9fin Featured Content

Carbon offsets part 2 — Credibility queries for Arcelik, and many more? (9fin Educational) (20/06/2023)

In the second section of 9fin's two-part educational series on carbon offsets, we take a look at why offsets have been so heavily criticised, why offset purchases are now an ESG risk and what the future holds for voluntary carbon markets. Offsets certified by Verra in particular have come under media scrutiny. 9fin used its document search tool to identify LevFin companies that had bought or planned to buy Verra certified offsets; Harbour Energy, NewDay, Bonanza Creek, Puma Bitumen, Telecom Italia, Netflix, Arcelik, Trafigura, Accor, Eurofins and Hunkemoller. 

ESG Secondary Digest — Crown, Energia Group, Chemours, Owens Illinois (9fin) (22/06/2023)

Our latest analysis highlights that Crown is not yet on target to meet its SBTi-verified near term targets and that Energia Group has a range of assets crucial for decarbonisation. Chemours is involved in litigation related to per- and polyfluoroalkyl substances (PFAS) and has been issued big penalties related to its use in the past. Owens Illinois is on track to achieve the scope 1 and 2 emissions reductions implied in its SBTi-verified target. But it has not reported progress on its scope 3 target.

PPF — ESG QuickTake (9fin) (23/06/2023)

TLDR: PPF has yet to develop a strategy to cut its GHG emissions and lacks a deadline to become carbon neutral. The group has zero (0%) women on its board of directors, which is far behind its peers. The telecoms industry is increasingly at risk of cyber attacks, and PPF's reporting on its cyber security measures at the group level is limited. 

Idemia Group — ESG QuickTake (9fin) (22/06/2023)

TLDR: Idemia’s near term emissions reduction target is under review by the SBTi, although it does not have a net zero target. Given Idemia's provision of facial recognition and biometric technologies, the company has come under scrutiny from civil society groups regarding human rights. Idemia is highly exposed to cyber security risks due to its collection of personally identifiable information.

Civitas Resources — ESG QuickTake (9fin) (22/06/2023)

TLDR: Civitas Resources claims to be Colorado’s first carbon neutral oil and gas company, but it relies on buying offsets for its carbon neutrality claim, which is not aligned with good practice. Civitas lacks SBTi-verified targets and a long term carbon reduction target that includes its scope 3 emissions. Civitas may be at risk of reputational and regulatory risks due to increased activism against oil and gas exploration.

Clinigen — ESG QuickTake (9fin) (21/06/2023)

TLDR: Clinigen does not report its global GHG emissions and does not have emissions reduction targets. The group has no quantitative or time-bound targets related to gender or ethnic diversity. The NHS issued a National Patient Safety Alert in 2022 to recall three batches of Mexiletine Hydrochloride hard capsules manufactured by Clinigen due to potential dosage errors.

Entain — ESG QuickTake (9fin) (20/06/2023)

TLDR: Entain has committed to an SBTi-verified target and aims to align its decarbonisation targets to limit global warming to 1.5ºC. The group reports some measures to promote safer gambling, but it does not have quantitative KPIs or targets related to safer play. In 2022, Entain investigated 40 potential breaches of personal data.

Playtech — ESG QuickTake (9fin) (19/06/2023)

TLDR: Playtech has committed to setting near term and net zero SBTi-verified targets. Its only current target is quite unambitious. In 2020, Playtech paid £3.5m to charities tackling gambling-related harm following the suicide of a gambling addict who lost £119,000 in five days on one of the company’s brands. Regulation for the Italian gambling market is set to be reorganised in the coming months, which will likely have a material impact on Playtech.

Pepco — ESG QuickTake (9fin) (19/06/2023)

TLDR: Pepco has not set quantitative emissions targets and does not report scope 3 emissions. In 2022, the group recalled some of its children’s toys due to high chemical content. Steinhoff International owns 72.3% of Pepco's issued share capital, and in 2017 its owner was found to have recorded fictitious or irregular transactions totalling €6.5bn. However, Pepco Group and its existing subsidiaries were not involved in the scandal.

HY company news

Big UK retailers named and shamed for failing to pay minimum wage (21/06/2023)

More than 200 companies have been fined a total of £7m for breaching rules that impacted 63,000 workers. Marks & Spencer, WH Smith and Argos are among the retailers fined. Marks & Spencer failed to pay almost £578,390.79 to 5,363 workers, according to The Department of Business and Trade. Find the list of companies that breached the minimum wage rules here.

