Sustainability

Budget squeeze exacerbates U.S. natural disasters

4 Jun 2018

Weather watchers reckon this year’s natural disasters could be at least as bad as normal. That’s following a record $309 bln in damage when Uncle Sam spent 0.7 pct of GDP on storm costs. With finances under pressure, local and federal governments need more sustainable solutions.

DS Smith’s repackaging could have further to go

4 Jun 2018

The UK paper group is buying Spain’s Europac for 1.9 billion euros. As online shopping boosts demand for box materials, more European tie-ups are likely. One could be an International Paper deal for DS Smith, if the former’s bid for Smurfit Kappa finds the wastepaper basket.

Vedanta’s tin ear is a problem for shareholders

30 May 2018

After deadly protests forced the closure of a plant, Chairman Anil Agarwal is blaming a foreign conspiracy. That is no way to reassure rattled investors in the Indian miner, especially given Vedanta’s controversial history. At least a new incoming CEO can set a better tone.

Puerto Rico deaths will take toll on debt talks

29 May 2018

Last year’s hurricane ultimately killed some 5,000 people, a new study claims. That’s more than perished in Katrina in New Orleans or the Sept. 11 attacks. The extraordinary number will buttress the federal overseer trying to curtail payments on the island’s $70 bln of debt.

Shell investors take a narrow view of climate risk

22 May 2018

The oil major easily fought off an attempt by shareholders to turn carbon-reduction ambitions into hard targets. That prevents it being hamstrung compared with rivals. But even the relatively enlightened Shell assumes oil demand forecasts that are vulnerable to political shifts.

California helps Paris send solar message

11 May 2018

The most populous U.S. state is making panels mandatory on most homes built after 2020. It will cut emissions only a little. But the clean-energy focus will push other states along. Fossil-fuel producers will have fewer excuses to ignore the renewable writing on the wall, too.

Impact investing will brush off Trumpian scorn

27 Apr 2018

The U.S. Department of Labor wants pension funds to downplay environmental, social and governance issues that don’t demonstrably improve investment performance. That will provide cover for some holdouts, but should also prompt the $23 trln ESG industry to up its game.

Indonesia’s green ploy for copper raises red flag

25 Apr 2018

New environmental rules complicate and delay already tricky negotiations over control of Freeport-McMoRan's Grasberg mine. Cleaning up is a good thing, but the timing smacks of strong-arm tactics. It's a cautionary tale to foreign investors about an economy with so much appeal.

Water M&A fight puts governance center stage

24 Apr 2018

Eversource’s bid to upset SJW’s $750 mln deal with CWS is a close call on financial grounds. The interloper feels unfairly shut out, though, because SJW’s CEO ran the target until last year. And Eversource’s last big merger was messy. Watchdogs have to navigate choppy currents.

Wells Fargo bets $200 bln on hopes for new climate

20 Apr 2018

That’s how much under-fire CEO Tim Sloan is pledging for clean-energy and other green projects. It may distract from a $1 bln mis-selling fine but it’s no mere PR stunt. Boosting financing and outlining credit portfolios’ carbon intensity are smart ways to address climate risk.

Disarming move gives BlackRock one more weapon

5 Apr 2018

Index funds have put the $6 trln asset manager over a barrel with holdings in gunmakers. Now BlackRock is responding with new products allowing investors to avoid producers and retailers of firearms. It's more than what the NRA might call virtue signaling - it's good business.

Tyson saves water reform from the slaughterhouse

4 Apr 2018

The largest U.S. meat producer aims to improve environmental practices on 2 mln acres of suppliers’ land, weeks after Tyson’s founding family used supervoting stock to nix a shareholder resolution along similar lines. The company has much more to do, but at least it’s listening.

U.S. emissions watchdog hands keys to car industry

3 Apr 2018

EPA boss Scott Pruitt plans to ditch Obama-era rules mandating much greater fuel efficiency. He says the move will enhance affordability, but that’s a foil for putting industry concerns first. As finance has shown, regulators who kowtow to those they oversee can cause a crash.

Coal clearout puts Rio on path to greener deals

28 Mar 2018

The Anglo-Australian miner has raised $4.2 bln this month getting out of coal. That implies more buybacks and fewer environmental concerns, helping lift Rio Tinto’s modest valuation. It can also focus on future growth, including investments in battery ingredients like lithium.

The Exchange: CDP’s water boss

23 Mar 2018

Cate Lamb works with shareholders managing some $90 trln of assets to push companies to address water-scarcity and flood risks. She explains what can be done to mitigate the problem – and how doing too little costs businesses billions and can sink economic growth.

Market tools can slake Cape Town’s water thirst

19 Mar 2018

The South African city’s taps may not run dry this year, but low rainfall, population growth and invasive flora keep the threat alive. Poor governance adds to the risk. Tradable water rights could bypass many of those problems, and set an example for other arid regions.

Beijing electric car leader runs on policy power

6 Mar 2018

A $4.5 billion backdoor listing offers the first pure play on China’s new energy auto market. Beijing Electric Vehicles leans heavily on subsidies and patronage - a precarious position as the central government reworks support for the sector. Its alliance with Daimler might help.

Indonesia lays bare green-bond growing pains

27 Feb 2018

The country's $1.25 billion fundraising is hard to square with its palm-oil and coal exports. Issuers with the least eco-conscious credentials, though, are also important to lure onto the bandwagon with financial incentives. It's the various shades of green that are awkward.

Shell is flush enough to afford mistakes

1 Feb 2018

After negative free cash flow in 2016, the energy giant is back in the black. Shell can both comfortably pay shareholders and invest to ensure its survival after demand for oil peaks. The margin for error is welcome – it’s hard to predict how soon crude will fall out of favour.

Daimler drives into profitability problem

1 Feb 2018

The Mercedes-Benz owner expects operating profit to be flat in 2018 despite a rise in sales and margins last year. The cost of developing electric cars justifies European auto groups' lowly valuations. Financial engineering tricks like spinoffs can only be a short-term fix.