ESG

Guest view: Voluntary carbon markets carry risks

21 Jan 2021

Surging demand for carbon credits is a positive sign of private sector interest in addressing climate change. But it makes no sense to scale up voluntary markets if it’s not clear what these traded commodities actually represent. Or how they will help meet global climate goals.

Corona Capital: ESG investing, U.S. moves, P&G

20 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: ESG opens up investing opportunities; home values in U.S. resort towns rise faster than rural areas; and Procter & Gamble cleans up.

New Rio Tinto boss has Mongolian bullet to bite

18 Jan 2021

Atop Jakob Stausholm’s to-do list is sorting out the miner’s troubled $10 bln Oyu Tolgoi copper project. Satisfying Ulaanbaatar, pushy hedge funds and minority shareholders at once will be impossible. Raising equity and reworking a sticky loan structure are the least-bad options.

Corona Capital: Inflation, Poshmark

14 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Breakingviews panel predicts the end of the free-money era; and Poshmark’s IPO looks overdressed.

Data centres will become green activists’ target

24 Dec 2020

Server farms and networks each use around 1% of the world’s electricity – more, for now, than electric vehicles. That could hit double-digits by 2030 thanks to 5G and other trends, making related emissions a problem. Poor disclosures put Amazon and peers in ESG investors’ sights.

Viewsroom: Predictions and prescriptions (Part 1)

23 Dec 2020

Governments will become activist investors; U.S. airlines will merge; data centres will be the new ESG target; energy giants to consider renewable spinoffs; Tesla will buy Daimler; European soccer gets more American and more. Rob Cox, Peter Thal Larsen and Lauren Silva weigh in.

Big Oil will cash in on sun and wind

21 Dec 2020

Covid-19 and ESG have crushed the stock prices of companies like Total and BP. Listing their growing renewables businesses would help capitalise on inflated valuations. There’s a hedge of sorts: if the spinoffs don’t work they can be bought back on the cheap, Iberdrola-style.

Guest view: Woke markets present growing dangers

18 Dec 2020

The politicisation, and even weaponisation, of ESG investing is a concern, argues Frank Sixt, finance director at CK Hutchison. Exclusionary strategies are too prone to populist influence and ratings are chaotic. Absent quick changes, capital allocation distortions will rise.

Rio’s new CEO reflects its lack of wiggle room

17 Dec 2020

Finance director Jakob Stausholm is the surprise choice to lead the $126 bln miner. Rio’s self-imposed difficulties in Mongolia and Australia meant an outsider might have been preferable. But given Rio may feel the need to soon replace its chairman, continuity is also important.

Heathrow expansion faces long Covid-19 quarantine

16 Dec 2020

Britain’s Supreme Court cleared the way for the London airport to build a third runway, boosting its capacity by two-thirds. The pandemic-induced collapse in air travel makes passenger forecasts obsolete. Even if demand recovers, airlines will struggle to cover the extra costs.

The Exchange: Guy Hands on private equity’s future

15 Dec 2020

The British buyout baron, best known for his disastrous purchase of music group EMI in 2007, now focuses on more modest deals. He joins Liam Proud to discuss Covid-19, ESG, and why the private equity industry’s returns are likely to fall.

Sheriffs take overdue ride into ESG wild west

15 Dec 2020

French and Dutch regulators have called for greater oversight of ratings and products that gauge companies’ green credentials. Nailing down a coherent approach will be tricky. But the breakneck growth of sustainable investing makes clearer ground rules critical.

Corona Capital: New York City, Fed/climate change

15 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: New York City’s exodus puts local government in a tight spot; the Fed’s belated move shows a change in Washington.

Unilever inches head above climate change parapet

14 Dec 2020

The group will follow Spain’s Aena in granting investors a say on green transition plans. As with advisory votes on pay, letting shareholders take potshots at strategy is good governance. Unilever’s scope for strife is less than would be the case in a sector like oil, though.

Rio Tinto’s CEO search just got even harder

10 Dec 2020

A scathing government report over the Australian miner’s destruction of Aboriginal sites calls for sweeping changes. It portends a long slog to repair the $120 bln company’s reputation. Corporate governance and climate issues add to the daunting challenges concerning growth.

Corona Capital: Gaming M&A, Beauty’s bold face

9 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Consolidation in video games reaches the next level as Sweden’s MTG buys Hutch Games for $375 million; and Spanish cosmetics, fashion and perfume group Puig predicts revenue will double by 2023.

UK’s cheaper zero-carbon route comes at right time

9 Dec 2020

Decarbonising the British economy could cost less than 1% of GDP a year, Britain’s climate adviser reckons, well below its previous estimates. Politicians still need to act on the plan. But a credible roadmap is a guide for others ahead of next year’s UK-hosted global conference.

Funky debt bonanza is breeding complacency

8 Dec 2020

Companies from BP to Gazprom are issuing more bonds that count as equity than ever before. Low rates and investors’ thirst for yield explain why, yet the benefits of such hybrids are modest. To avoid future strife, companies should sell debt that is better at absorbing losses.

Activist minnow needs bigger fish to fry Exxon

7 Dec 2020

The $176 bln oil major has rarely listened to past investor pleas, so demands from a $40 mln stakeholder seems a non-starter. Yet its recent record of capital destruction may be enough for bigger funds to join in. Taking on the oil giant is a way to justify ESG lip service, too.

Green investing’s killer app faces growing pains

7 Dec 2020

Sustainable finance types long for a single metric showing how well companies are aligned with net zero emission targets. The Holy Grail exists, but there are many different versions. A harmonised methodology ahead of next year’s Glasgow climate summit looks ambitious.