AUSTRALIA

COLUMN-Eight kids and a nun may have doomed coal's future: Russell

Clyde Russell

Sun, May 30, 2021, 

(The opinions expressed here are those of the author, a columnist for Reuters.)

By Clyde Russell

LAUNCESTON, Australia, May 31 (Reuters) - A court ruling that Royal Dutch Shell must speed up plans to curb greenhouse gas emissions rocked the global oil and gas industry, but another decision in a case brought by eight school-aged teens and a nun may end up being more significant.

The order by a Dutch court that Shell must drastically deepen its planned emission reductions raised fears in the industry of similar legal actions against other oil and gas majors, and concern that companies will be held liable for meeting court imposed climate change targets.

The decision against Shell, coupled with shareholder rebukes against U.S. oil majors Exxon Mobil and Chevron, made it a bad week for an industry that is grappling with how to deal with the challenge of operating profitably and sustainably in what is likely to be a carbon-constrained future.

An Australian court added fuel to the fire on May 27, ruling that the country's environment minister has an obligation to children to consider the harm caused by climate change when deciding whether to approve a coal mine expansion.

The Federal Court of Australia made the ruling in a class action suit brought by eight teenagers, aged between 14 and 17, and an 86-year-old nun acting as their litigation guardian. In the suit, the teens argued that the expansion of Whitehaven Coal's Vickery mine in New South Wales state would contribute to climate change and endanger their future.

Australia is the world's largest exporter of coking coal used to make steel and second-biggest in thermal coal for power generation, and the industry - domestically and abroad - has become a political battleground.

The court ruling was only a partial victory, though, as the judge didn't grant an injunction to prevent Environment Minister Sussan Ley from approving the mine.

The ruling does mean the minister will have to consider her duty of care to future generations, with Justice Mordecai Bromberg saying the minister can foresee the possibility of the climate damage from the coal mine.

The judge said there is evidence of the "severe harm" climate change can cause future generations.

"It will largely be inflicted by the inaction of this generation of adults, in what might fairly be described as the greatest intergenerational injustice ever inflicted by one generation of humans upon the next," Bromberg said, according to a report in the Financial Times.

WIDER IMPACT

Australia's federal government said it will study the judgment, and it's likely the implications go well beyond a 10 million-tonnes-per-year coal mine.

The obvious end point of the case is that citizens will be able to sue the government for damages caused by climate change, using the argument that the government was well aware of the risks but still took actions that contributed to increasing carbon emissions.

If the government deems the risk of being sued by its own citizens to be high, it may have to concede that approving more coal will be challenging.

For its part, Whitehaven Coal welcomed the decision not to grant the injunction against its planned mine expansion, and will work to get a final approval from the federal government.

The company also made the curious statement that it foresees a continuing role for what it termed "high-quality coal" in contributing to "global CO2 emissions reduction efforts".

The only way burning coal from Whitehaven's mine could be deemed to be helping reduce emissions is if it were replacing even dirtier, lower-quality coal, or perhaps if the end user was capturing all the emissions and storing them.

There is no evidence to support either assertion and Whitehaven's stance is at odds with a recent paper from the International Energy Agency that called for an end to the funding and development of fossil fuel projects.

The one factor in common in the Dutch and Australian rulings is that for companies and governments the risks of legal actions and being held accountable on climate change-related issues are not only very real, but also increasing.

Environmental activists have finally realised that hitting companies and governments with potentially massive liabilities is a far more effective strategy than having protesters chain themselves to mining equipment or staging similar high-profile but ultimately low-impact demonstrations. (Editing by Tom Hogue)

Exxon Mobil’s Last-Ditch Attempt to Stave Off a Climate Coup

Scott Deveau, Saijel Kishan and Joe Carroll

Sat, May 29, 2021, 

(Bloomberg) -- It was a stunning moment for Exxon Mobil Corp. and the wider corporate world: a tiny activist fund had succeeded in changing the company’s board.

But in the hours leading up to this week’s annual shareholders meeting, Exxon went to extraordinary lengths to head off the threat from a campaign about which it had been largely dismissive months earlier.

Exxon telephoned investors the morning of the ballot -- and even during an unscheduled, hour-long pause during the virtual meeting -- asking them to reconsider their votes, according to several of those who received calls. Some said they found the last-ditch outreach and halt to the meeting unorthodox and troubling.

