grocer to spend $1.3 billion to lower carbon emissions to a net zero

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Dinendra Haria | SOPA Images | Getty Images

One of the U.K.’s biggest grocery chains plans to invest £1 billion ($1.3 billion) across 20 years to reduce its carbon emissions to a net zero by 2040.

In an announcement on Tuesday, Sainsbury’s said the money would focus on cutting carbon emissions, plastic packaging, food waste and water use. At the same time the business will look to increase sustainable practices such as recycling.

In order to lower its carbon emissions, Sainsbury’s said it would boost its renewable energy usage but cut down on overall energy use. The percentage of its fleet using “alternative zero and low carbon fuels” will be upped to 20% by the year 2025, while a greater use of natural refrigerants and “innovative technology” will make fridges more efficient.

To help achieve its aims, Sainsbury’s said it would work with the Carbon Trust – a not-for-profit focused on the transition to a low carbon, sustainable economy – to “assess emissions and set science-based targets for reduction,” with public progress reports issued every six months. More broadly, the company said its targets would align it with the Paris Agreement’s goal to restrict global warming to 1.5 degrees Celsius.

On the plastics front, Sainsbury’s said it would halve its use of plastic packaging by 2025. By the end of this year, it will replace polystyrene packaging and dark colored plastic — which is tough to recycle — with “recyclable alternatives.”

The business said it would recycle a larger amount of its own operational waste and “continue to expand and provide facilities to help customers recycle unwanted clothing, metal cans, glass, paper, batteries and other materials.”

The CEO of Sainsbury’s, Mike Coupe, said the company had “a duty to the communities we serve to continue to reduce the impact our business has on the environment.”

Commenting on Tuesday’s announcement, Mike Childs, head of policy at Friends of the Earth, said it was “encouraging” to see the supermarket “stepping up to the plate on the climate emergency — the rapid transition to a net zero economy is urgently required.”

“Supermarkets have a huge influence on our personal carbon footprints, so the more they can do to embrace and promote greener lifestyles the better for us all,” he added.

Sainsbury’s is the latest U.K. retailer to announce efforts to become more sustainable. Last week Tesco — the U.K.’s biggest grocer — said it would stop selling multipacks of tinned food wrapped in plastic.

Instead, it will sell the tins individually, with customers able to purchase plastic-free multibuy deals instead. This initiative will start being introduced to stores from March, with Tesco claiming it will help remove 67 million pieces of plastic.

Grand ambitions, but big challenges

While the ambition of these aims is laudable, there are undoubted challenges for big businesses looking to reduce their impact on the environment. The sheer scale of these operations means that sweeping changes can take years to come about.

Take energy consumption. Tesco, for example, purchased or generated more than 3 million megawatt hours of renewable energy in 2018/19. In the same period, non-renewable energy consumption amounted to more than 6.1 million megawatt hours. In its sustainability update for 2018, Sainsbury’s said that 17% of its electricity was derived from renewable power purchase agreements or onsite renewables generation.

In another sector, the Inter Ikea Group recently said it would invest 200 million euros to accelerate its transition into what it describes as a “climate positive business.”

The group, which among other things develops and supplies Ikea’s product range, said the money would focus on two areas: investing in schemes “aimed at removing and storing carbon through reforestation and responsible forest management”; and using renewable energy in its supply chain.

Again, there is work to be done if Ikea is to achieve its goals. In its sustainability report for the 2018 fiscal year, Ikea said its climate footprint was estimated to be 26.9 million tons of carbon dioxide equivalent. This is an increase of 2.8% compared to the 2016 fiscal year, a rise Ikea put down to “the growth of the Ikea business.”

In the report, Ikea also noted that “decoupling” its growth from greenhouse gas emissions would “take time,” adding that it expected emissions to “increase for a few years before decreasing.”

