Sustainability

VW’s $4.5 bln emissions fine buffer feels adequate

22 Apr 2016

The carmaker has set aside $18 bln for the dieselgate scandal. Stripping out likely costs for buybacks, recalls, compensation and lawyers implies a $4.5 bln fine - just a tenth of the theoretical maximum. But at four times the industry record, it looks a reasonable base case.

Daimler’s emissions snootiness grinds to a halt

22 Apr 2016

The German carmaker has vigorously refuted environmentalists’ accusations it is another VW. Now U.S. authorities have requested an emissions probe. It’s possible that any infringements are technical, relating to disclosure oversights. But shareholders have grounds to feel edgy.

Climate deal suffering from serious water shortage

22 Apr 2016

The Paris agreement global leaders are formally signing on Earth Day doesn’t mention water once. But the world’s dirtiest industries are also the thirstiest. Cutting CO2 emissions needs wiser H2O regulation and pricing. The energy sector will be especially vulnerable.

Breakdown: Green finance grows despite fuzzy logic

11 Apr 2016

Policymakers are desperate to coax cash into planet-friendly projects to cover the costs of environmental crises and climate change. The latest idea is to label green investments. But the precise benefits are often unclear. Breakingviews offers a guide through the undergrowth.

Emissions reach encouraging pre-peak peak

16 Mar 2016

Pollution from energy production has levelled out. The IEA says that the U.S. and China burning less coal has helped to win a battle in the global fight against climate change. But to win the war on emissions, India must be persuaded to rein in its use of the dirty fuel.

China’s record waste deal is far from rubbish

5 Feb 2016

State-backed Beijing Enterprises is buying Germany’s Energy from Waste for $1.6 bln. Unlike some of China’s splashier foreign deals, this looks decently priced and makes obvious strategic sense. China badly needs more clean-technology expertise. Expect more trashy buys.

Oil price slump takes gloss off Paris climate deal

14 Dec 2015

Brent crude trading close to an 11-year low could be a big boost to global growth. But at least in the short-term, the cheaper oil price will stoke fossil fuel demand. Even if the Paris accord helps longer-term, both oil prices and consumption are set to tick up. 

Paris deal gives green light to eco-investing

14 Dec 2015

The climate goals agreed by 195 countries are laudably ambitious. Scepticism over governments’ ability to hit them is warranted. But the accord should encourage venture funds, bond- and shareholders to stump up more capital. And making an impact is not as hard as it may sound.

Breakdown: Uneven CO2 prices are better than none

11 Dec 2015

Plenty of governments and executives support a uniform carbon emissions cost. Yet it’s unlikely one will emerge from the U.N. climate change confab. That’ll leave a hodge-podge of local schemes in place. As the need for energy innovation rises, it beats having nothing.

BHP’s Brazil disaster points to dividend cut

30 Nov 2015

The Anglo-Australian miner needs to conserve cash to pay for the Samarco dam disaster in Brazil. Forecast earnings already fall short of the $6.5 billion it paid shareholders last year. BHP would be wise to get ahead of the curve and scrap its commitment to progressive payouts.

How diesel-mad EU laid seeds of VW scandal

26 Oct 2015

The fierce U.S. response to the carmaker’s emissions manipulation shows Europe has been lax on a core public health issue. Exhaust limits are too high, test procedures too weak, and evidence of non-compliance was missed. Clean diesel is possible, but only with lower auto profit.

China carbon scheme another case of faulty markets

10 Sep 2015

It’s not just stocks and exchange rates that are proving hard to control. Seven pilot schemes for trading carbon dioxide emissions are floundering due to cheap permits, low liquidity and flexible deadlines. In this case, state intervention may be better than supply and demand.

Singapore could use a fresh approach to water

3 Aug 2015

The city-state built its economic success partly on carefully managing scarce H2O and reducing reliance on foreign sources. Now Singapore wants to be self-sufficient. But with the population set to double, the quest for water independence risks becoming a distracting pipe dream.

Green bonds struggle to justify the hype

23 Jul 2015

China’s first eco-friendly bonds push this year’s issuance close to $20 bln. The market has grown fast. But definitions are fuzzy, returns are humdrum, and it’s not clear what problem this solves for corporate issuers, most of whom could sell conventional debt at similar rates.

Pope offers coherent challenge to amoral economics

18 Jun 2015

The leader of the Roman Catholic Church speaks of climate change and biodiversity. His science is less compelling than his commitment to cultural and ecological unity. That can only be created by reassessing the importance of GDP and recognising that many debts are non-financial.

Forget ethics, carbon divestment looks profitable

11 Jun 2015

Norway’s state fund and insurer AXA are ditching carbon-rich companies. The rhetoric may be ideological, but the economic case against coal and legacy utilities is strong. They face tough challenges, even if political action against climate change remains lacklustre. 

Engines of growth give carmakers a green problem

11 Jun 2015

Rising demand for gas guzzling SUVs puts Daimler, BMW and Audi in a bind. Bigger, faster cars are boosting profits but cancel out most of the progress on emissions control, new German data shows. Tightening European rules on pollution may see carmakers having to apply the brakes.

G7 carbon coup worsens Merkel’s domestic coal woes

9 Jun 2015

Prodded by the German chancellor, the big rich nations’ leaders have pledged to get rid of all fossil fuels by 2100. But at home, her party has joined the unions in fighting a crackdown on heavily polluting lignite. Merkel risks undermining her credibility – and the G7 deal. 

Grand plan could make China’s water work

17 Apr 2015

China wants more than 90 pct of urban water to be drinkable by 2020. Given that two-thirds of ground water is filthy, that’s bold. But the plan is well-crafted. Plugging infrastructure holes, reforming prices and punishing polluters can make supplies cleaner and more productive.

China takes least useful polluters to the cleaners

24 Feb 2015

A revamped law that makes it cheaper to clean up than mess up is facing its first test in the courts. Offenders now risk unlimited fines, shut-downs and jail time. It sounds encouraging, though like many of China’s reforms, it leaves room for Beijing to pick winners and losers.