Market Wrap
ESG Wrap — Baush + Lomb lacks long term climate vision, Massive strikes bring US Automakers to halt
- 9fin team
•5 min read
This is the weekly ESG Wrap, which highlights Featured 9fin ESG content such as TLDRs for all deals, news stories that have interested the ESG team this week, and 9fin ESG product updates.
Primary Analysis
Nouryon — ESG QuickTake (14/09/2023)
TLDR: Nouryon (formerly Akzo Nobel Speciality Chemicals), a chemicals manufacturer based in the Netherlands, is not yet on track to meet its 2030 emissions target. Unlike its peer, Nouryon lacks quantitative and time-bound targets to cut its exposure to hazardous chemicals. Nouryon’s exposure to palm oil, a key driver of deforestation, has fallen since 2021. In 2022, Nouryon identified 100 suppliers that need corrective action through its EcoVadis Risk IQ assessment.
Bausch + Lomb — ESG QuickTake (14/09/2023)
TLDR: Bausch + Lomb, a US based provider of eye health care products, lacks emissions reduction targets. The company does not report its scope 3 emissions, despite this likely being the majority of its emissions. Bausch + Lomb lacks quantitative and time-bound targets to improve its renewable energy consumption and gender diversity on its board of directors.
Since 2016, Bausch + Lomb has been named in a number of product liability lawsuits involving its Shower to Shower body powder product. Some of those suits allege the product is carcinogenic. The company is also involved in ongoing lawsuits related to antitrust but reports it aims to defend against them “vigorously”.
FNAC Darty — ESG QuickTake (13/09/2023)
TLDR: FNAC Darty, a French retail chain selling cultural and electronic products, has near term SBTi-verified targets (1.5Cº aligned) covering scope 1, 2 and 3, although it does not have a net zero target. The group offers repair services for all its devices and aims to have 2.5m products repaired each year by 2025. In February 2023, FNAC Darty received a notification of grievance from the French Competition Authority (ADLC). In 2022, five directors in the group were charged for money laundering according to a number of news outlets.
9fin Featured Content
Burdens and hogwash at ESG Investing Europe (13/09/2023)
9fin’s Head of ESG, Jack David, reflects on Reuters’ 2023 ESG Investing Europe Conference where speakers spoke of “burdens” and “hogwash” that surround ESG. The conference covers whether or not companies can actually meet their net zero targets, explores how investors are using ESG ratings, and of course, incoming regulation.
Video — Tightening the screws on sustainability-linked financing frameworks (08/09/2023)
How do you know if an issuer is gaming their sustainability-linked issuance?
Without a detailed analysis of the various aspects of the accompanying financing framework, you don't. In this video, our ESG Analyst Daniel Power provides insights into how 9fin evaluates sustainability-linked financing frameworks.
It covers important topics such as materiality, target ambitiousness, second-party opinions, margin ratchets, and callability.
HY News
Auto workers strike after contract talks with US car giants fail (15/09/2023)
Auto workers from Ford, General Motors, Stellantis have launched a series of strikes after the union failed to reach an agreement over a new contract with the US’s three largest auto manufacturers. The strikes involve 12,700 workers across the three major companies. Mary Barra, the chief executive of GM, said in a TV interview that the strike “will not be good for the economy overall”.
The Nielsen Company, a US based data analytics company, was ordered to pay $570,000 in back wages and interest by the US Department of Labor to resolve allegations of systemic race-based hiring discrimination at two of its Texas sites. As part of a conciliation agreement to address discriminatory hiring practices, the Nielsen Company will pay back wages and interest to 994 job applicants, extend job opportunities to 56 affected applicants, and take steps to ensure its personnel practices meet legal requirements.
Navient agrees to pay $700,000 to settle Labor Department allegations of hiring discrimination (11/09/2023)
Navient, a US based education loan service provider, has agreed to pay $700,000 in back wages and interest as part of a conciliation agreement with the US Department of Labour to resolve alleged hiring discrimination. A compliance review by the Office of Federal Contract Compliance Programs found that from 2017 to 2021, Navient discriminated against 427 black applicants at its Indiana Pennsylvania, and Texas sites. The review also found alleged hiring discrimination against 1,858 black and white applicants seeking clerical positions in Texas.
Uber to appeal Brazil court's $205m fine for irregular labour relations (15/09/2023)
Uber said it will appeal a decision from a Brazilian labour court ordering the company to pay $205m in fines for irregular working relations with the drivers on its app. The sentence stems from a lawsuit filed in November 2021 alleging Uber controlled the ways in which professionals’ activities should be carried out, “which constitutes an employment relationship”.
Heathrow Airport braced for October half-term chaos as baggage workers to strike (13/09/2023)
In October at the UK’s Heathrow Airport, members of Unite Union will strike for 13 days over a pay dispute. Around 170 baggage staff are expected to walk out. Unite’s leadership argues employees operating the baggage carousel services at the airport undertake an important safety and security role and the anticipated strike will bring baggage handling at the airport to a standstill.
News Stories
EU moots replacing Articles 8 and 9 status with product categories (14/09/2023)
The European Commission is reviewing the Sustainable Finance Disclosure Regulation (SFDR) through a new consultation and considers creating new categories for financial products. The SFDR outlines a set of disclosure requirements for EU market participants aiming to improve transparency around sustainability-linked financial products. But much criticism of the disclosure regime has led the EC to look for new ways to make the SFDR clearer. One idea opened up to debate in consultation is setting up a precise EU level product categorisation system.
Product hints, tips, and updates
Nine new SFDR-aligned ESG metrics (including UNGC/OECD violations, biodiversity-sensitive areas and cyber security incidents) have been added to 9fin’s ESG database. The initial upload covers 278 HY companies. There’s lots more to come, with a focus on private companies and loans issuers. Some examples:
