Sustainability

Big banks are ill-suited to be biodiversity cops

28 Oct 2020

Under pressure from investors and regulators, lenders have woken up to the financial risks of climate change. Activists are pushing for similar urgency in protecting the world’s variety of plants, animals and insects. But any big shift requires governments to lay down the law.

Review: Green sceptic sheds more heat than light

23 Oct 2020

Bjorn Lomborg wants the world to understand the risks of doing too much on climate change as well as too little. The green firmament should not be immune to constructive criticism. But the Danish academic’s arguments are not convincing enough to warrant societal complacency.

Stored carbon could morph into investment gold

20 Oct 2020

Capturing and storing CO2 is expensive, judging by a new project in Norway. But the need to curb emissions is persuading states to take the plunge. The rising cost of emitting carbon dioxide means the technology may soon give investors a new regulated asset to embrace.

Guest view: Energy’s outlook is still rose-tinted

19 Oct 2020

The International Energy Agency’s 2020 forecast acknowledges the cheapness of solar power. But despite some progress it is yet to include a path to keep global warming to 1.5 degrees Celsius by 2050. As climate academic Sven Teske argues, the failure is part of a pattern.

Danone shakeup needs bigger ESG splash

19 Oct 2020

The French dairy group is reviewing assets to restore its flagging growth. Yet disposals covering just 2% of sales look lacklustre. Selling the shrinking water unit would give CEO Emmanuel Faber cash for deals and boost the 37 bln euro company’s appeal with sustainable investors.

Banks only partly to blame for weak green targets

13 Oct 2020

HSBC and JPMorgan are among lenders pledging to align their financing with the Paris accord to cut carbon emissions. A general absence of detail might just be because they have big fossil fuel loan books. But it also reflects the problem with measuring financed emissions.

Singapore’s bid for insolvency tourism is at risk

8 Oct 2020

The city-state picked elements of both U.S. and UK bankruptcy law to boost its attractiveness for hosting corporate workouts. But the glacial resolution of water treatment giant Hyflux could discourage the creditors the city needs to support its campaign to become a genuine hub.

Big Oil’s green rush needn’t inflate a big bubble

6 Oct 2020

Total has joined BP in promising more investment in renewable energy. The risk is that deep-pocketed interlopers push up prices of wind farms and solar parks, eroding returns. Luckily for transitioning oil majors, the scale of new capacity needed to replace fossil fuels is vast.

Preferred wheels of nouveau riche worth a fortune

1 Oct 2020

Volkswagen is mulling a sale of Lamborghini, the beloved marque of crypto-traders and youthful sheikhs, Reuters reports. It might fetch $8 bln – a fat return on the reported $100 mln VW paid in 1998. CEO Herbert Diess’s battery-car focus makes disposing gas guzzlers an easy call.

China’s green goal could lead to a virtuous circle

29 Sep 2020

Beijing’s pledge to decarbonise before 2060 requires major electrification using renewable energy. The catch is that key parts of that strategy, like hydrogen power, remain too pricey. Yet if political focus helps make them cheaper, the benefits will not just be felt in China.

Xi puts clean energy to good use beyond climate

23 Sep 2020

China’s president says his country will be carbon-neutral by 2060. The pledge is credible because it’s in Beijing’s interests; Xi may also be trying to warm frigid European negotiators, and defang sceptics. It’s also plausible because China is exporting pollution to poor countries.

Review: Oil historian of record drops his compass

18 Sep 2020

Three decades after his celebrated history of the hydrocarbon industry, “The Prize”, Daniel Yergin has published “The New Map”. His account of recent energy geopolitics is typically authoritative. A discussion of the ongoing energy transition, however, lacks clear signposts.

BP’s wind tilt is more steady breeze than gale

18 Sep 2020

The UK oil major’s “green week” yielded a target of 20 GW of renewable energy by 2025. Even with a mooted $5 bln a year in investment, BP would struggle to get there via higher cost offshore wind. That’s probably why CEO Bernard Looney’s blueprint allows for a steadier pace.

Green bonds could slide into irrelevance

17 Sep 2020

Securities used to finance environmentally friendly investments are thriving, with everyone from JPMorgan to Germany charging in. Yet the $800 bln market does not necessarily mean greener issuers. As investors get better at differentiating, green bonds could become redundant.

UBS reframing of ESG investing changes the game

11 Sep 2020

Portfolios factoring in social and climate issues are now the “preferred” option for its $2.6 trln of private-client assets. Making them the default, with no caveats about performance, is a big deal. It’s necessary, if not sufficient, to drive substantive real-world change.

Rio Tinto board can choose CEO – at expense of ESG

10 Sep 2020

Many shareholders want harsher punishments for the mining giant’s destruction of Aboriginal heritage sites. Robust returns are one reason to stop short of axing boss Jean-Sebastien Jacques. If he stays, though, Rio’s responsible investing credentials will be deeply discounted.

U.S. climate report’s obviousness is its strength

9 Sep 2020

A CFTC-led study on the financial risks from global warming isn't revelatory. Instead, it rehearses the dangers and suggests solutions already common in Europe and elsewhere. Backing from Wall Street, Big Agriculture and Big Oil helps point to a more consistent response.

HSBC takes first sip of natural capital

27 Aug 2020

The UK bank is teaming up with advisory startup Pollination to invest in sustainable forestry, water supply, natural carbon capture and such. Nature-based solutions are key to minimizing climate change. HSBC's JV is a step towards building the needed mainstream scale.

Fashion can bear the costs of virtue cotton

25 Aug 2020

Most of China’s crop comes from the persecuted Uighurs’ home region. Forced labour may taint some of that, but clothes makers do not yet trace their complex supply chains back to the farms. Scrutiny from politicians and investors means careful sourcing makes financial sense.

BP gets serious about tough corporate reshaping

4 Aug 2020

CEO Bernard Looney’s dividend cut frees up cash for renewables investment. Plans to axe oil output by 40% by 2030 show added commitment to flicking the green switch. Selling assets is easy but growing new businesses is hard. BP risks ending up neither an oil nor an energy major.