“It was a very unusual annual general meeting,” said Aeisha Mastagni, a fund manager at the California State Teachers’ Retirement System, a major Exxon investor that backed the activist campaign from the beginning. “It didn’t feel good as an investor.”

The May 26 meeting concluded with Exxon stating that two of the dissident’s four director nominees had been elected, a coup for Engine No. 1, a little-known investment firm calling for the company overhaul its strategy, cut costs and come up with a plan to address climate change. Its victory is widely seen as a warning to the rest of the industry that investors will now hold energy companies to account for environmental concerns.

The full results of the vote still haven’t been disclosed; a third Engine No. 1 nominee is still in the running to fill one of the two remaining board seats. While there’s no suggestion Exxon broke any rules during Wednesday’s meeting, such tactics are unusual for a blue-chip company.

In response to questions about the meeting, the company said it’s been “actively engaged” with investors and welcomes the newly elected directors.

Net Zero

Exxon opposed Engine No. 1 from the outset. The fund holds a stake in Exxon of just 0.02%, valued at about $54 million. The oil company described the fund’s four candidates as unqualified and said its proposals would imperil Exxon’s dividend.

Still, the company made a concession in March to another investor, D.E. Shaw & Co., appointing two new directors, including activist investor Jeff Ubben. But Exxon still refused to meet with the Engine No. 1 candidates.

A significant hurdle faced by the company was winning support of large institutions including its top three investors, Vanguard Group Inc., BlackRock Inc. and State Street Corp., which collectively hold a stake of more than 21%. BlackRock has been vocal about its voting guidelines on climate change.

Discussions with many large investors in the run-up to the vote were primarily focused on Exxon’s strategy to get to net zero emissions by 2050, and not the company’s financial performance, according to people familiar with the talks. Chief Executive Officer Darren Woods got down in the trenches during the proxy fight and made commitments to keeping the dialog going after the meeting, the people said.

But Vanguard, BlackRock and State Street ultimately supported a partial slate of nominees from Engine No. 1.

An indication the fight might be tilting in Engine No. 1’s favor came mid-May with the partial backing from two leading proxy advisory firms. Two days before the vote, Exxon said it would appoint two new directors, one with “climate experience” and another with industry expertise.

‘Banana-Republic Feel’

On the morning of the meeting, Engine No. 1 issued a statement alerting shareholders that Exxon may try, “in a targeted manner,” to persuade them to change their vote.

Sure enough, by the time the virtual meeting began at 9:30 a.m. Dallas time, Exxon representatives were ringing investors. In some cases, those calls entailed cajoling holders to at least reduce their support to one or two dissident nominees rather than all four, according to people familiar with the conversations, who asked not to be identified because the discussions were private.

At about 10:15 a.m., investor relations head Stephen Littleton announced proceedings would be paused for 60 minutes, citing the volume of votes still coming in. As classical music played on the webcast, emails started flying between investors left bewildered by the halt.

One executive at a major Exxon shareholder said they were contacted during this hiatus and pushed to change their vote. The person, who has decades of experience dealing with boardroom elections, said that while such appeals a day before a vote are commonplace, it was the first time they’d fielded such a request during a meeting.

Meanwhile, Engine No.1 released another statement saying shareholders should “not be fooled by ExxonMobil’s last-ditch attempt to stave off much-needed board change.” Charlie Penner, head of active engagement at Engine No. 1, went on television to complain.

“They’re doing a tactic called the whittle-down, where they tell a shareholder to draw down your votes for this person, they tell another shareholder they’ll draw down their votes for this person, and they gradually try to whittle people down,” he told CNBC. “It has a very banana-republic feel.”

The pause was something that Anne Simpson -- the California Public Employees’ Retirement System’s managing investment director for board governance and sustainability -- had never seen before in her three-decade career.

Simpson didn’t get a call from Exxon about altering her votes. But the practice still disturbed her. “If the comments are true, this raises the question about the sanctity of the ballot box and whether companies should have privileged access,” she said.

The meeting didn’t conclude until almost three hours after it first began, with Littleton reading out a summary of the preliminary tally of votes.

“We welcome the new directors Gregory Goff and Kaisa Hietala to the board,” Woods said in his concluding remarks, “and look forward to working with them constructively and collectively on behalf of all shareholders.”

