Sustainability

Green bonds are fertile spot for climate activists

8 Oct 2018

Buyers of debt earmarked for environment-friendly uses are tougher on borrowers than, say, those lending to typical private-equity deals. And up to $60 trln of such funding is needed by 2030. That may give green creditors a stronger platform than shareholders to push for change.

China’s winter production cuts are down, not out

4 Oct 2018

Beijing has reduced pollution targets and delegated output decisions to local authorities. That looks like a retreat after last year’s heavy industry pain, which pushed up steel prices. The reality is more complex: officials still want to balance green imperatives with growth.

Climate change stress tests omit the stress

27 Sep 2018

More companies are releasing guidance on how their balance sheets might cope with a decarbonised world. Unfortunately, disclosures are thin on detail and political apathy gives boards cover to do little. Time to turn voluntary exercises into more exacting and mandatory reviews.

BMW justifies carmakers’ slow lane valuation

25 Sep 2018

Investors fled the sector this year on trade-war fears and new emission rules. At around six times earnings, Europe’s automakers were starting to look cheap. The German group’s profit warning, however, is a reminder of carmakers’ limitless capacity to generate bad news.

Mars plan for sustainable cocoa is moreish

19 Sep 2018

The confectioner’s $1 bln investment in the key ingredient’s “broken” supply chain benefits all from forests to farmers. As a way of getting better supplies and reassuring customers, it benefits Mars too. Other companies should feast on this kind of sustainability strategy.

U.S. utilities face decades of perfect storms

17 Sep 2018

Carolina power companies grapple with hurricane damage while a Massachusetts gas firm is reeling from explosions. California’s push for green energy could hurt credit. Even after decades of rising investment, power companies will struggle to strengthen and modernize networks.

Climate change could offer banks double salvation

11 Sep 2018

The UN’s alarm about global warming also dangles at least $26 trln in economic gains if the world changes course. Wall Street types should salivate over that number. Taking the lead could also provide some cushion against reputational hits of the kind they took a decade ago.

Private equity confronts plastic risk in RPC swoop

10 Sep 2018

The UK group that makes packaging for the likes of Nestlé is being sounded out by Apollo and Bain. Given the global war against plastic, a deal would be risky. But with RPC less exposed to throwaway items, the buyout groups can make a high enough return to make it worthwhile.

Chinese battery makers can win EV recycling race

30 Aug 2018

Metals recovered from spent car cells could be worth more than $20 bln a year within a decade. Western chemicals groups like Umicore already profit from waste. But with half of the world’s electric cars sold in the People’s Republic, locals like CATL and BYD can pull ahead.

U.S. coal-power plan blows little but hot air

21 Aug 2018

Donald Trump wants to let states set their own emissions rules. It may save some coal plants for a while. But banks prefer not to fund them, other electricity sources are cheaper – or soon will be – and renewable energy provides far more jobs. These trends will win out.

Guest view: ESG ratings aren’t reliable enough

10 Aug 2018

Socially responsible investing has become a $20 trln-plus industry, but how do we know if firms are actually doing well by doing good? Shiva Rajgopal and Richard Foster pinpoint four big problems in measuring the environmental, social and governance impact of investments.

China’s air quality depends on its debt clean-up

20 Jul 2018

Efforts to reduce smog have been an underrated success, with air pollution down by around 33 pct in some cities last winter. The campaign to trim the $20 trln corporate debt pile helped, as it cut credit to inefficient factories. If Beijing resumes easing, haze could reappear.

Exxon lobby exit boosts investor climate activism

13 Jul 2018

The $350 bln oil giant has quit a group trying to ease regulation of greenhouse gases. That’ll make it harder to fend off shareholders pushing Exxon to tackle how climate change will hit earnings. California cutting its emissions ahead of schedule shows that’s a growing risk.

Trump gives his team too long a leash

5 Jul 2018

Scott Pruitt, who has resigned from the U.S. environmental watchdog, had the president’s support for months despite a rash of ethics scandals. His departure shows there are limits, but others facing questions, like commerce tsar Wilbur Ross, needn’t worry yet: the bar is high.

Big Oil win over U.S. cities will be short lived

26 Jun 2018

A judge dismissed a long-shot lawsuit by Californian metropolises trying to hold Exxon and others liable for climate change. But many cities are slashing their CO2 emissions, which account for some 70 pct of the global total. Those attempts can pipe fossil fuels into obscurity.

Audi arrest puts brakes on VW’s reform drive

18 Jun 2018

The head of Volkswagen’s luxury brand is being held over fears he may hinder an investigation into emissions cheating. The question is why the long-serving executive still had his job. The carmaker’s messy governance is still hindering new boss Herbert Diess’ cleanup operation.

Permian drillers tap new resource in wastewater

14 Jun 2018

U.S. shale operators extract four times more water than oil from wells in West Texas. Disposing the dirty liquid is costly and threatens growth. But some companies are treating and reusing water to cut costs. A few even could turn this into a second business in a parched world.

Solar star GCL has fix for dark days in China

7 Jun 2018

The world’s top maker of polysilicon, a key ingredient in solar panels, is selling control of a core Chinese unit for nearly $2 bln. That’s a surprisingly good price. This will help GCL-Poly through a lean patch as the industry adapts to a sudden withdrawal of government grants.

Expanded Heathrow’s value to rest of UK is hazy

6 Jun 2018

Europe’s busiest airport has tried to placate critics of a third runway by incentivising flights to smaller UK cities. But large airlines will struggle to make these stack up. Unless budget players can do so, the charge that Heathrow only works for London will be hard to refute.

Shareholder climate activism needs more heat

5 Jun 2018

Owners of companies from Exxon to Rite Aid are asking for more disclosure on sustainability. That’s important, but insufficient. Ensuring bosses take climate goals seriously requires an informed board – and exec pay tied to green goals. These are what investors should target.