Week 3 of strike at Kellogg’s plant in Lancaster; Secretary of Labor visits LANCASTER


by: Bryan MunozPosted: Oct 27, 2021 / 06:34 PM EDT / Updated: Oct 27, 2021 / 06:34 PM EDT

LANCASTER, Pa. (WHTM) — Secretary of Labor Marty Walsh visited the Kellogg’s plant in Lancaster County, where hundreds of workers have been on strike here for almost 22 days now.

“We want to fight for what we fairly believe is ours because at the end of the day if it wasn’t for the workers there would be no Kellogg’s,” Kerry Williams, the local union president, said.

These union employees, along with hundreds more at three other Kellogg’s plants across the country, want the cereal company to change a system that gives newer workers fewer benefits and lower pay.

That’s why Labor Secretary Marty Walsh was in Lancaster County today. He wanted to make one thing clear about why he was there.

PREVIOUS COVERAGE: Kellogg’s employees go on strike in Lancaster County, Saturday marks day 4

“To support the workers that are here today, to let me know that they are not alone, that we hear them and we stand with them,” Walsh said.

Walsh spent time talking to workers and hearing their stories and said the change they’re hoping to make through this strike would affect decades to come.

“They are exercising their right to free speech and trying to get better working conditions not just for them but for their families and for the generation of people that are coming behind them,” Walsh said.

PREVIOUS COVERAGE: Kellogg’s plant in Lancaster to continue with temporary non-union employees while strike continues

He understands the sacrifices being made to make this possible.

“When workers take the vote to strike, they take that very seriously because they understand that when they go on the street, they usually lose their rights for getting wages, money, and their healthcare,” Walsh added.

With strikes going on all across the country, the local union president has a message for everyone walking the line: “hold out as long as you can. one day longer, one day stronger.”

Contract talks to resume at Kellogg's amid cereal strike

OMAHA, Neb. (AP) — Contract talks between the Kellogg Co. and its 1,400 striking cereal plant workers are set to resume next week.

© Provided by Associated Press Larry Gamble, who has worked at the Kellogg plant for 13 years, and Sharnita Childress, who has worked at the plant for 8 years, picket with other union workers outside of the plant in Battle Creek, Mich. on Tuesday, Oct. 19, 2021. Around 1,400 union workers from Michigan, Tennessee, Pennsylvania and Nebraska have been on strike for the past two weeks. 

(Nicole Hester/The Grand Rapids Press via AP)

The Battle Creek, Michigan-based company said Tuesday that the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that represents those workers agreed to return to the bargaining table starting next Tuesday. The workers have been on strike since Oct. 5.

The strike includes four plants in Battle Creek; Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee that make all of Kellogg's brands of cereal, including Rice Krispies and Apple Jacks.

The company has said it's not clear how the strike will affect cereal supplies in stores because it has restarted production at all four cereal plants with salaried employees and outside workers.

Kellogg workers strike, denounce two-tier contracts

October 24, 2021





Republished from Socialist Resurgence’s website

By ERWIN FREED

On Tuesday, Oct. 5, workers at all four Kellogg plants in the United States walked off the job after failing to reach an agreement on a new contract. The old contract expired that day at midnight.

The Kellogg strike is the third national strike of a major food manufacturing company this year, following Nabisco and Frito Lay. All three companies, which together employ over 3000 workers, are organized with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM). Kellogg is the largest workforce of the three, with over 1400 workers between all of its plants.

The main issues that Kellogg workers are fighting for are against two-tier contracts and for maintaining and strengthening cost of living adjustments (COLA). The company made major revenue gains during the pandemic.

On Oct. 6, Socialist Resurgence members walked the picket line and spoke to striking workers with Local 374G at the 2050 State Road plant in Lancaster, Pa. That plant appears to be basically shut down. The small trickle of scabs and supervisors on site are inadequate to run the line at anything approaching full capacity.

Smash two tier! A lesson for the whole labor movement

The most burning issue spoken of by workers in Lancaster was the two-tier employment-track implemented in the 2015 contract. That change has created three tracks into which people are hired—“provisional,” “transitional,” and “legacy.” Basically, the only workers in the legacy category have been at Kellogg since before 2015. Provisional and transitional workers do not have the company-sponsored health-care or pension plans that the legacies maintain. The difference between the tiers was emphasized by one transitional worker we spoke with on the line, who emphasized that she makes at least $12 per hour less than her legacy co-workers for exactly the same job. All workers we spoke with talked about how the two-tier system causes frictions in the shop. The two tier was implemented with a false promise by the company that it would only be “temporary” and people hired into the lower tiers would quickly qualify for the full benefits of the original contract.