BOURGEOIS ECONOMICS

’Contagious unemployment’ — a controversial theory why companies have difficulty hiring workers

Published: May 30, 2021 
By Quentin Fottrell

‘Unemployed workers send over 10 times as many job applications in a month as their employed peers, but are less than half as likely per application to make a move’


Some states are offering return-to-work bonuses of up to $2,000 to incentivize workers to get reemployed. GETTY IMAGE

Companies are struggling to find recruits, and economists, lawmakers and businesses big and small are wondering why. The latest hypothesis, proposed in a new working paper, is “contagious unemployment.”

Some states, including Arizona, Montana and Ohio, are offering return-to-work bonuses of up to $2,000 to incentivize workers to get reemployed. Arizona is providing funds to cover three months’ worth of child-care costs for those who return to work and earn less than $25 an hour.

The backdrop: Businesses reported a record 8.1 million jobs to fill last month, up from 8 million in March, according to Labor Department data. There were 7.5 million open jobs in February. And yet the unemployment rate ticked up to 6.1% in April from 6% the month before.

Employers and lawmakers have speculated that enhanced unemployment benefits have given people less of a reason to take a job. President Biden in March approved $300 in extra federal benefits each week to unemployed workers until September. (Some 22 Republican-led states will end them early.)

‘During periods of high unemployment, it consequently becomes harder for firms to assert who is a good fit for the job.’— Niklas Engbom, assistant professor at New York University Stern School of Business

There is also a host of other theories on why people are not taking jobs, among them lack of transportation, low wages, the cost of child care, caring for an elderly relative, recovering from COVID-19 or caring for a relative who has the coronavirus, and inability to work due to a disability.

But a new paper looking at job hunting after a recession has another — perhaps more controversial — theory, described by its author as “contagious unemployment.”

The ways in which workers search for jobs have been shown to have critical implications for the macroeconomic propagation of labor-market shocks, Niklas Engbom, an assistant professor at New York University Stern School of Business, wrote in his paper distributed Monday by the National Bureau of Economic Research.

“Unemployed workers send over 10 times as many job applications in a month as their employed peers, but are less than half as likely per application to make a move,” he wrote. “I interpret these patterns as the unemployed applying for more jobs that they are less likely to be a good fit for.”

“During periods of high unemployment, it consequently becomes harder for firms to assert who is a good fit for the job,” he added. “By raising the cost of recruiting, a short-lived adverse shock has a persistent negative impact on the job finding rate.”

Workers also pivot to other industries, which also may contribute to scattershot applications and “greater idiosyncratic volatility,” Engbom argued. “For instance, the construction sector contracted in the Great Recession, necessitating the reallocation of workers to other sectors,” he added.

What the News Means IB

Engbom floated one controversial solution to this “contagious unemployment” problem: “The findings in this paper suggest that firms may want to charge applicants a fee in order to discourage workers from applying for jobs that they think they would be unlikely to be a good fit for.”

He wrote, “Firms may worry that such fees would particularly discourage poor but suitable candidates from applying,” later adding, “scam firms would have an incentive to charge fees but never hire, such that no worker would be willing to apply to a job that required a fee.”

Hiring managers share the responsibility

Leaving the myriad logistical and ethical issues charging for applications would raise, other research squarely points out that “contagious unemployment” works both ways, and both applicant and company share the responsibility of finding the right position and person.

Large companies frequently outsource the hiring process. Approximately 75% of recruiters and talent managers use at least some form of recruiting or applicant-tracking software. That leaves applicants at the mercy of A.I., meaning the right candidate may not make the digital cut.

Writing in the Harvard Business Review, Peter Cappelli, the George W. Taylor professor of management at the Wharton School and a director of its Center for Human Resources, advises companies to track the percentage of openings filled from within and require that all openings be posted internally.

He says companies should take more responsibility for the hiring process from start to finish, including designing jobs with realistic requirements, reconsidering their focus on “passive” candidates (those, in other words, who are not currently seeking a job) and understanding the limits of internal referrals.

Willis HR, a South Carolina human-resources consulting and recruiting company, recommends companies follow a five-step plan when hiring new employees: align process with brand values, move quickly and efficiently, structure your interviews, boost your candidate sourcing, and don’t leave people in the dark.

Core values define what an organization is all about, the company says: “For existing employees, it can help keep you and your team members working consistently with one another. For new and prospective employees, it’s an indication of whether they fit with your corporate culture.”

