By Sharon Kimathi, Energy and ESG Editor, Reuters Digital |
Hello! Another day, another attempt by United States Republicans to contest environmental, social and governance (ESG) policies in financial institutions. This time, Republicans set their sights on BlackRock Inc's ownership of utilities companies, stating that the firm is "an environmental activist". A group of 17 Republican U.S. state attorneys general asked federal energy regulators to review BlackRock's ownership of utilities, citing the top fund manager's involvement in industry efforts to limit climate change. The motion before the Federal Energy Regulatory Commission (FERC) was filed just days after rival Vanguard Group overcame a related challenge from some of the same politicians. The efforts are part of a Republican campaign against the growing use of ESG considerations by investors and company executives. In their motion on Wednesday the attorneys general asked the four-member body known as FERC to audit whether BlackRock has complied with a 2022 order that gave it permission to own more than 10% of U.S. utility company shares. |
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Larry Fink, Chairman and CEO of BlackRock, an interview with CNBC on the floor of the New York Stock Exchange in New York City, U.S., April 14, 2023. REUTERS/Brendan McDermid | |
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That waiver from antitrust limits was given because BlackRock functioned as a passive investor. But BlackRock has undercut that by joining groups like the Net Zero Asset Managers initiative seeking to influence utility company operations, the group claimed. "Maybe BlackRock was a passive investor ten years ago, but today it's an environmental activist," states the motion led by officials including Indiana Attorney General Todd Rokita. BlackRock and FERC representatives did not immediately comment. BlackRock, which runs some $9.1 trillion, has said it acts independently and that better ESG data from companies will help investors judge risks on matters like climate change. Meanwhile, the pressure is piling up on Shell shareholders to support a climate activist resolution at its annual general meeting and vote against the oil major on most counts, Britain's Local Authority Pension Fund Forum (LAPFF) said in a report seen by Reuters. This follows announcements by the Church of England Pension Board, proxy adviser PIRC and a number of Dutch funds in favor of the climate resolution proposed by activist group Follow This. Proposals on climate resolutions are not just limited to fossil fuel firms and financial institutions this annual general meeting season, as a trio of European asset managers has submitted a shareholder proposal urging Toyota Motor to improve disclosure of its lobbying on climate change. It will be the first time that Toyota faces such a climate-related resolution at its annual general meeting, the funds said. Toyota's board recommended that shareholders vote against the resolution, to be put to the company's annual general meeting in June. |
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U.S. flag flies in front of a coal-fired power plant's cooling tower at Duke Energy's Crystal River Energy Complex in Crystal River, Florida, U.S., March 26, 2021. REUTERS/Dane Rhys | |
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- The Biden administration unveiled a sweeping plan to slash greenhouse gas emissions from the nation's power industry, one of the biggest steps so far in its effort to decarbonize the American economy to fight climate change.
- Spain will ban some outdoor working during extreme heat conditions, Labour Minister Yolanda Diaz said, as the country faces high temperatures more frequently as a result of climate change.
- Wielding brooms and carrying cleaning supplies, a group of activists symbolically cleaned the facade of a branch of Swiss bank UBS in Zurich to protest against its fossil fuel investments.
- BNP Paribas, France's largest lender, will no longer provide any financing dedicated to the development of new oil and gas fields, the bank said, as it reiterated its target of an 80% cut of its oil exploration financing by 2030.
- Breakingviews: Fighting opaque governance at Italy's state-backed companies is proving a tough nut to crack. Attempts by rebel investor Covalis Capital to install its choice of directors on the board of 62 billion euro ($67 bln) green champion Enel failed to muster sufficient support from institutional shareholders.