The decision to go on strike to maintain basic solidarity and return to a single wage scale for all workers is an example for workers in every industry. Two tier has been implemented across the country in thousands of shops with classic union benefits in order to stop workers from gaining a living wage, pension, health, and various fringe benefits. The set-up also pits workers against each other, with the lower tier angry that their fellow unionists are on a different track than they are, and the higher tier under constant threat of being fired so that the company can pocket the difference in costs.

Labor has been considering its options on how to fight two tier since the trend began with force in the 1980s. Kellogg workers are giving a definite example on how workers can fight and win against the divisions created by management. Following in the footsteps of the 2019 UAW strike at GM, which struck an important blow against two tier at one of the world’s richest companies, BCTGM workers are utilizing the working class’ most important weapon for the shop floor—going on strike.

Working conditions get worse

Kellogg was once a highly sought after place to work. In Lancaster, the plant used to be home to thousands of jobs with good union wages and benefits. Now, the company is having trouble hiring people into the lower tiers, and understaffing is rampant. Forced overtime is now a “done deal” and even workers who have been on the job for decades are often unable to get a single day off. Socialist Resurgence spoke to one warehouse worker who said that he is the only full-timer on his shift in the plant, which produces around 1 million pounds of cereal a day, and has to work back-to-back doubles every weekend, despite having worked for the company for 16 years.

Due to automation and a hyper-focus on the bottom line, hundreds, potentially thousands, of jobs have been permanently lost at Kellogg. The company is more concerned with profits than quality. In a burning example during the contract negotiations that led to two tier, the Memphis plant locked out workers for nine months in 2014. One of the scabs brought in to keep cereal production running urinated on the assembly line and was later indicted on charges of tampering with consumer products with the intent to cause serious injury.

Militancy rising

The working class in the United States is reaching a new level of militancy. The strike tactic, long growing dusty on the shelf, is being revitalized among a large number of industries in the face of economic, health, and climate crises. Over 84,000 workers are poised to potentially walk out by the end of the month in everything from health care to basic industry to film production.

Crain’s Detroit Business reports,“The number of actions is unusual. Kellogg says this is the first time its U.S. cereal workers have gone on strike since 1972. Nabisco workers last walked off the job in 1969.” While that article calls the strikes “rare,” the opposite appears to be the case as two tier is becoming a fight increasingly seen as necessary to take head-on.

Socialist Resurgence stands wholeheartedly with BCTGM workers on strike. We recommend that our readers do whatever they can in solidarity actions, from taking pictures and videos in support of the strike to walking the picket line.

Photo: Striking workers at the Kellogg plant in Lancaster, Pa. (John Leslie / Socialist Resurgence)

Kellogg's Puts Out Ad for Strike Replacement Workers 'to Cross the Picket Line'

BY EWAN PALMER ON 10/15/21 AT 5:17 AM EDT
The Kellogg company has posted a job advert seeking temporary workers to replace those currently on strike at the company's cereal production plants across the country.
More than 1,400 Kellogg employees walked out on October 5 at plants at Battle Creek, Michigan; Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee, threatening production and supply of some Kellogg's most popular cereals.
The company is now seeking production associates willing to "cross the picket line" and keep the production line running during the ongoing strike.
"While these are temporary positions at this time, they could lead to permanent opportunities in the future," the job advert on Kellogg's website states.
READ MORE Photo of Kellogg's Worker on Strike Braving Torrential Rain Goes Viral
The move to bring in non-union workers was predicted at the start of the strike by Daniel Osborn, president of the local Bakery, Confectionery, Tobacco Workers and Grain Millers International Union in Omaha. BCTGM has been contacted for comment.
The union has said the industrial action is over a contract dispute about health care, retirement benefits, and holiday and vacation pay.
It also said the company threatened to move American jobs to Mexico if they do not accept the terms of new contracts (offered on October 1) following the expiration of earlier contracts at midnight October 4-5.
The Kellogg Company has called the union claims "grossly misleading," and said it has "not proposed moving any serial volume of jobs outside of the U.S."
On Tuesday, the company released a video message featuring spokesperson Kris Bahner, warning it was "deeply concerned" about what the strike would mean for its employees.
"Being away from work puts our people and their families in a difficult position and can create financial hardships. Our number one priority is to get back to the negotiations table and reach a contract, so our employees can get back to their jobs and their lives. We're especially concerned that the union struck without allowing members to vote on the company's October 1 offer."

