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Calpine — ESG QuickTake (9fin) (18/07/2023)

TLDR: Calpine, a US-based electricity utility, does not have emissions reduction targets, a robust climate transition plan, or significant renewable energy production. Its decarbonisation strategy relies on carbon capture technologies, which have negative environmental impacts. Calpine is vulnerable to drought due to its water-intensive electricity generation. In 2022, a power plant owned by a Calpine subsidiary exploded. There were no injuries and litigation is ongoing.

Software AG — ESG QuickTake (9fin) (18/07/2023)

TLDR: Software AG, a business integration and process management software developer, has not set emissions reduction targets. In 2020, Software AG was the target of a malware attack, which according to the company was successfully contained. In 2017, Software AG initiated an internal investigation following media reports that alleged it had made illicit payments in order to win deals with South African state-controlled companies, agencies or private firms. In 2018, the Spanish Antitrust Authority (CNMC) fined Software AG €6m for inadmissible price fixing and cover tenders.

ESG Sector Selector — Telecommunications (9fin) (24/07/2023)

This is the first article in 9fin's ESG Sector Selector series. The series provides overviews of relevant sectors in the ESG High Yield space and offers guidance for analysing the most material ESG factors. Telecommunications represents a regular constituent in high-yield ESG funds. According to 9fin’s database, the telecommunications sector has issued the highest number of green/sustainability-linked bonds and loans, second only to manufacturing. This piece lays out six key areas to consider when assessing telecommunication companies.

HY company news

William Hill owner warns of UK licence risk from new shareholder (14/07/2023)

The owner of William Hill could lose its right to operate in the UK after regulators put its licence under review over concerns about a new shareholder’s links to a bribery investigation by the UK tax authority. 888 said the Gambling Commission told it on Friday that its licence was under review in relation to an almost seven percent stake built by FS Gaming Investment Consortium, a vehicle backed by former executives at GVC, the gambling giant later rebranded Entain.

Altice co-founder detained in Portuguese corruption probe (14/07/2023)

Telecoms group Altice International's co-founder Armando Pereira has been detained in Portugal, according to local media, as part of an investigation into alleged corruption, tax fraud and money laundering. Altice's Lisbon headquarters were raided by officers, according to broadcasters CNN Portugal and SIC TV. Both Altice Internationaland Altice France (SFR) have posted updates following the probe. Altice International is the part of the group housing the Portuguese operations. The entity said it was cooperating with authorities, that several staff members have been placed on leave, approval processes are being reviewed, and an internal investigation has been launched.

Elizabeth Warren urges SEC to investigate Tesla over Twitter ties, corporate governance (17/07/2023)

Senator Elizabeth Warren is urging the U.S. Securities and Exchange Commission to investigate Tesla and its board of directors over possible “conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders” related to CEO Elon Musk’s Twitter takeover. The nine-page letter, first obtained by CNBC, was sent to SEC Chair Gary Gensler on Monday. Senator Warren wrote that the Tesla board’s “apparent lack of independence” from Musk, combined with “inaction and incomplete disclosures, raise questions about possible violations of securities laws and exchange rules which fall under SEC’s jurisdiction.”

News stories

Stalled EU social taxonomy work to be 'restarted' by French investors (21/07/2023)

Grégoire Cousté, CEO of Forum pour l'investissement responsable (French SIF), told Environmental Finance that the investor members organisation is establishing a multi-stakeholder working group to “restart” work on the social taxonomy. Cousté said other national sustainable investment fora are exploring their own work on similar exercises. This includes Germany, which is working on a social framework for investment.

Scope 3 'make or break' for the SLB market, says BNP Paribas

Scope 3 emissions could "make or break" the sustainability-linked bond (SLB) market, a sustainable finance head at BNP Paribas has told Environmental Finance. Amid questions over the credibility of the SLB market as a tool for delivering the transition to net zero, Agnes Gourc, head of sustainable finance markets at the French firm, suggested issuers will increasingly have to adopt scope 3 targets and key performance indicators (KPIs), particularly in sectors with significant scope 3 emissions.

ESMA provides insights into the expected sustainability disclosures in prospectuses (11/07/2023)

The European Securities and Markets Authority (ESMA) has issued a public statement on the sustainability disclosure expected to be included in prospectuses. ESMA emphasises the importance of an issuer’s non-financial reporting under the Non-Financial Reporting Directive and the future sustainability reporting under the Corporate Sustainability Reporting Directive. In addition, the statement clarifies the disclosure required in relation to ‘use of proceeds’ bonds and ‘sustainability-linked’ bonds. The public statement also notes that sustainability-related disclosure is sometimes included in advertisements but not in prospectuses themselves.

Republican state officials threaten legal action over company diversity policies (14/07/2023)

A group of Republican U.S. state attorneys general have warned the country's largest companies that certain workforce diversity policies could be illegal. The 13 officials in letters sent to the 100 largest U.S. companies said the court last month made clear that any policy that treats people differently because of their race is illegal, even when it is adopted with good intentions. The attorneys general urged the companies to abandon race-based quotas or preferences in hiring, promotion and contracting and threatened legal action "sooner rather than later" if they do not.

European companies "falling behind" on material disclosures (20/07/2023)

European companies are “falling behind” on the disclosure of financially material sustainability data, ESG Book claimed. The data provider found that European corporations have the highest level of overall ESG disclosure, largely driven by emerging mandatory reporting in regulations such as the EU Taxonomy and the Corporate Sustainability Reporting Directive. However, it found that “there is a noticeable drop” in the reporting of financially material information that investors or financial institutions need in order to accurately understand the material aspects of its sustainability performance. ESG Book did not provide a reason for this.