Ultimately, the hiring industry pays too much attention to ‘the funnel’ of job posting, résumé tranche and interview process, Cappelli wrote. “Unfortunately, the main effort to improve hiring — virtually always aimed at making it faster and cheaper — has been to shovel more applicants into the funnel.”

“Employers do that primarily through marketing, trying to get out the word that they are great places to work,” he added. “Whether doing this is a misguided way of trying to attract better hires or just meant to make the organization feel more desirable isn’t clear.”

Fed Admonishes Deutsche Bank for Ongoing Compliance Failure

Robert Schmidt and Jesse Hamilton
Sat, May 29, 2021, 




(Bloomberg) -- The Federal Reserve has privately told Deutsche Bank AG that its compliance programs aren’t up to snuff, signaling that the scandal-plagued bank is failing to adhere to a number of past accords with U.S. regulators, according to people familiar with the matter.

The Fed’s recent warning came in an annual regulatory assessment that said Deutsche Bank hadn’t improved its risk management practices despite being under confidential agreements with the central bank to fix the issues, the people said. The assessment letter has the German bank’s leaders bracing for potential sanctions, including the possibility of a large fine, said one person briefed on the matter.

The Fed’s latest admonishment is a setback for Chief Executive Officer Christian Sewing, who has been working diligently to repair Deutsche Bank’s relations with banking supervisors following a tumultuous period in which the lender stumbled from one crisis to the next. He now has a new hurdle to overcome -- and it’s likely a big one.

Deutsche Bank spokesman Dylan Riddle said the firm doesn’t comment on any communications it has with regulators. A Fed spokesman also declined to comment.

Deutsche Bank has had multiple dust-ups with U.S. regulators -- including foreign-exchange violations and ties to money-laundering cases. The lender has also been the subject of numerous Fed orders on how the company manages risks, and the firm’s efforts to overhaul its controls haven’t convinced the agency that the bank’s problems are behind it, the people said.

In a move that showed the firm is focusing on compliance issues, Deutsche Bank last week elevated Joe Salama, who had been general counsel for the Americas, to be global head of anti-financial crime and group money laundering officer. He succeeded Stephan Wilken, who had been in the post since October 2018.

While discussions with the Fed over Deutsche Bank’s ongoing missteps are in their early stages, the bank has faced similar rifts with the agency in recent years and been fined for them. The punishments include a $137 million settlement over allegations that traders rigged currency benchmarks and a $41 million penalty for money-laundering vulnerabilities.

Despite the Fed scrutiny, there are signs that Deutsche Bank has improved its risk management, at least in some areas. The firm emerged from the March collapse of Archegos Capital Management unscathed, while other banks that did business with Bill Hwang’s family office lost more than $10 billion combined.

The turn of fortune after years of gloom has lifted Deutsche Bank’s share price to outperform rivals as Sewing’s revamp has taken hold, and are up 38% this year.

Still, more trouble remains a possibility, as the Fed taking aim at the bank’s compliance systems shows. The stock is still trading at one of the steepest discounts to book value among European lenders with shares still far below their peak, and the bank has lost money in five of the past six years.

(Updates with share performance in ninth paragraph.)

More stories like this are available on bloomberg.com

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©2021 Bloomberg L.P.

Huge Canadian Pension Cuts AT&T Stake. It Bought Tesla, McDonald’s, and One Chinese Stock.

By Ed Lin

Updated May 29, 2021
BARRON'S NEWSLETTERS

A Canadian pension fund more than halved its AT&T stake in the first quarter. It also tripled its holdings of Tesla stock, and bought more McDonald’s and NIO shares.

David Paul Morris/Bloomberg

One giant public pension made major investment changes in the first quarter.

The Public Sector Pension Investment Board of Montreal halved its AT&T (ticker: T) stake in the first quarter, and nearly doubled its investment in electric-vehicle giant Tesla (TSLA). The agency also bought more shares of burger giant McDonald’s (MCD) and Chinese EV maker NIO (NIO).

The investment board disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission. As of March 31, the investment board managed more than $140 billion in assets.

The agency sold 963,848 AT&T shares to end March with 677,727 shares of the telecom giant.


AT&T stock rose 5.2% in the first quarter, just behind the S&P 500 index’s 5.7% rise. So far in the second, however, shares have slipped 2.8%, while the index has gained 5.8%.