EU consumer associations accuse airlines of greenwashing (22/06/2023)

Consumer associations from 19 European countries have lodged a complaint with the EU Commission against 17 airlines, claiming they misled consumers with information on environmental and climate protection. According to the European consumer association, Beuc, the system of so-called CO2 compensation — a voluntary climate protection surcharge when booking a flight — is nothing more than greenwashing. Consumer groups have called upon the EU Commission to investigate airlines including Lufthansa, , Ryanair, KLM and others.

Twitter accused of failing to pay millions in employee bonuses after Musk takeover (21/06/2023)

Twitter failed to pay out annual bonuses to staff after its acquisition by billionaire Elon Musk, despite multiple assurances from executives in the lead-up to the deal closing that the company would do so, according to a new lawsuit filed on behalf of employees. The lawsuit was filed in a San Francisco federal court on Tuesday by Mark Schobinger, who was a senior director of compensation at Twitter until he left the company late last month.

Federal investigators find JBS Foods failed to protect Green Bay plant worker from amputations by ignoring required safety standards (22/06/2023)

After a report of an amputation at JBS Green Bay in Wisconsin, federal safety inspectors found that workers at the processing plant were exposed to multiple hazards, including inadequate guards to protect employees from machines in operation. Occupational Safety and Health Administration (OSHA) cited JBS Green Bay Inc. for four repeat, four serious and two other-than-serious violations. Other infractions were related to lockout/tagout, fall and electrical hazards and hazard communication. The agency proposed $227,786 in penalties.

Ford Gets $9.2 Billion to Help US Catch Up With China’s EV Dominance (22/06/2023)

A US government programme is issuing a conditional $9.2bn loan to Ford to build three battery factories. The new factories that will eventually supply Ford’s expansion into electric vehicles are already under construction in Kentucky and Tennessee through a joint venture called BlueOval SK, owned by the Michigan automaker and South Korean battery giant SK On Co. Ford plans to make two million EVs by 2026. Its cars and SUVs made with domestic batteries will also be eligible for billions of dollars in incentives embedded in the Inflation Reduction Act’s $370 billion in clean-energy funding.

News stories

Definition of Sustainable Investment according to SFDR (03/04/2023)

The Association Française de la Gestion financière (AFG) published a note to improve the loose definition of “sustainable investment” provided in the Sustainable Finance Disclosure Regulation (SFDR). The SFDR defines a sustainable economic activity as contributing to an environmental or social objective, doing no significant harm to any other objective and following good governance practices. The AFG provided a set of recommendations to clarify this definition, including considering an investee entity as “sustainable” entirely, referencing the Sustainable Development Goals, using quantitative accounting methods, referencing the SBTi, and adopting climate transition plans.

A Common Path to Improve European Climate Risk Stress Testing and Scenarios Analysis (22/06/2023)

More than half of Europe's largest banks intend to consider nature-related risks within their stress testing and climate scenario analysis exercises in the next two years, according to a paper by European trade body the Association for Financial Markets in Europe (AFME). The paper also reports five major challenges around climate stress tests for EU banks. The first of these challenges is scope; a lack of materiality thresholds meaning that banks are unsure whether their stress tests cover areas not materially impacted by climate risks, such as market risks. 87% of banks surveyed agreed that materiality thresholds need to be defined based on exposure and climate riskiness before further stress tests are conducted.

Anti-ESG funds fail to gain traction in the US (20/06/2023)

Funds designed as alternatives to environmental, social and governance funds are losing sales momentum rapidly. A report from Morningstar focusing on the US market shows the funds’ sales peaked in the third quarter of 2022 at $377m, but have since plunged, hitting $183m in this year’s first quarter. 

“Although there’s been a lot of talk about anti-ESG funds, it’s not clear that they have staying power,” the report’s authors, Alyssa Stankiewicz and Mahi Roy, wrote. 

Green Bonds ‘On Track’ for Record Year After Busiest May Ever (12/06/2023)

Global sales of green bonds had the busiest May ever as governments brought large deals to fund their environmental goals. BNP Paribas SA, the market’s biggest underwriter, is predicting it will be a record year for climate-friendly bond sales. New sales of green bonds, the largest category of sustainable debt by amount, totalled $62.3 billion last month, making it the most active May since the inception of the green debt market in 2007, according to data compiled by Bloomberg.