Primary analysis

Nemera — ESG QuickTake (9fin) (8 Dec)

TLDR: Nemera, a France-based manufacturer of pharmaceutical products, has an SBTi verified 1.5ºC aligned near term target and a net zero target in line with good practice. Nemera’s resin-based products and its metered-dose inhalers (pMDIs) present environmental risks. Nemera also sells dry powder inhalers (DPIs) which have a limited impact, however, it does not report the proportion of DPIs it sells. Nemera reports it is investing in research and development to mitigate the impact of its products, but it does not report its capex aligned with sustainability initiatives. Nemera may be exposed to financial risks because of its operations in water-stressed areas and flood zones. Nemera reports some measures to engage its suppliers on environmental and social issues although there are some limitations to its approach.

UPDATE — Synlab — ESG QuickTake (9fin) (7 Dec)

TLDR: Synlab, a medical diagnostic services and clinical laboratory group based in Germany, does not have emissions reduction targets that address its scope 3 emissions, which likely account for the majority of its emissions. The company's proposed use of carbon offsets may not be in line with good practice due to the lack of a long-term net zero target. Synlab handles large amounts of personally identifiable information (PII) and reports some cyber security measures in line with good practice. In 2023, the National Police Chiefs' Council (NPCC) concluded its review of Synlab’s practices following an error in its laboratory that resulted in the withdrawal of hundreds of drug-driving cases.

9fin featured content

UPDATE — Entain — UNGC/OECD Compliance Framework (9fin) (8 Dec)

Entain will pay a £615m settlement in a Deferred Prosecution Agreement with the Crown Prosecution for failing to prevent bribery by its former Turkish subsidiary to resolve an investigation by HM Revenue & Customs. Entain has agreed to pay £585m to settle the case and the group will also donate £20m to charity and set aside £10m to cover HMRC’s legal costs. 

Hendrix Genetics sale watches as ESG concerns tower (9fin) (8 Dec)

According to 9fin sources, Hendrix Genetics is up for sale from US sponsor Paine Schwartz Partners. However, the sale is struggling to find sponsors interested in the business due to ESG concerns surrounding the animal genetics industry. 

HY company news

Trafigura sets aside $127m provision for Brazil, U.S. DOJ fine (6 Dec)

Trafigura reported that it was setting aside $127m to cover a potential penalty by the US Department of Justice to end an investigation into improper payments by the company in Brazil. Trafigura is also under investigation by the Office of the Attorney General of Switzerland for allegedly failing to prevent unlawful payments via a third party to a former employee of Angola’s state oil company between 2009-2011.

Former chair of Ohio utility regulator surrenders in $60m bribery scheme linked to energy bill (4 Dec)

Ohio’s former chair of the Public Utilities Commission surrendered to a US District Court after being charged in an 11 count indictment related to a $60m bribery scheme. In November 2020, the former chair, Sam Randazzo, resigned after FirstEnergy revealed in security filings bribery payments of $4.3m. FirstEnergy admitted to its role in the bribery scheme as part of a 2021 deferred prosecution agreement with the US Department of Justice and paid $230m in penalties. 

Panera Bread’s charged Lemonade blamed for a second death, lawsuit alleges (5 Dec)

Panera Bread’s Charged Lemonade has been linked to a second death according to a new lawsuit. Panera’s highly caffeinated drink was called a “dangerous energy drink” in the first lawsuit which argued that Panera failed to appropriately warn consumers about its ingredients. A large Charged Lemonade has 390 mg of caffeine which has more caffeine than standard cans of Red Bull and Monster energy drinks.

Airline adverts banned over ‘greenwashing’ claims (6 Dec)

The Advertising Standards Authority has banned adverts by Air France, Lufthansa and Etihad for misleading consumers about the airlines' environmental impact. The regulator argued that the ads did not show the impact airlines have on climate change. Lufthansa and Etihad removed the ads however, Air France did not provide a “substantive response” to the regulators investigations. 

COP28

COP28 enters crunch time with countries at odds over fossil fuels (11 Dec)

Countries at the UN climate summit are pushing for a final agreement that includes language to call for a “phase out” of fossil fuels. However, the US and countries in Europe, are facing strong opposition from states like Saudi Arabia, Russia, Iraq and Iran who have resisted attempts to include the phase out of fossil fuels in the COP28 deal. 

Global CO2 emissions from fossil fuels to hit record high in 2023 — report (5 Dec)

A report by the Global Carbon Budget found that fossil fuel emissions are set to hit record highs this year, increasing 1.1% from 2022 levels according to the report. The professor who led the research on the report said that it “now looks inevitable we will overshoot the 1.5°C target of the Paris Agreement.” Scientists have found that an increase above 1.5°C will have severe environmental impacts.

COP28 finance leaders try to revive decimated carbon credit market (5 Dec)

Banks, regulators, and top officials at COP28 are attempting to revive the voluntary carbon credits market following serious allegations of a lack of credibility. The proposed standards include checking that emissions reduction is credible and ensuring there is no double-counting between countries and companies claiming the credit. The US state department introduced the Energy Transition Accelerator framework which would allow power sectors to start selling emission reductions from April next year to help fund a transition towards cleaner energy. On 11 December, the EC agreed to a new EU certification framework for carbon removals aimed at increasing their use, and building trust with stakeholders to counter greenwashing.

Regulation Roundup 

SEC delays hotly anticipated climate disclosure rule… again (8 Dec)

The US SEC has further delayed its climate disclosure rule until April 2024. However, legal action could delay the the implementation of the rule even if it is finalised in April. The rule, which was initially scheduled for the end of 2023, was delayed as the SEC considered around 17,000 responses to its consultation. The inclusion of scope 3 emissions in the proposed regime has been a point of contention surrounding the proposal. 

EU nears deal to regulate ChatGPT, Other AI Tech in Landmark Act (7 Dec)

EU representatives remain divided as they negotiate regulation of artificial intelligence. While some progress was made around including a provisional deal on generative AI tools, other forms of AI like biometric surveillance were sticking points. The EU parliament backed a complete ban on facial scanning technology, however EU countries have proposed a compromise that would allow AI-powered cameras that identify people suspected of committing crimes.