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Facebook’s Zuckerberg meets EU’s competition chief ahead of new A.I. rules

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Facebook CEO Mark Zuckerberg is meeting Europe’s competition chief in Brussels Monday, at a time when regulators in the region are preparing new rules that could impact the social network’s business.

The European Commission, the EU’s executive arm, is due to unveil new regulations on artificial intelligence (AI) Wednesday. Media reports suggest the EU could go as far as a temporary ban on the use of facial recognition. Facebook is one of many U.S. tech giants that have invested in A.I. Zuckerberg’s firm recently bought the British A.I. company Deeptide and the London-based computer vision start-up Scape Technologies.

Zuckerberg’s visit also happens at a time when European regulators are assessing whether Facebook’s data practices have disrespected competition law. Margrethe Vestager, the EU’s competition chief, is also looking at Google and Amazon data use in separate probes.

A Facebook spokesperson told CNBC Monday that Zuckerberg is meeting “with European decision-makers in Brussels to discuss a framework for new rules and regulation for the internet.” Shares of Facebook are up by about 30% over the last 12 months.

Facebook’s CEO Mark Zuckerberg answers questions about the improper use of millions of users’ data by a political consultancy, at the European Parliament in Brussels, Belgium, in this still image taken from Reuters TV May 22, 2018

ReutersTV | Reuters

Zuckerberg said in the Financial Times Sunday that private companies like Facebook need help from regulators in defining certain aspects of their work. Facebook’s chief has called for specific regulation when it comes to elections, harmful content, privacy and data portability.

“Mark Zuckerberg has changed his tune somewhat,” Seth Wallis-Jones, principal analyst at Omdia, told CNBC’s “Street Signs” Monday.

“He has been looking at four different areas, he has been talking about things like election integrity,” Wallis-Jones said, adding that Zuckerberg is “trying to avoid, I think, looking at the competition and the taxation aspects, which are probably the most expensive.”

Facebook and other big U.S. tech firms have been under pressure in Europe, but also to some extent in the United States. The Federal Trade Commission (FTC) said last week it would be examining prior acquisitions by Alphabet, Amazon, Apple, Facebook and Microsoft.

Wallis-Jones also told CNBC that on their own these acquisitions are not anti-competitive, “but if you look at pattern-behaviour maybe it does build them into something bigger.”

Apple CEO Time Cook has previously told CNBC that it acquires a company every two to three weeks on average, looking for talent and intellectual property.

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Victoria Beckham always gets ‘nervous’ in the run up to fashion shows

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British fashion designer Victoria Beckham presents for her Autumn/Winter 2020 collection on the third day of London Fashion Week in London on February 16, 2020.

Daniel Leal-Olivas/ AFP via Getty Images

Fashion designer Victoria Beckham said she always gets nervous in the run up to her fashion shows.

“It doesn’t get any easier. If anything, I think it gets, it gets more difficult,” Beckham told CNBC’s Tania Bryer, when she caught up with the designer after her London Fashion Week show on Sunday.

“You literally don’t sleep for about five nights in the lead up to the show,” she added.

The former Spice Girl, who launched her eponymously named brand in 2008, said she was “a little bit innocent” about this when she first ventured into the fashion industry.

Despite what she describes as an “intense” week of preparation, Beckham said it was “fun” and “exciting” to see the “clothes come to life” in the show.

“And it’s about challenging myself every season,” said Beckham, adding that she spent a lot of time “agonizing over every single detail” of her collection and catwalk show.

The designer also explained how she was using her reach on social media to promote her brand. On Instagram, for instance, she has 28 million followers and has launched a filter game which asks users “Which VB are you?”

“I take my job very seriously, but I do like to have fun, and I think that you see that on social media,” she said, explaining that she also tried to do this in the colors and prints used in her fashion collections.

The designer rose to fame in the 1990s, first becoming known as “Posh Spice” in British girl band the Spice Girls. Marrying soccer star David Beckham cemented her place in the public eye but she then went on to develop her status as a fashion icon.