Workers demonstrate in front of the Kellogg's cereal plant on October 7, 2021, in Battle Creek, Michigan. The company has launched an advert seeking temporary workers during an ongoing strike. REY DEL RIO/GETTY IMAGES

READ MORE
List of Kellogg Products as Workers Go on Strike
Companies Hit By Worker Strikes in Recent Weeks, John Deere Latest Impacted
U.S. Workers Are on Strike Over 'Low-Wage S*** Jobs'—Ex-Secretary of Labor

Bahner denied that the company is asking workers to give up their health care, retirement benefits or vacations pay, and that the compensation and benefits they are currently on are some of the best in the industry.
Bahner also described the claims from the unions that Kellogg threatened to move jobs to Mexico if they don't agree to their proposals as "completely false."
"We've not proposed moving any serial volume of jobs outside of the U.S. as part of these negotiations. Kellogg is ready, willing and able to continue negotiations at any time.
"In the meantime, we have a responsibility to our business customers and consumers to run our plants despite the strike," she added.

Kellogg's Cereal plant workers demonstrate in front of the plant on October 7, 2021 in Battle Creek, Michigan. Workers at Kellogg’s cereal plants are striking over the loss of premium health care, holiday and vacation pay, and reduced retirement benefits.REY DEL RIO/GETTY IMAGES

Kellogg’s mobilizes scabs to break 

strike of 1,400 workers

Carlos Delgado

Food manufacturer Kellogg’s announced Wednesday that it plans to use white collar workers and “third-party resources” as scabs in a strikebreaking maneuver against the 1,400 workers who have launched a strike at its four US cereal plants this week.

Picket line in Omaha, Nebraska (source: BCTGM Facebook page)

The company announced on its “Kellogg's’s Negotiations” website that they are “implementing contingency plans to mitigate supply disruptions, including using salaried employees and third-party resources [hiring scab labor] to produce food.”

Workers on social media expressed outrage at the company’s actions. Several pointed to an incident that occurred in 2014 during an illegal lockout of the workforce at the company’s Memphis, Tennessee plant in which a scab worker recorded video of himself urinating on a conveyor belt of the puffed rice used to make Rice Krispies Treats.

Other workers noted the inherent safety hazard of bringing in workers unfamiliar with dangerous production equipment. Mark Gregory, a third shift mechanical operator, told a local news reporter, “They can try to run the plant. I know they think it's easy for us to run the plant, but it takes a lot of skill to run the facility. I hope nobody gets hurt. Equipment in there is very dangerous, we spend a lot of time learning how to run the equipment.”

Workers launched the strike Tuesday morning, shutting down four plants which account for all production of Kellogg's cereals in the United States: Battle Creek, Michigan (also the location of the company’s global headquarters); Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee. Kellogg's is one of the largest producers of cereals and snack foods, with products including Frosted Flakes, Rice Krispies, Pop-Tarts, and Pringles.

Kellogg’s workers are fighting against cuts to jobs, wages and benefits, and the expansion of the hated two-tier structure, which forces new hires to labor for less pay than their co-workers on the same line. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) agreed to the provision that created the second tier, which is currently capped at 30 percent of the workforce. The company is seeking to lift that cap and expand the number of ultra-exploited “casual” workers who receive a poverty wage.

In addition, workers have been forced to work under a brutal overtime regime during the pandemic, during which the company’s revenues have soared amid rising demand for snack products. According to its 2020 annual report, the company made $1.76 billion in profit on $13.8 billion in sales in 2020. Kellogg’s CEO Steve Cahillane received $11.6 million in total compensation in 2020, a nearly $2 million increase from his 2018 package of $9.9 million.

In a widely shared Facebook post, one Kellogg’s worker wrote, “Imagine if you started working at a job that proclaimed to have the best benefits. Then come to find out you will never ever see those benefits because you were hired in after a certain time...Then explain to your family that you put in for a day off months in advance for a special occasion only to be denied that day off...Explain to your family that Santa is going to be late cause you just got forced over 10 minutes before the end of your shift to work another 8 hours. Oh, and after you get home you only get 4 hours of sleep because you have to be back to work...This isn't about employees being greedy. This is about equality and quality time with family.”

The wife of another worker posted a picture listing the multi-million dollar compensation packages of Kellogg’s’ top executives, commenting, “Kellogg’s thinks it’s ok to pay new employees significantly less, and give them less benefits because the men and women who work SEVEN DAYS A WEEK YEAR ROUND cost the company too much money...let’s take a look at who is really costing the company too much money.”

The BCTGM union, meanwhile, has offered workers no serious strategy for victory. Earlier this year, the BCTGM forced through sellout agreements to shut down strikes of Nabisco and Frito-Lay workers, isolating Kellogg’s workers before their strike even began.

