LEGO Group's new supplier sustainability programme

The LEGO Group has unveiled a new Supplier Sustainability Programme to enhance collaboration with suppliers to achieve its climate goals.

This initiative includes setting and reporting on emissions reduction targets, forming a crucial part of LEGO's broader climate action plan. Last year, LEGO committed to achieving net zero emissions by 2050 and set an interim goal to reduce emissions by 37% by 2032. A significant challenge for LEGO is addressing Scope 3 emissions, which comprise over 99% of its carbon footprint and originate primarily from suppliers.

These emissions are particularly difficult to manage. For instance, LEGO recently abandoned plans to produce bricks from recycled rPET plastics due to challenges in reducing its carbon footprint. In addition to the new programme, LEGO announced earlier this year that a portion of bonuses for salaried employees will be tied to emissions reduction goals.

This will be measured using a new KPI that tracks carbon emissions from factories, stores, offices, and Scope 3 business travel. The company plans to expand this KPI to cover more Scope 3 emissions in the future.

“To put it simply, a net-zero world is simply not possible unless we find solutions that are greater than our own operations. We will not be able to meet our sustainability targets alone – we have to work in partnership with our suppliers. We want children to inherit a healthy planet and there’s no time to waste.” - Annette Stube, Chief Sustainability Officer at the LEGO Group

UK investors embrace ESG in investment decisions

UK investors are increasingly prioritising sustainability and ESG (Environmental, Social, Governance) considerations in their investment processes, as highlighted in KPMG’s 2024 Global ESG Due Diligence Report.

This growing focus on ESG has significantly elevated its importance in mergers and acquisitions (M&A). Ethical and long-term sustainability concerns are prompting UK investors to steer clear of sectors like tobacco, gambling, and fossil fuels.

Over 50% of surveyed investors indicated that ESG factors could be a "deal stopper." Globally, 57% of investors expect to incorporate ESG due diligence in most transactions over the next two years.

The impact of a four-day work week

A recent South Cambridgeshire District Council trial found that fewer workers quit, and applications for planning permissions and social welfare benefits were assessed more quickly.

Here are some recent impacts found on four-day work weeks:

Cambridgeshire Council: A 15-month trial of a reduced work week among 450 employees at South Cambridgeshire District Council showed promising results. Employees managed to complete five days' worth of work in just four days, maintaining the same pay. This shift led to quicker processing of planning permissions and social welfare benefits. Employee turnover decreased significantly, saving the council around £370,000 (€438,000) annually. Additionally, the employee's physical and mental health, motivation, and commitment improved.

Asda: Struggles In contrast, UK supermarket chain Asda faced challenges with a similar initiative. Their pilot program had employees working 44 hours over four days instead of five, for the same pay. However, workers reported feeling exhausted, with little energy left for their days off. As a result, Asda decided to scrap the four-day work week plans.

Greece: Greece has taken a different route by introducing a six-day work week for some 24-hour shift industries. This new system, which is optional for staff, aims to boost the economy. Workers opting in will receive 40% more pay for the additional work hours. In summary, while the four-day work week has shown success in certain settings, however, its implementation and results can vary significantly depending on the industry and specific work conditions.

Climate Change and rising food prices produce new challenges for Central Banks

Climate change is driving up food prices, causing growing concern among central banks worldwide.

A recent European Central Bank study predicts that annual food inflation rates could rise by up to 3.2 percentage points within the next decade due to higher temperatures.

This could result in an overall inflation increase of up to 1.18 percentage points by 2035. Extreme weather events and shifting weather patterns are impacting crop yields, from olives in Sicily to cocoa in West Africa, leading to higher production costs and consumer prices.

As central banks grapple with this persistent inflationary pressure, some economists are advocating for new inflation control tools beyond traditional interest rate adjustments.