AT&T shocked investors earlier this month when the company announced that its dividend would be reduced in the course of restructuring. AT&T is leaving the media business, and will focus on telecom. CEO John Stankey said the lowered dividend “will still be incredibly attractive relative to other dividend opportunities in the market.” Shares slipped after the announcement, but Stankey bought AT&T stock on the open market.

The investment board bought 44,860 more Tesla shares to end the first quarter with 104,410 shares.

Tesla stock has been rolling downhill so far in 2021. Shares slipped 5.3% in the first quarter, and so far in the second they have lost 6.4%.

A string of unfavorable headlines have weighed on Tesla stock as of late. Still, shares are liable to rise sometimes on no apparent news. Tesla’s large position in Bitcoin could have dipped into the red with the cryptocurrency’s drop. In any case, CEO Elon Musk has said Bitcoin would no longer be acceptable for payment for Tesla vehicles, citing environmental reasons.

McDonald’s stock rose 4.5% in the first quarter, and so far in the second, it has gained 4.3%.

The fast-food-giant crushed estimates when it reported first-quarter earnings in late April. McDonald’s in May said it was increasing wages in company-owned stores.

The investment board bought 57,450 more McDonald’s shares in the quarter to end with 430,251 shares.

The agency bought 69,077 more NIO American depositary receipts to raise its investment to 192,337 ADRs.

NIO ADRs tumbled 20% in the first quarter, and have slipped 1.0% so far in the second.

NIO faces the chip shortage that is hurting several industries, and increased competition. NIO has noted that it expects the semiconductor issue to ease over June and July.

Canada’s Largest Pension Funds Stick To Lucrative Oil Sands Bets











Editor OilPrice.com
Sun, May 30, 2021


Canada’s oil sands industry is too carbon-intensive for the environmental, social, and governance (ESG) targets of some of the world’s largest institutional investors. But not for Canada’s own pension funds.

The five largest Canadian pension funds, which manage US$1.2 trillion in total assets, saw their combined investment in the U.S.-listed shares of the major oil sands producer surge by 147 percent in the first quarter of 2021, to a total of US$2.4 billion, according to a Reuters analysis of filings to the SEC.

Most of the jump in the value of investments of the pension funds merely reflected the rise in share prices of stock already held. Yet, the funds also bought more shares in the largest Canadian oil sands producers, according to the Reuters analysis.

Regardless of the way in which the pension funds boosted investment in oil sands in the first quarter, the fact remains that unlike other pension funds and some of the world’s largest sovereign wealth funds, Canada’s pension funds have not pledged or made divestments in one of the most emissions-heavy way of producing oil.

The funds, Canada Pension Plan Investment Board (CPPIB), Caisse de dépôt et placement du Québec (CDPQ), Ontario Teachers’ Pension Plan (OTPP), British Columbia Investment Management Corp (BCI), and the Public Sector Pension Investment Board (PSP) collectively increased the value of their investments in Canadian Natural Resources, Suncor Energy, Cenovus Energy, and Imperial Oil, according to the Reuters analysis.

Some of Canada’s pension funds have committed to carbon-neutral portfolios by 2050. Commenting on the analysis for Reuters, a PSP Investments spokeswoman said many of the fund’s investments were in passive portfolios tracking stock indexes. Representatives of other funds told Reuters that their exposure to fossil fuels as a whole is a tiny percentage of total assets held.

Nevertheless, the funds have been criticized by activists for not doing enough to account for climate risk in their portfolios by divesting from the oil sands business.

Related: Biden Defends Alaska Oil Project

Commenting on this week’s high-profile case in which a Dutch court ordered Shell to slash emissions, holding it directly responsible for contributing to climate change, pension activist group Shift said: “Pension funds take note: This case highlights the growing climate-related legal risks faced by oil and gas companies amidst a wave of litigation against the fossil fuel producers most responsible for the climate crisis.”

“We have a big problem with pension funds saying we believe in engagement, not divestment, but there’s no sign of this engagement,” Shift’s director Adam Scott told Reuters.

Other institutional investors and pension funds have already dumped their stakes in oil sands companies.