A Nabisco worker in Chicago warned Kellogg’s workers, “Make sure they count the votes in front of them. Because they didn’t count the votes In front of us, we all know that the union just wanted us to go back to work. At the end of the day is all about money. Do you really think that the union wanted to keep paying us? And also ask for more than $105 [in strike pay] that we got.”

After the sellout contract was forced through, he said, “We’re all still working about 20 plus hours overtime for nothing.”

Another Nabisco worker in Richmond expressed his support for Kellogg’s workers and said, “Fight for what you deserve.” He added, “Sixteen-hour days is the normal [shift] being forced over [on] us. The company does what it pleases,” while the union did nothing to stop the sweatshop conditions.

The BCTGM has been promoting reactionary nationalism to undermine the solidarity of workers at precisely the moment when international unity is most needed. Kellogg's is a multi-national corporation with factories in 18 different countries outside of the United States. Any serious strategy to defeat the company requires the international unity of US workers with their brothers and sisters around the world.

The BCTGM, however, is promoting “America First,” anti-Mexican chauvinism, claiming that workers must unite along national lines to prevent the company from relocating operations to Mexico. In a blatantly racist comment to Yahoo Finance, BCTGM Local 3G President Trevor Bidelman claimed, “You’re told quite rightly not to drink the water in Mexico. So I don’t know why you would want to eat the food that was made from that water.”

In fact, Bidelman and the union did nothing when Kellogg’s announced plans in September to cut 212 jobs from its Battle Creek workforce by 2023. According to a local news report at the time, Bidelman claimed he was “blindsided” by the proposed cuts and offered only the hope that the union could provide “input” on the company’s decision.

The BCTGM is promoting GoFundMe pages to “crowdfund” resources for striking workers, signaling to workers that they are going to be largely on their own to survive during the strike, even as the union sits on $32 million in assets and $11 million in income built from workers’ dues money. Both the union and the company fear the outbreak of a genuinely militant and independent struggle by workers, and they are no doubt working behind the scenes to shut the strike down as quickly as possible.

The gravest warning must be made against any illusions in the BCTGM. As at Nabisco, Frito-Lay, and countless other struggles in recent decades, the unions follow a tried-and-true strategy of isolating strikers, starving them out with meager strike pay, and ramming through a company-backed concessions contract when workers have reached the breaking point.

Kellogg's workers hold immense social power, and can win all their demands and more. However, victory will require workers to take the initiative into their own hands. The World Socialist Web Site urges Kellogg’s workers to immediately build rank-and-file strike committees comprised of the most militant and trusted workers to take the struggle into their own hands.

Such committees will facilitate the free sharing of information among workers at every plant, enabling workers to develop and implement a strategy for victory. They will allow workers to link up their struggles with those in Frito-Lay and Nabisco plants, as well as across other industries and internationally, in a common struggle for wages, benefits, and healthy working conditions.

Why Are Kellogg’s Workers On Strike?

Errol Schweizer

FORBES

Kevin Bradshaw, Vice President of BCTGM Local 252G and coworkers on the picket line at Kellogg's in ... [+] KEVIN BRADSHAW, BCTGM LOCAL 252G

Kevin Bradshaw is Vice President of BCTGM Local 252G in Memphis, Tennessee.

Dan Osborn is President of BCTGM Local 50G in Omaha, Nebraska.


Note: This interview has been edited for length and clarity.

Errol Schweizer: What is your role at Kellogg's?

Kevin Bradshaw: As an employee, I work in the warehouse, making the product and shipping it all over the world. I've been doing it for about twenty years. I'm the vice president of the local here.

Dan Osborn: My job at Local 50G is I'm president. Normally my role is the business end of the local union. Recently it's been to organize the strike that's going on right now, as well as talk to the media and get our message out. At Kellogg's, I'm a mechanic. I've been a mechanic for eighteen years. My attendance rate is 99% as a dedicated employee.

Errol: What are the issues here?

Kevin: The issue here is all about the future of the working person in America. Here at Kellogg’s it's about reducing the hourly wage rate. It's about cutting benefits, pension, retirement and health care that's essential for any working person in America and working person in the world.

We went into an impasse last year, about benefits and wages and insurance that were supposedly unsustainable for the company. And we pushed back because we wanted to work with the company in good faith. But the things that they're asking for are just outrageous. I mean, they're ridiculous. Taking someone's pay and cutting it by $13 an hour. There's no way to actually ever maximize pay, no way to retire with insurance or health care or pension plans. And to just work every day, seven days a week, twelve, sixteen hours a day, and never have anything to show for it at the end of your career.


