As a result of a huge surplus of petrodollars in the United Arab Emirates (UAE), "a secretive, government-controlled investment fund is helping to shift the balance of power in the financial world," explains the World Business section of today’s New York Times. The Abu Dhabi Investment Authority is investing in markets in every region of the world and quietly playing a role in the success, or failure, of companies on a global scale.

Sovereign funds are state-owned funds that manage state savings for the purpose of investment. Basically, they are pools of money governments use to invest for profit, and, generally, these investments are made in foreign companies. For a more in-depth explanation, see the Council on Foreign Relations' Sovereign Wealth Funds fact-sheet.

Last month, IPS news reported on recent trends toward sustainability and green business within the global economy. According to the January "State of the World 2008" report released by the Worldwatch Institute, "innovative green efforts by governments and business are becoming commonplace." It seems that almost daily, large corporations are announcing their green efforts, however Worldwatch's report warns, many of these announcements are greenwashing.

Photo: J. Mark Bertrand (flickr)

"(Product)RED," a campaign started by U2 front man Bono, combines consumerism and altruism. In the year since its start, American consumers have generated over $22 million to fight HIV/AIDS through the purchase of "(Product)RED" branded ipods, t-shirts and other products. While the campaign has had a positive effect by providing much needed funds to health clinics in Rwanda, Ghana and Swaziland, critics of RED remain skeptical.

According to Rwandan officials, Red contributions have built 33 testing and treatment centers, supplied medicine for more than 6,000 women to keep them from transmitting H.I.V. to their babies, and financed counseling and testing for thousands more patients.

Ben Davis of San Francisco, who created a Red parody online that says “Buy(Less),” is encouraging consumers to give more directly to nonprofits that support AIDS programs in Africa. “I just think that increased consumption in America can’t be the only way to solve Africa’s problem,” Mr. Davis said.

An Economist article from late January looks at the popularly supported concept of corporate responsibility and what that means for corporate profits.

If companies need to be vigilant about the limits of CSR, the same applies even more to society as a whole. A dangerous myth is gaining ground: that unadorned capitalism fails to serve the public interest. Profits are not good, goes the logic of much CSR; hence the attraction of turning companies into instruments of social policy. In fact, the opposite is true. The main contribution of companies to society comes precisely from those profits (and the products, services, salaries and ideas that competitive capitalism creates). If the business of business stops being business, we all lose.

Bill Gates gave a major speech at the World Economic Forum in Davos on Wednesday, calling for creative capitalism to do a better job of serving the world's poor as well as the rich.

In a lengthy interview he gave with the Wall Street Journal prior to the speech, Gates expressed concern for how "capitalism, while so good for so many, is failing much of the world." His recommendation is for companies to dedicate a larger percentage of their resources toward figuring out how they can make money by doing business with and improving the lot of the neediest third of the world's population.

Video of the entire speech is available here.

Today Business Week takes a look at Toyota and corporate responsibility:

Harish, who comes from a family that lives below the poverty line of $177 in annual income, was a good student but had no particular ambition. Then, last April, his schoolteacher alerted him to an advertisement by Toyota in the local paper. The automaker was inviting applications from 17-year-old, poor and needy students for factory training. It was offering free board, lodging, and education, plus a monthly stipend of $38. There were 5,000 applicants, and Harish was one of 64 boys from the southern state of Karnataka who made it to Toyota Tech, the training institute that opened last August as Toyota's first outside of Japan.

He now wants to be an automotive engineer. "I am so happy and can't believe," says Harish in his broken English about how his life and dreams have changed. They sure have. His mother and grandmother earn 65¢ daily as farm laborers, a brother is a bus cleaner, and a sister is training to be a nurse. But Harish is determined to change his life thanks to Toyota. In the three months he has been at the institute, he has saved $8 to give to his mother. "I want to make her proud," he says, outlining his determination to excel in his three-year course and bag the $180 and $230 fellowships for assiduous students.

Photo: Tahir Hashmi (flickr)

The world’s cheapest car has just been rolled onto the showroom floor in India. Known informally as the People's Car, Indian automaker Tata Motors stated that its goal was to give access to people who otherwise could only afford to drive scooters by selling a car that cost only $2,500, reports Nation Public Radio.

"I observed families riding on two-wheelers — the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family," Company Chairman, Ratan N. Tata said.”

The car is said to meet all safety and environmental requirements for India, with reasonably low emissions and a solid gas mileage of 50mpg. However, an October report by The New York Times cites worries about the safety and environmental implications of a car with no airbags that will be accessible to millions of first-time drivers. Pollution and traffic are already big issues in the country, where “nearly 60 percent of India’s cities have pollution levels that are considered critical.”
Is it possible to create an ultra-cheap green car, one that will meet the strictest fuel emission standards with the potential to actually reduce pollution levels?