Beckham’s brand made nearly £36 million ($47 million) in revenue in 2018, according to the latest company accounts.

Sustainability

Speaking about the increasing importance of sustainable fashion, Beckham said the industry was “still educating” itself but she believed that it did recognize that it had a responsibility to tackle this issue.

She pointed out that her recently launched line of beauty products, focused on using “clean” ingredients, uses packaging that is made entirely of post-consumer waste. Beckham also opted for sending digital invites out to her show instead of posted invites.

Beckham said she had a “big plan” for the expansion of her beauty and make-up lines.

She also touched on the effect of coronavirus, in limiting travel from China and the impact this was having with designers seeing fewer people at their shows at this year’s various fashion weeks.

As a “big market” for her brand, she said it had affected business but that this was also the case for everyone in the fashion industry.

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Coronavirus could impact 5 million companies worldwide, research shows

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People wearing protective face masks queue to order food from a stall in Shanghai on February 14, 2020.

Noel Celis | AFP | Getty Images

The new coronavirus outbreak and subsequent shutdown of huge swathes of China could impact more than 5 million businesses worldwide, according to a new study.

A special briefing issued by global business research firm Dun & Bradstreet analyzed the Chinese provinces most impacted by the virus, and found they are intricately linked to the global business network.

The affected areas with 100 or more confirmed cases as of February 5 are home to more than 90% of all active businesses in China, according to the report, and around 49,000 businesses in these regions are branches and subsidiaries of foreign companies.

Almost half (49%) of the companies with subsidiaries in impacted regions are headquartered in Hong Kong, while the U.S. accounts for 19%, Japan 12% and Germany 5%.

As of Monday, over 70,000 cases of the virus have been confirmed in China, resulting in 1,770 deaths, according to the Chinese National Health Commission.

Dun & Bradstreet researchers found that at least 51,000 companies worldwide, 163 of which are in the Fortune 1000, have one or more direct or “tier 1” suppliers in the impacted region, while at least 5 million — and 938 in the Fortune 1000 — have one or more “tier 2” suppliers.

The impact on businesses in China and around the world is already dragging down economic growth forecasts for the year.

In a research note published Monday, Moody’s revised down its global growth forecasts by two-tenths of a percentage point, expecting G-20 economies to collectively grow at an annual rate of 2.4% in 2020 with China slipping to 5.2%.

This assumes a baseline forecast that the spread of the virus is contained by the end of the first quarter, restoring “normal economic activity” in the second quarter. However, the global economic toll would be “severe” if the rate of infection and rising death toll do not abate, with international supply chain disruptions amplifying the shock.

“There is already evidence albeit anecdotal – that supply chains are being disrupted, including outside China. Furthermore, extended lockdowns in China would have a global impact given the country’s importance and interconnectedness in the global economy,” Moody’s Vice President Madhavi Bokil said in the research note.

The Dun & Bradstreet report identified that the top five major sectors, accounting for more than 80% of businesses within impacted provinces, were services, wholesale trade, manufacturing, retail and financial services.

Dun & Bradstreet hypothesized that a major portion of Chinese employment and sales originate from companies within the impacted region.

The impacted provinces of, for instance, Guangdong, Jiangsu, Zhejiang, Beijing and Shandong account for 50% of total employment and 48% of total sales volume for the Chinese economy.

The Chinese economy constitutes around 20% of global GDP (gross domestic product) and analysts estimated that if containment of the outbreak is delayed beyond the summer, the “cascading effect” might cause a drag of around one percentage point on global GDP growth.

“No matter which scenario plays out, the Hubei region, China, and the global economy are indicated to see a churn in their business population and some lackluster employment and revenue growth in the near-term,” the company said in the report.

“When (not if) containment and eradication is achieved, factors within the impacted geography are bound to generate economic activity with consumers, satisfying pent-up demand once improved conditions are underway. The sum of the efforts to revitalize the region will place the global economy back on track for sustained growth.”

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