Sustainability

Nickel rout is energy-transition warning for West

8 Mar 2024

Prices of the battery metal have halved in a year, leaving many mines unprofitable or mothballed. Indonesia’s China-backed industry now dominates. Piecemeal aid and a green premium push are unlikely to alter that. Absent smart planning, copper and lithium are vulnerable, too.

Tesla-BYD rivalry is mostly manufactured, for now

3 Jan 2024

Elon Musk’s outfit ceded its title of world’s biggest EV maker to the Chinese company. In a growing industry, that’s irrelevant, plus BYD has a home advantage. The longer-term danger to Tesla, assuming geopolitics doesn't upend its supply chain, is if its peer advances in tech.

Aussie tycoon will blaze new green activist trail

2 Jan 2024

Atlassian co-CEO Mike Cannon-Brookes has already used some of his billions to tackle climate change, like battling the country’s top carbon emitter. Quitting the software firm would make him more effective. Other wealthy moguls may then join him in the activist trenches.

Biofuels comeback will give West a rare energy win

20 Dec 2023

Propellants from plant waste and animal fats have lost out amid an e-mobility push. Yet the difficulty of using electricity for planes and ships, and the rise of non-edible crops as feedstock, will offset food supply fears. Western groups like BP, Total and Eni will benefit.

How rich societies can live well with slow growth

11 Dec 2023

Advanced economies are expanding less rapidly, while ageing populations, conflict and climate change demand more resources. An acquisitive mindset leads to unhappiness and conflict. But if societies embrace a more purposeful, caring and greener future, they can flourish.

 

Energy transition investing is caught in traps

8 Dec 2023

COP28 attendees pledged to triple renewables, but there’s still no plan to quit fossil fuel. Brookfield’s $13 bln joint bid for Aussie emitter Origin lined up a poster child deal for how companies can make the leap. Its failure has lessons for the world’s broader efforts.

Imagine a better climate pact than COP

4 Dec 2023

The UN summit in Dubai, known as COP28, is unlikely to achieve much because all 197 states need to agree. If a few powerful nations set bold targets and then coaxed others to follow suit, progress would speed up. That will not happen unless the US and China take the lead.

 

COP28’s big dilemma: fossil fuel cuts, or fudges

28 Nov 2023

The success of the Dubai climate shindig rests on how much it slashes emissions via cuts to oil production, and how much it relies on carbon storage or removal. In this Exchange podcast, Energy Transitions Commission chair Adair Turner warns against relying on the latter.

Every country needs an Inflation Reduction Act

23 Nov 2023

The US's $370 bln in green subsidies left allies fearing they’d be at a disadvantage. Now they’re realising that adapting the blueprint can unlock private capital, boost economies and speed up the energy transition. Funding remains a challenge, but not an insurmountable one.

COP28’s big challenge: green cash for poor states

15 Nov 2023

To hit net zero, rich countries need to find an extra $1 trln a year of public and private cash for the developing world. As delegates head to Dubai for 2023’s key climate shindig, the UAE could bolster its credibility as host by focusing attention and resources on a fix.

Capital Calls: McDonald’s resilience

30 Oct 2023

Concise views on global finance: The Golden Arches’ global same-store sales rose 9% thanks to both selective menu-price increases and smaller meals in different markets. It demonstrates the company’s ability to keep pace with disparate economies’ stretched consumers.

Time is ripe for another push on carbon pricing

24 Oct 2023

Green subsidies can help fight climate change but are fiscally unsustainable. Regulations can be politically unfeasible, while doing nothing is ecologically untenable. Carbon taxes raise cash, some of which can be used to ease the public backlash.

Brookfield energy deal changes antitrust climate

10 Oct 2023

An Australian regulator decided speedy emissions reductions outweigh competition fears in the Canadian investor’s $12 bln joint bid for power company Origin. The ACCC’s terms for approving the buyout are a handy base for other watchdogs to build on as climate-driven M&A grows.

 

Green energy’s tailwinds blow the other way

22 Sep 2023

Falling costs, cheap capital, and supportive politicians spurred a $7 trln global rush into renewable power. Now fractured supply chains and higher interest rates mean the transition is more expensive. These new headwinds will test the resolve of consumers - and of governments.

Britain is tossing aside its last green trump card

20 Sep 2023

PM Rishi Sunak may defer UK targets for electric vehicles and eco-friendly houses. Juicy US subsidies had already dented Britain’s claims to net-zero leadership, but political backing was a clear signal for green investment. Watering that down is an act of financial self-harm.

Smurfit $11 bln bid for dominance risks paper cut

12 Sep 2023

The Irish cardboard-box king is handing a roughly 40% premium to investors in US rival WestRock as part of a deal to form a sector leader. The price overshadows chunky cost cuts, implying low returns. Yet standing still in a rapidly softening packaging market is not an option.

Smurfit US deal would paper over post-Covid downer

7 Sep 2023

Europe’s No. 1 seller of boxes used by the likes of Amazon may merge with US peer WestRock to form a $20 bln giant. Smurfit Kappa snubbed a similar transatlantic deal in 2018. This time, synergies offer a logical way to offset a waning trend in pandemic-era home deliveries.

Hydropower IPO tests appetite for weather risks

28 Jun 2023

Hidroelectrica’s market sale in Bucharest could value the renewable energy supplier at 10 bln euros, Europe’s largest IPO so far this year. High margins, low debt and fat dividends make the offer palatable. But as droughts intensify, water scarcity may prove a headache.

Green alliance crisis is more than just a US drama

19 Jun 2023

Most insurers have quit their industry’s UN-backed climate body. Sector specifics and fear of US lawsuits partly explain why, but so do European governments focusing on energy security rather than net-zero targets. The same dynamic may affect banks and fund managers.

EU takes broad aim at ESG jungle

14 Jun 2023

Europe wants to rein in the industry for environmental, social and governance assessments by forcing firms to disclose their models and data. A plan to stop conflicts of interest may create compliance headaches. But more transparency and oversight should lead to better outcomes.