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Martijn Rozemuller, Europe CEO at the global asset manager VanEck, shares the reasons why it chose to launch the 'VanEck Oil Services exchange-traded fund (ETF)': "We launched an ETF focused on the upstream oil services sector even amid stronger ESG scrutiny and demand for sustainable investment solutions, as we see several compelling reasons for this." "The first is that the shift to green energy sources like wind, hydrogen and solar will be gradual and will take time. As of now, renewables represent only around 5% of the total worldwide energy consumption." "Especially at times where the need for safe and reliable energy sources has been highlighted by the geopolitical turmoil of 2022, it is clear that this transition will have to be accompanied by traditional fossil fuels like oil and gas." "Firstly, gas will be important to phase out coal, which entails the highest greenhouse gas emissions per GWh of electricity produced." "Secondly, even when the shift will have completely taken place, fossil fuels will potentially be needed to support the electricity grid in case renewables alone are not sufficient to satisfy the total demand." "Moreover, the oil services companies we offer exposure to are actively reassessing their strategies in light of the green transition. Many of them are engaged in the renewable energy and green technology space performing activities concerning bioenergy, hydrogen and decarbonization." |
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Thailand has among the highest household debt to gross domestic product (GDP) ratios in Asia - behind only South Korea and Hong Kong, according to a Bank for International Settlements ranking - and millions of people, one in every three, are trapped in debt. Kavita Wongyakasem runs a small business in Bangkok, owns a two-storey house on the outskirts of the Thai capital, drives a pick-up truck, and sends her two daughters to good schools. But every day is a desperate struggle to find the money to keep her household afloat, said the 48-year-old, whose business provides services for a big energy company. |
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Swimming pools adjacent to houses, as drinking water supplies plunged to their lowest level since 1990 due to extreme drought, in Vacarisses, Spain May 4, 2023. REUTERS/Nacho Doce | |
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A new law in Spain barring residents in Catalonia from refilling their pools due to fears of drought, is in focus in today's ESG Spotlight. Elsewhere, multinational conglomerate Honeywell announced a new technology to produce sustainable aviation fuel. Many people were drawn to the town of Vacarisses near Barcelona in the 1970s by the suburban dream of homes with large gardens and swimming pools to provide respite during long, hot summers. But now, that lifestyle is under threat as a severe drought forces authorities to reach for increasingly stringent measures to conserve water, including restrictions on filling pools. A law expected to come into force in coming days will bar residents in the northeastern region of Catalonia, including Vacarisses, from refilling empty pools even as an abnormally warm spring suggests the coming summer will be equal in ferocity to last year's, one of the hottest on record. The law will not apply to public pools or hotels. |
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An Air France aircraft, operated with SAF produced by TotalEnergies, is refueled before its first flight from Nice to Paris at Nice airport, France, Oct 1, 2021. REUTERS/Eric Gaillard/File Photo | |
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Honeywell International announced a new technology to produce lower-carbon aviation fuel from green hydrogen and carbon dioxide captured from industry, which can help cut greenhouse gas emissions from aviation, one of the hardest sectors to electrify and decarbonize. Sustainable aviation fuel, or SAF, is typically made using biomass-based feedstocks such as soybean oil and used cooking oil. Honeywell's new technology would combine green hydrogen - produced in electrolyzers from renewable energy and water - and carbon dioxide siphoned off industrial smokestacks to create lower-carbon methanol, which is then turned into fuels including SAF. |
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"The change in how ESG is perceived has triggered a frenzy of credential-signaling, but the ability of firms to discriminate between expertise and snake oil has yet to catch up." Ranjita Rajan, Business Fellow at the Smith School of Enterprise and the Environment, University of Oxford |
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- May 12, Colombo, Sri Lanka: The nation is planning to electrify half a million of its tuk tuk taxis over the next five years. The project was launched by transport minister Bandula Gunawardane and officials from the UNDP in Colombo with a demonstration of electrification of one of the petrol-fueled vehicles.
- May 12, Bangkok, Thailand: Shortly after cannabis was legalized in Thailand, thousands of cannabis stalls popped up along the streets of Bangkok and tourist spots, representing hopes of a boost to the nation's economy. Yet nearly a year on, the promise of a new bonanza crop seems to have gone up in smoke as a legal framework has never been clearly set out, and long-promised legislation failed in February to get through parliament, leaving the country without an umbrella law to regulate its use.
- May 12, Los Angeles, United States: The nation is getting ready to lift COVID-19 restrictions that have blocked migrants caught in the U.S.-Mexico border from seeking asylum since 2020, a major policy shift with humanitarian and political implications.
- May 12, Montreal, Canada: Small aerospace companies are pressing plane makers and larger suppliers for better pricing and protections against inflation as rising labor and material costs spur pushback against the prospect of cost-concessions, industry executives said.
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