Primary analysis

Guala Closures — ESG QuickTake (9fin) (3/Oct)

TLDR: Guala Closures, an Italy based producer of closures for spirits and wines, has SBTi-verified emissions reduction targets and its renewable energy consumption is higher than its competitor Amcor. Its use of carbon offsets is not in line with good practice and this may present reputational and legal risks for the company. GC has been impacted by the war in Ukraine; its Ukrainian subsidiary has suffered financial losses and it has faced an increase in utility costs.

Secondary analysis

ESG Secondary Digest — Victoria Plc, RAC Group, Synthos (9fin) (3/Oct)

Find ESG secondary market coverage on Victoria Plc, RAC Group, and Synthos in this week’s Secondary Digest. A 2023 auditors report identified potential risks of fraud in Victoria’s subsidiary Hanover Flooring. RAC Group’s climate transition reporting has some shortfalls related to its emissions reduction targets and engagement with its suppliers. In 2022, Synthos was fined €32.5m for its involvement in the styrene buyers cartel.

HY Company news

Auto safety investigators expand Ford probe to nearly 709,000 vehicles (2/ Oct)

In 2022, the Office of Defects Investigation (ODI) began investigating the 2021 Ford Bronco following complaints of catastrophic engine failure. The investigation has expanded to include nearly 709,000 vehicles across Ford’s product lines including the 2021-2022 F-150, Edge, and the Explorer. The ODI is opening an Engineering Analysis (EA) in order to evaluate the scope and frequency of the allegations and gather information to evaluate the effectiveness of Ford’s manufacturing improvements regarding the alleged defect. 

Space junk: US government issues first space debris fine (5/ Oct)

Dish Network, a US based TV company has been fined $150,000 by the Federal Communications Commission (FCC) for failing to remove a satellite out of orbit. This marks the first fine issued by the US government for space junk. Space junk risks colliding with other space equipment and could disable a spacecraft. 

Judge greenlights North Carolina PFAS class action against DuPont, Chemours (6/ Oct)

A US District Judge has allowed over 100,000 North Carolina residents to bring claims against Chemours and DuPontover toxic water pollution as a class action. The suit claims that the companies dumped wastewater containing per-and polyfluoroalkyl substances, commonly known as PFAS, into the Cape Fear River for decades. 

Court orders operators of 14 Bay Area Subway locations to pay employees nearly $1m in wages, damages; sell or shut down their businesses (29/ Oct)

The US District Court for the Northern District of California has ordered the owners and operators of 14 Subwayrestaurants to pay employees nearly $1m in back wages and damages. Federal investigators found that they directed children to operate dangerous equipment, assigned minors to work hours not permitted by law, failed to pay employees their wages regularly, and illegally kept tips left by customers. The court’s order requires the owners to sell or shut down their business by 27 November 2023 to resolve the case. 

News Stories

Climate change the ‘most common’ reason for portfolio exclusion (9/ Oct)

Findings from a coalition of non-profit environmental and sustainability groups show that 40% of portfolio exclusions are motivated by concern over climate change. This exceeds 17% of exclusions driven by a company's involvement in weapons manufacturing and 12% for tobacco companies. Cenovus Energy, Suncor, and ExxonMobil were among the companies most excluded by investors for their involvement in fossil fuels. 

ESG ratings: whose interests do they serve? (3/ Oct)

European lawmakers are set to debate a proposed law that would require ESG rating agencies to disclose more details about their methodologies and formally register with authorities. The European Commission said that ESG rating firms face conflicts of interest in three main areas including 1) the sale of ratings, data, and indices to the same investor clients, 2) the sale of consultancy services to help companies improve their ratings, and 3) charging companies to display their own rating on financial products. 

ESG ETFs fail to shine over past 10 years (27/ Oct)

Analysis by Scientific Beta, an index provider and consultancy found US equity ETF’s categorised as either 'socially responsible' or ESG from 2012 to 2022 had average annual returns of 0.2 percentage points lower than non-ESG ETFs. The undershoot fell to 0.1 points however when returns were adjusted for the market risk exposure of portfolios.