In May last year, Norway’s Government Pension Fund Global, the world’s largest sovereign fund which has amassed its enormous wealth from Norway’s oil, decided to exclude Canadian Natural Resources, Cenovus Energy, Suncor Energy, and Imperial Oil over “unacceptable greenhouse gas emissions.” Even the Public Investment Fund (PIF), the sovereign wealth fund of the world’s largest oil exporter Saudi Arabia, has recently sold all the 51 million shares it held in Suncor.

Among pension funds, the New York State Common Retirement Fund said last month it would divest its US$7-million investment in Canadian oil sands firms after determining that seven companies “failed to show they are transitioning out of oil sands production.”

The evaluation of the fund’s oil sands holdings are part of a broader review of climate risk in energy investments, and the fund will next evaluate shale oil and gas companies, it said.

The Bank of Canada also warned in its latest Financial System Review (FSR) from earlier this month that climate-related vulnerabilities are first among “ongoing issues that we all need to take seriously now to protect our financial system and economy in the future.”

“The potential impact of climate risks is generally underappreciated, and they are not well priced. That means the transition to a low-carbon economy could leave some investors and financial institutions exposed to large losses in the future,” Bank of Canada Governor Tiff Macklem said.

By Tsvetana Paraskova for Oilprice.com

IT'S CALLED SOCIALISM

Ford Foundation president: ‘We need a new form of capitalism’ to ‘level the playing field’



‘We are far from turning the corner, but we have begun to see some progress’: Darren Walker

Darren Walker, Ford Foundation President, joins Yahoo Finance’s Kristin Myers to discuss how the Ford Foundation has been paving the way for more equality in the United States, being one of the largest, private, charitable organizations in the country, and what has been changed since the murder of George Floyd.



The capitalist system is in the biggest need of reform in America, said Ford Foundation President Darren Walker.

A former banker, Walker said he is “a believer that there is no better mechanism to organize an economy than capitalism. But I also, as an advocate for capitalism, have to acknowledge its shortcomings— and the reality that in the United States, we have actually never given real capitalism a chance. What we need is a new form of stakeholder capitalism that recognizes the importance of all stakeholders, including employees, the communities, and suppliers."

Walker said "the actual boardroom of corporations needs to change. If you look, a year ago, we had a third of the S&P that did not even have a single African-American director. I can assure you that if you do not have representation at the board, you are not likely to see material, sustainable change at the C-suite and within the company more broadly.”

"We've got to change the rules of the game so that people have an opportunity to compete on a level playing field,” he said.

Walker believes that last year was one of “racial reckoning of the kind we have never seen in this country, and certainly in our lifetimes,” as major companies acknowledged that “corporate America has failed Black America.”

“So there has been huge disappointment. And that disappointment was manifest in 2020. But the encouraging thing that came out of 2020 was the strong statements — Black Lives Matter and other statements by CEOs — with concrete, measurable objectives attached that give us time now, one year later, to assess just how much progress has been made.”

But despite the progress, Walker said, “We are far from turning the corner. But I do think we have begun to see some progress and some reasons for hope.”

'Hope is the oxygen of democracy'

In order for the American Dream to continue, the question wealthy and privileged people must ask is how much money and power they are willing to give up, Walker said.

“I am lucky enough to live in a country where a poor kid like myself could be born in the bottom 1% and find myself in the top 1%. And that can only happen in America,” he explained. “But if we want that to continue to happen, we have to not hoard all the privileges and all of the assets.”

In order for the “opportunity ladder” to continue to work, Walker explained, “we've got to have a system that does not compound the advantage of the already-advantaged, and compound the disadvantage of the already disadvantaged — and particularly the historically disadvantaged.”

“So we have to look at what are the systems that produce and reproduce inequality," Walker said. "Those systems are our education system, our access to capital systems, financial systems, and say, what do we need to do to change those systems?”

There’s something “fundamentally wrong,” he said, with a system where during a pandemic, privileged Americans are “better off” than most Americans that suffered financially. “We need to ask some questions to ensure that we still leave hope on the table. At the end of the day, the American dream of hope and aspiration is what fuels our society. Hope is the oxygen of democracy.”

“And if we allow it, hopelessness will be the end of our society,” Walker said. “And I believe in this country. I know there is no other nation like the United States of America, and my loyalty and faith in it is unwavering. But I also am sobered by the reality of what I see in this country, which is far too much inequality.”

Kristin Myers is a reporter and anchor for Yahoo Finance. Follow her on Twitter.

COMPASSIONATE CAPITALI$M

ESG investment as important as divestment from fossil fuels: former Bank of England governor

Akiko Fujita
·Anchor/Reporter
Sun, May 30, 2021

Since leaving the top post at the Bank of England last year, former Governor Mark Carney has arguably been the most vocal advocate, urging financial institutions to align themselves with emissions goals of the Paris Climate Agreement.

CARNEY WAS GOVERNOR OF THE BANK OF CANADA PRIOR TO BEING HIRED BY BOE. HE WAS BOC GOVERNOR DURING CRASH OF 2008-2009

But as shareholders increasingly step up pressure, and lawmakers call for stricter regulations around climate disclosures, Carney said fossil fuel divestments shouldn’t be the sole focus of tackling the global crisis. Speaking to Yahoo Finance Live, the United Nations Special Envoy for Climate Action and Finance, said investing in the green energy transition is as important as moving capital away from the biggest sources of greenhouse gases.

“We're shifting from risk to opportunity and, as I say, aligning value in the market with what we want in society,” said Carney, who is also the vice chair at Brookfield Asset Management.

Carney has pushed to do that, in part, by establishing the Glasgow Financial Alliance for Net Zero (GFANZ) last month, a UN-backed coalition representing 160 banks, asset managers, investors, and insurers. The combined group, responsible for more than $70 trillion in assets, represents the broadest financial industry effort to date, to decarbonize lending portfolios and other practices. The initiative, in particular, calls for financial institutions, including Morgan Stanley (MS) and Citigroup (C), to accelerate their transition to a net zero economy, while establishing science-based policies to reach that goal by 2050.

Banks will now be required to dramatically reduce lending to fossil fuel-related projects, but Carney stopped short of calling for an outright divestment from oil and gas.

“It's as much about investing in companies that are part of the solution, then, then it is about divesting. Obviously if a company doesn't have a plan, if it isn't moving to get its emissions down, it's very risky and they're going to be starved of capital. That's the reality of this transition,” Carney said. “But this is very positive and a very large opportunity. I think that's where most institutions are focused. Where's the world going, not what it's leaving behind.”

Mark Carney, Governor of the Bank of England, makes a keynote address to launch the private finance agenda for the 2020 United Nations Climate Change Conference (COP26) at Guildhall in London, Britain February 27, 2020. Tolga Akmen/Pool via REUTERS

The scope of the effort and willingness of financial institutions to comply with a largely voluntary initiative will likely determine its success. A recent analysis by nonprofit group CDP, which operates the world’s largest environmental disclosure system, found that portfolio emissions of global financial institutions were 700 times larger than their direct emissions. Nearly half of financial institutions surveyed indicated they do not conduct any analysis on how their portfolio affects the climate.

Still, banks have been under pressure to accelerate their low-carbon transmission because shareholders have tied the company’s economic performance and future financial risks to climate risks. Last year more than 600 investors requested detailed disclosures from 12,000 companies, documenting everything from energy procurement and carbon emissions, to water security and soft commodity drive deforestation, according to CDP.

Tighter climate-related restrictions

Regulators, government leaders, and central banks have all joined those calls. Last week, U.S. President Joe Biden signed an executive order instructing U.S. Treasury Secretary Janet Yellen to work with members of the Financial Stability Oversight Council to develop standards for required disclosures of climate-related financial risks. The Federal Reserve established a Supervision Climate Committee (SCC) to develop a framework for assessing firm risks. while the Bank of England updated its mandate, to prioritize green bonds and phase out the largest polluting firms from its part of its corporate bond portfolio.

But, states in the U.S. that largely rely on coal and natural gas, have pushed back against tighter climate-related restrictions on banks, highlighting the challenges of reigning in bank lending activity. In a letter addressed to U.S. Climate Envoy John Kerry, treasurers from 15 states threatened to withdraw assets from banks that reduce loans to fossil fuel companies, saying the Biden administration’s efforts would threaten jobs in their states.

Carney said GFANZ is focused on helping institutions develop a plan to transition away from fossil fuels and reducing portfolio emissions through carbon offsets, ahead of the COP 26 meeting in Glasgow this fall.

“What [financial institutions are] looking to do is work with companies to invest so that those companies can get their emissions down. That can mean renewable power [because] there's a huge boom and a huge requirement in renewable power,” he said. “In the end, if the financial sector is not driving— or helping to enable these emissions reductions, they just won't happen.’

VIDEO INTERVIEW
Mark Carney on new book ‘VALUE(S)’

ESG investment as important as divestment from fossil fuels: former Bank of England governor (yahoo.com)

Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita

You have the right to decline the COVID vaccine -- but here's why you could still lose your job

HONOLULU, Hawaii - Lt. Col. Ronald Cole, Public Health Command-Pacific's Human Health Services director and a public health nurse, receives the first dose of the Pfizer vaccine at Tripler Army Medical Center, Honolulu, on Dec. 23, 2020. The inoculation was part of the Department of Defense COVID-19 vaccine distribution and administration plan that is a phased, standardized and coordinated strategy for prioritizing, distributing, and administering COVID-19 vaccines to protect DoD personnel, maintain readiness, and support the national COVID-19 response.

Meaghan Ellis May 29, 2021

Even as COVID vaccine distribution stabilizes across the United States, there is still a substantial number of Americans who are refusing to take the vaccine. While everyone has the right to decline vaccination, there are growing debates about whether employers have to accept that decision or not.

Based on a survey conducted by the Arizona State University and the Rockefeller Foundation back in April, "almost 90% of employers who responded plan to encourage or require their employees to get vaccinated and that 60% intend to require proof of vaccination."


But is it legal? Could your employer really fire you for declining to take the COVID vaccine? According to Bloomberg, they very well could and maybe well within their rights.

Vaccine opposers argue that it is illegal to incorporate vaccine requirements, but a publication, explains why that may not be the case. According to one attorney, there is currently no legalese to restrict employers from enforcing vaccine requirements.

Erik Eisenmann, an attorney specializing in employment law, weighed in on the legalities surrounding Emergency Use Authorization language. "I am not aware of any court or agency at the state or federal level that has held that the Emergency Use Authorization language prohibits an employer from enforcing a vaccine mandate," Eisenmann said.

A number of other legal observers and employment law experts have also echoed similar perspectives. Nicholas Bagley, a University of Michigan law professor, admitted that while the argument appears plausible on the surface, it quickly dispels once you dig a bit deeper.

"The argument looks good for about a half-second, and then, as soon as you start digging, it starts to look much, much worse," Bagley said. He also admitted that the political ramifications surrounding the vaccine could also pose legal arguments.

He added, "I would expect that we see some case law fairly quickly. But once political sympathies are engaged, it just becomes a whole lot harder to predict."

However, these types of legal arguments could become more prevalent in the coming months. In fact, Mat Heck, a prosecuting attorney in Montgomery County, Ohio has made it clear that he plans to make it a requirement for his employees and he is confident that he is well within his rights.

"I've heard the whole spectrum," Heck said. "I've heard you just can't do it. I've heard the emergency use argument. I've heard you can't make your employees get a shot for any reason. But it's just not true."

Health workers sue Texas hospital over compulsory vaccinations - Washington Post

May 30 (Reuters) - A group of 117 healthcare workers at a Texas hospital filed a lawsuit in state court against their employer's mandate requiring all staff to get COVID-19 vaccinations, Washington Post reported https://www.washingtonpost.com/nation/2021/05/29/texas-hospital-vaccine-lawsuit/?utm_campaign=wp_main&utm_medium=social&utm_source=twitter on Saturday.

Employees of Houston Methodist Hospital said in the lawsuit that their employer's compulsory immunization requirement violated the Nuremberg Code, a set of standards designed after World War Two to prevent experimentation on human subjects without their consent, the Post reported.

They also said the hospital presented them with the choice of either getting a vaccine or losing their job, which violated state law, and asked the court to bar Houston Medical from firing unvaccinated staffers, the report said.

The report comes a day after the country's Equal Employment Opportunity Commission (EEOC) said companies could mandate that employees in a workplace must be vaccinated against COVID-19, amid a shortfall in demand for inoculations due to factors including ambivalence or skepticism about the vaccines.

Public health officials have been forced to try new strategies to persuade people to get the shots, with efforts that range from creative gimmicks to grassroots outreach resembling get-out-the-vote drives.

However, the vast majority of employers have been reluctant to require workers to be vaccinated. A survey by management-side law firm Fisher Phillips earlier this year found that only 9% of the more than 700 employers surveyed said they were considering mandating vaccines. (Reporting by Derek Francis in Bengaluru; Editing by Kim Coghill)