Sustainability

Nestlé, private equity find riches in water flush

17 Feb 2021

The $325 bln group is selling U.S. brands like Poland Spring to One Rock Capital and Metropoulos for $4.3 bln. The buyers get the assets on the cheap, at just 1 times 2019 sales. But the disposal helps Nestlé CEO Mark Schneider’s green goals and protects his premium valuation.

Coal wobble flags Glencore’s green high-wire act

16 Feb 2021

The commodity giant’s EBITDA from the black stuff collapsed in 2020 to just $1.2 bln. Given his increasing climate consciousness, departing CEO Ivan Glasenberg should be happy. But it also shows the risks of a green pivot that requires coal to be used as a financing bridge.

Private equity ESG hoops are too easy to navigate

16 Feb 2021

Lower-rated companies and those controlled by buyout groups are issuing debt with interest payments linked to environmental, social or governance targets. But they’re too mild to change behaviour much. To have real teeth, their conditions need toughening up.

Coal India is in the pits of climate activism

16 Feb 2021

The commodity’s top pure-play miner is setting up renewable-energy units and looking for partners. It’s a hedge against coal’s decline and a modest bet on a hot field. But it has potential to boost lousy returns at the $11 bln company that’s key to the country’s power needs.

Shell’s new plan tests investors’ green resolve

11 Feb 2021

The Anglo-Dutch group’s decarbonisation strategy will see it stay big in oil longer than BP. European investors now have a choice between Shell’s walking pace and its rival’s handbrake turn into wind and solar. It could become a gauge of how seriously investors take green issues.

Engie’s timid breakup needs green boost

11 Feb 2021

The $39 bln French utility’s shares have lagged peers for years. New CEO Catherine MacGregor is simplifying the rambling group by selling part of its services unit. Spinning off the renewables division could give the stock a roughly 50% bump, and enable more climate-friendly M&A.

Japan’s auto giants could ignite hydrogen hype

9 Feb 2021

Tokyo is backing fuel-cell-powered vehicles to help cut emissions. It’s reminiscent of China’s early support for electric cars. As then, commercial success will depend on official subsidies. But unlike startups, Toyota and Honda have the tech and funds to enjoy a smoother ride.

UK wind auctions are frothy for a reason

8 Feb 2021

The toppy price paid by BP for wind turbine-friendly seabed reflects its desperation to pivot to green energy. But the UK’s subsidy-laden regime is also more attractive than those of other states. That makes wind maven Orsted’s reluctance to match the UK major even more striking.

Capital Calls: Super Bowl, Poison pills, Experian

8 Feb 2021

Concise views on global finance in the Covid-19 era: America’s game doesn’t benefit from scarcity value; Cubic’s poison pill serves a purpose; And Brazil’s cyberattack has a price for Experian.

Anglo takes quick, dirty route to greener pastures

8 Feb 2021

The miner may dump its African coal unit, worth maybe $1 bln. A spinoff could add six times that sum to the $45 bln group’s value by luring eco-conscious investors. Yet it doesn’t cut global emissions, and Anglo American’s iron ore assets may soon feel the environmental heat.

Guest view: Auditors hold key to climate crisis

28 Jan 2021

Accountants are not obvious saviours for a world threatened by global warming, argues Natasha Landell-Mills. But their central role in vetting companies’ financial sustainability, and their ability to act independently of regulators and executives, gives them a duty to be bold.

Bond markets will be new climate vigilantes

27 Jan 2021

Booming demand for sustainable funds and new EU rules will make debt investors more wary of buying securities issued by polluters. There are already signs that is happening in the oil and gas sector. Higher funding costs should be a powerful spur for companies to get serious.

Larry Fink flexes what green muscles he has

26 Jan 2021

The BlackRock boss will require companies to show how they will eliminate carbon emissions by 2050. The $9 trillion asset management giant’s largely passive funds cannot dump climate laggards. But Fink’s latest letter makes clear his active managers will show more strength.

Chinese vaping IPO leaves risk factors up in smoke

26 Jan 2021

Rlx shares surged in their debut, delivering a $46 bln valuation that tops Japan Tobacco’s. Revenue is growing fast, despite an earlier ban of domestic online sales. A wider backlash also singed Altria’s bet on Juul. Overlooking regulators can be hazardous to investors’ health.

How to pick the hydrogen industry’s future Amazon

22 Jan 2021

The element could play a major role in decarbonisation, which has sent shares in related companies skyrocketing. As with the 1999 tech-stock boom, investors can’t tell which group can corner the market. But they can see which uses of hydrogen will become cost-competitive first.

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.

Total’s Indian green energy splurge has two hedges

18 Jan 2021

The French giant is upping its exposure to renewable power by buying 20% of Adani Green Energy. The $2.5 bln price tag is well below the target’s market value. Teaming up with tycoon Gautam Adani may also help avoid problems suffered by other Western energy groups in India.

Merkel exit may give German economy a Green jolt

14 Jan 2021

The chancellor’s party is picking a new leader. None of the candidates want to really ramp up much-needed infrastructure investment. A saving grace is that Merkel’s exit may weaken her Christian Democrats, empowering the bigger-spending Greens in any future coalition government.

New World sets better template for climate bonds

13 Jan 2021

The Hong-Kong-based developer has sold sustainability-linked 10-year paper that carries a penalty for missing green goals. In a twist, its forfeit doesn’t go to investors via higher interest payouts but into carbon offsets. That’s better for the planet and the bonds’ credibility.

Dixon: How to make COP26 climate summit a success

5 Jan 2021

Politicians and markets increasingly get the danger of climate change. And technology is advancing fast. But the climate is also deteriorating rapidly. Here are six things that can be done at this year’s summit to make sure the planet doesn’t lose the race against time.