Dan: Our CEO, from 2020 to 2021, has taken a twenty percent increase in his compensation, as well as the top executives, they've been taking increases. So this contract that expired on October 4th, we are currently on a two tier wage system. Thirty percent of employees are on a lower tier making eleven, twelve dollars an hour less, higher insurance premium, less vacation, lower vacation pay. So we're all about the equalization of wages, we want to bring those thirty percent up to the higher tier level of workers. The company's proposal was to eliminate that thirty percent cap and eventually get everybody on that lower tier while the company is making record profits.

BCTGM Local 50G members on the picket line at Kellogg's in Omaha, Nebraska. DAN OSBORN, BCTGM LOCAL 50G

Errol: How has the Covid-19 pandemic impacted working conditions?

Dan: 2020 is actually when this contract expired the first time. We worked under an extension of that same contract for a year up until October 2021. In 2019, Kellogg's Omaha did not hire any employees. They then shortened our numbers. In my business, we run a twenty four hour cycle, seven days a week, 365 days. There's a couple days where we shut down to fumigate for bugs, things like that. But normally we're running full production all the time. So when you do not have enough employees, that has to be covered by employees who are at work in the form of forced overtime. That's twelve hours a day. I work a 7:00 to 3:00 shift. So they come up to me at 2:59 and tell me I got to work till 7:00 P.M. Then come up to me at 6:59 and tell me I got to be back in at 3:00 A.M. to cover vacancies. And so everybody in the plant was already working a lot of overtime and then the pandemic hit. And at one point, we had close to one hundred people out either with COVID-19 or from COVID-19 protocols. And so that only increased the overtime that we were working and we did not shut the plant down. We continued providing cereal to the nation. And we did so tirelessly. We worked and worked and worked and Kellogg's continued to make record profits through the pandemic. So you know, we are not asking for wage increases. We're not asking for better benefits.

BCTGM Local 50G members on the picket line in Omaha, Nebraska. DAN OSBORN

Errol: What's at stake?

Kevin: What we're standing for is for Kellogg's to continue to be fair to employees because of the work we do and the money that we make them. And we just want to keep things the way they are, to be able to pay people what they deserve the paid. Because what they're asking for is just ludicrous. We just want to be able to protect the future worker. “Well, if you guys accept this, they won't have anything to do with you, but everybody coming behind you, now you no longer have healthcare benefits. But you still can come work here for 13 dollars an hour less than what we make.” So why would people want to be in a union that sold them out for something as crazy as this? So we're fighting for the working class, we're fighting for families, we're fighting for loved ones, we’re fighting for America. Your fight is our fight.


BCGTM social media infographic. BCGTM

Dan: They said they are prepared to move these production facilities down to Mexico. The main thing that would cost Kellogg's money is equalization of wages within our ranks. Kellogg's came out in the media and stated that our proposals would cost the company $60 million. In 2020, during the negotiations, before we started the extension, there was a Kellogg's executive who stated in negotiations that he's willing to spend $10 million a day to keep us out on the street. And to get rid of our union essentially. Well, if he's willing to spend $10 million a day, I'm not a mathematician, but that's six days out on the street.

And that that doesn't make any sense to me. That's who we're dealing with right now. And it's frustrating at a time, where it's hard to find employees, at a time where they're making profits. It doesn't make any sense and I can't wrap my head around the timing. I keep coming back to the same thing and its corporate greed. I know that's a slogan that gets thrown around a lot. But this is what it is.


Local 252G members on strike. KEVIN BRADSHAW

Errol: So should folks skip the Frosted Flakes?

Kevin: Oh, yeah. I mean, they got to go. Leave the cereal in the store. We make the lowest cost of cereal in the United States right here in Memphis, Tennessee, along with my three other sister plants in Omaha, Nebraska, Lancaster, Pennsylvania and Battle Creek, Michigan. They talked about the $120,000 that we made a year but they didn't tell anyone that comes from mandatory daily overtime, fifteen hours a day, seven days a week non-stop. So we're fighting for our families, and we're here to stay. One day longer, one day stronger, and they’re threatening to bring scabs to replace us. We know during a lockout from 2013 they spent over almost $50 million in ten months to try to save $8 million with scabs. And we had scabs working in the plant that actually got tried and convicted and are in jail right now for urinating on the cereal belts. No one wants to eat “rice pispies”. You know what I mean? We want to eat Rice Krispies.

BCTGM Local 252G Member on the picket line in Memphis, Tennessee. KEVIN BRADSHAW

Errol: How can folks support you?

Kevin: You can support us by going to the Union page and you'll get all the links that you need. I just want to say we appreciate all the support in Memphis, from the religious community, the Memphis Police Department, the Fire Department. We have people on the line right now like Dr. Earl Fisher, who's a pastor here in the city of Memphis. We have a lot of support from a lot of different organizations.

Dan: Go online and do a quick Google search and figure out what brands Kellogg's has. I mean they're a giant corporation and do your part and boycott it. Kellogg's isn't the only game in town. When you're at the store all you have to do is make a conscious decision to put that box of Apple Jacks back and grab one of the others.

The second item would be to go to our website and donate through PayPal PYPL -3.3%, 5 bucks, 10 bucks. We have people battling cancer out on these picket lines right now. We have people whose families we have autistic children that need medical attention. So that that that would definitely help ease some of our struggles that we're dealing with.


Follow me on Twitter or LinkedIn. Check out my website.

Errol Schweizer
I have worked in retail, CPG and food policy for over 25 years, including 7 years as V.P. of Grocery for Whole Foods. \

Airline SAS summons unions for talks on cost cuts, paper reports


FILE PHOTO: A SAS Airbus A320 airplane takes off from the airport in Palma de Mallorca


Mon, October 25, 2021, 2:12 AM·1 min read


COPENHAGEN (Reuters) - Scandinavian carrier SAS has summoned its workers' largest unions to negotiations as part of the airline's efforts to cut costs and increase flexibility in its pandemic-hit business, Danish daily Jyllands-Posten reported on Monday.

"The biggest problem for SAS is costs, so that's where we have to start," SAS Chief Executive Anko van der Werff told the paper. "Other airlines have cut costs and can fly more flexibly and efficiently. We need to be able to do that, too."

The negotiations could last three months, Jyllands-Posten reported.

Shares in SAS were down 8.9% in early trade on Monday.

Nordnet analyst Per Hansen said the negotiations could be tough.

"After the strike in 2019, the pilots were able to negotiate large wage increases for which SAS had no finances at all," he said in a note.

The airline, part-owned by the governments of Sweden and Denmark, has noted a gradual increase in demand from leisure travellers during the summer but business travel has yet to bounce back from the effects of the COVID-19 pandemic.

"We are not going to make money in 2022 and we will also have challenges with 2023," Van der Werff told Jyllands-Posten. "The pandemic will have an effect for at least three to four years, and that underlines the importance of us changing."

(Reporting by Nikolaj Skydsgaard; Editing by David Goodman)

U.S. consumer watchdog lays out ambitious agenda to eye Big Tech, lending competition

Katanga Johnson and Pete Schroeder
Wed, October 27, 2021, 

FILE PHOTO: The seal of the Consumer Financial Protection Bureau (CFPB) is seen at their headquarters in Washington, D.C.

WASHINGTON (Reuters) -Chief consumer finance watchdog Rohit Chopra told U.S. lawmakers on Wednesday his agency wants to minimize foreclosures on struggling American homeowners and make consumer lending more competitive.

The Consumer Financial Protection Bureau (CFPB) will also scrutinize the efforts of technology giants to gain greater control over the flow of money in the economy; these "Big Tech" companies often offer real-time consumer payments systems and consequently control huge amounts of consumer data.

And, it will sharpen its enforcement focus on companies that repeatedly violate consumer finance laws.

Chopra, a longtime consumer advocate tapped by Democratic President Joe Biden to help address inequities in lending, outlined an ambitious agenda amid the continuing economic fallout from the coronavirus in his first hearing as CFPB director before members of the House of Representatives Financial Services Committee.

"In many parts of the country and in many individual neighborhoods, conditions remain fragile," Chopra told the panel. "Many families continue to struggle to afford their mortgage and rent payments. Many small businesses are facing severe challenges to make ends meet."

Chopra's appearance will likely reinvigorate the CFPB's status as a political lightning rod. Republicans have sought to handcuff the agency since its creation, calling it overpowerful and unaccountable.

"You have inherited an agency that was undermined by the Trump administration, which actively worked to reduce consumer protection and enable predatory behavior against the most vulnerable," said U.S. Representative Maxine Waters, who chairs the House panel.

"Thankfully, their efforts to eliminate the CFPB were not successful."

Sworn in as the CFPB's full-time director earlier this month, Chopra built his name as a fierce consumer advocate at the Federal Trade Commission, and previously helped Senator Elizabeth Warren set up the CFPB after it was created in 2010.

Chopra's record as a corporate critic and experience at the agency will likely make him a potent director, say analysts.

"This hearing should serve as a reminder of both the bureau’s broad authority and Director Chopra’s capacity to effectively use the bureau’s toolbox," said Isaac Boltansky, director of policy research for financial firm BTIG.

Just a few weeks into the job, Chopra made his mark when the CFPB ordered https://www.reuters.com/technology/us-consumer-watchdog-orders-tech-giants-turn-over-information-payment-systems-2021-10-21 

Amazon.com Inc, Apple Inc and Facebook Inc to hand over information about how they gather and use consumer payment data.

He told lawmakers the agency will keep a close eye on practices that might impede competition by taking note of "the obstacles small local financial institutions face when seeking to challenge dominant incumbents, including in Big Tech."

That push for clarity is part of a growing interest among regulators and lawmakers about the rapid adoption of technology in various financial products, ranging from cryptocurrency to new "buy now, pay later" lending products.

Democrats' top policy priorities include boosting competition in the consumer finance sector by requiring financial companies to give consumers more control over their financial data -- a concept known as "open banking."

 https://www.reuters.com/business/exclusive-white-house-target-bank-mergers-financial-data-with-competition-order-2021-07-09

Chopra says he is studying open banking regulations in other countries, particularly the U.K., and is eager to review the agency's comments. Analysts said they expected the CFPB to move ahead with an open-banking rule first proposed by the agency under the former Trump administration in coming months.

"I think (the open banking rulemaking) holds promise to really make sure there's a more competitive environment; that consumers have more choices; and that there's not just a handful of incumbents who control everything," Chopra said.

"At the same time, we're going to need to make sure we're protecting privacy, security and other things that are critical."

Chopra's expansive agenda at the CFPB will also include revisiting https://www.reuters.com/business/sustainable-business/how-bidens-agencies-are-picking-apart-trumps-wall-street-friendly-measures-2021-04-12 

several major rule easings ushered through under Republican leadership, particularly around debt collection and payday lending.

Advocates are eager to see Chopra erase industry-friendly changes ushered in under Republican leadership and impose tough new rules on the marketplace.

"We hope he will explain how he plans to supercharge the CFPB's efforts to protect consumers from credit reporting mistakes, forced arbitration, overdraft fees and predatory loans," said Michael Litt, a director at Washington-based U.S. PIRG, a consumer advocacy group.

(Reporting by Katanga Johnson and Pete Schroeder in Washington; Editing by Megan Davies, Chris Reese, Jonathan Oatis and Aurora Ellis)

Column: Exxon Mobil is using a bizarre Texas rule to harass a California beach city

Michael Hiltzik
Wed, October 27, 2021

Imperial Beach Mayor Serge Dedina at the Imperial Beach Pier on Monday. 

(K.C. Alfred / San Diego Union-Tribune)

Serge Dedina is the mayor of Imperial Beach, a surfers' haven on the Mexican border that is one of the poorest municipalities in San Diego County.

Exxon Mobil is the nation's biggest oil company, with more than $214 billion in revenue over the last 12 months and nearly three times as many employees as Imperial Beach has residents.

So when Exxon Mobil pleads in court that Dedina and his city have been engaged in a nearly decade-long conspiracy to stifle its 1st Amendment free-speech rights, that's a claim that should make you go, "Hmm."

These are companies with unlimited resources, and they've decided to use them against beach communities without these resources.


Exxon Mobil has made that assertion in the course of its effort to use a bizarre Texas courthouse rule allowing a would-be litigant to demand depositions and documents from potential targets without first filing a lawsuit.

The oil company has asked the Texas courts to order compliance from Dedina and 14 other California municipal officials.

What put them on Exxon Mobil's enemies list is that they represent California cities and counties that have sued Exxon Mobil and other oil companies over the consequences of global warming, which stems from the burning of the companies' products.

The oil company's demands for depositions and documents are part of a long campaign by the fossil fuel industry to harass and intimidate its critics rather than meeting their criticisms head-on.

"This is an industry with a 30-year history of bullying and harassment and intimidation of its opponents," says Naomi Oreskes, co-author of the 2010 book "Merchants of Doubt," which documented how a network of ad agencies, public relations firms, conservative groups and corporate-beholden scientists had undermined public perception about the dangers of tobacco and global warming.

The critics' fundamental point is that oil and gas companies systematically concealed what their own scientists knew about the effect of their products on global warming. Meanwhile, they were publishing misleading op-eds and advertisements questioning the connection.

Exxon Mobil certainly has succeeded in imposing costs on the cities and counties with the impudence to challenge the company in court.

"What has people concerned is what's next, what's the next strategy," Dedina told me. "These are companies with unlimited resources, and they've decided to use them against beach communities without these resources."

Imperial Beach is a city of 27,000 residents that has increasingly seen damage from sea level rise in recent years.

"We're trying to build a swimming pool, and a senior center, and a parks and recreation department, but we've been wrecked financially because we've been devastated by coastal flooding," says Dedina, who is also executive director of Wildcoast, a nonprofit that works to protect coastal and marine ecosystems from the effects of global warming. "We're paying the cost of coastal flooding that the fossil fuel companies caused and lied about."

The California plaintiffs — in addition to Imperial Beach, the counties of San Mateo, Marin and Santa Cruz, and the cities of Richmond, Oakland and San Francisco — are seeking to force oil and gas companies to compensate them for the costs of sea level rise, among other consequences of global warming.

The cases are pending, but their procedural course is uncertain. In May, the U.S. Supreme Court ordered the 9th Circuit Court of Appeals to reconsider a ruling that returned them to state court after the oil and gas companies got them transferred to federal court.

Exxon Mobil's response could charitably be described as outlandish. The company asserts that the California lawsuits, along with cases brought by New York and Massachusetts attorneys general, are the product of a conspiracy hatched at a "conference of special interests" in La Jolla in June 2012.

"The participants advocated for government investigations and litigation against energy companies to 'pressure' the targets to provide 'support for legislative and regulatory responses to global warming,'" the company says.

Their goal, the company asserts, was to "coerce Exxon Mobil and others operating in the Texas energy sector to adopt policies aligned with those favored by local politicians in California." Today, the company pleads, "Exxon finds itself directly in that conspiracy's crosshairs."

A look at the official report of the La Jolla meeting — which was actually billed as a "workshop on climate accountability, public opinion, and legal strategies" — should demonstrate the absurdity of those claims. The workshop organizers included Oreskes, then a professor of the history of science at UC San Diego, and Peter C. Frumhoff, chief climate scientist at the Union of Concerned Scientists. Oreskes is now on the faculty at Harvard.

None of the public officials now being targeted by Exxon Mobil was among the 22 attendees. They were mostly scientists, environmentalists and university professors; four were practicing lawyers. The participants were listed in the report, along with a group photograph.

"If it were a plot, plotters and conspirators don't tend to publish their findings," Frumhoff told me. The goal, he says, was to build on what was learned from legal challenges to the tobacco industry and see if that could be applied to fossil fuel companies.

"Exxon's fixation on this," Frumhoff says, "is a flimsy and shameless effort to divert attention from its own corporate misconduct, and to apply pressure to local officials who are considering filing lawsuits to try to seek funding to pay for the damages from climate change that would not have happened but for the actions of fossil fuel companies like Exxon."

That brings us to Exxon Mobil's attempt to exploit the Texas court system's unique Rule 202, which allows prospective litigants to seek pre-lawsuit depositions and documents from potential targets and witnesses. Texas isn't the only state allowing pre-suit depositions, but its rule is the broadest.

Some states and the federal courts provide for pre-suit depositions when it appears that testimony might not be available after a lawsuit is filed — a potential witness is terminally ill and might die before trial, say. Texas allows them to determine whether it will be worthwhile to bring a lawsuit at all — "the look before the leap," as veteran Texas trial lawyer Paul Gold called it in a 2018 paper.

To pursue its deposition demand, Exxon Mobil has wrapped itself in the Texas flag, even soliciting a friend-of-the-court filing from Texas Gov. Greg Abbott, who told the state Supreme Court that the California plaintiffs are trying to "dictate the behavior and speech of the energy industry in Texas."

Abbott added: "No Texan voted for any of these meddling California officials," who should "mind their own business in California if they want to stay out of court in Texas."

The company has to portray the defendants' lawsuits as attacks on the state of Texas rather than itself, thanks to the intricacies of courthouse procedure.

Without getting into the details, suffice to say that for Texas courts to impose their will on out-of-state targets, there must be a showing that the targets committed some offense in Texas. Think of a Californian who causes a car accident in Dallas, then flies home — that motorist could be served in California and hauled into a Texas court.

Exxon Mobil alleges that the California officials were guilty of a Texas offense by trying to suppress "Texas-based speech about climate and energy policies." That's how the company put it in a brief filed with the Texas Supreme Court on Sept. 10.

"The attempt to make these cases into an attack on Texas is classic misdirection," Oreskes says.

It's rather a stretch to describe the lawsuits as directed specifically at Texas or Texas companies, as it happens. Most of the 32 defendants named in the suit brought by Imperial Beach and its co-plaintiffs aren't Texas-based; they include companies headquartered in Oklahoma, Missouri, New York, Spain, Canada, France and Venezuela.

One of the fattest targets, Chevron, is headquartered in California. (Exxon Mobil itself isn't even really a Texas company — although it maintains a headquarters in the Dallas metroplex, it's actually incorporated in New Jersey.)

In any event, Exxon Mobil's legal attack "ignores the actual allegations in the California lawsuits, which focus on each company’s allegedly misleading and deceptive efforts to increase the sales and use of their products through a deliberate campaign of disinformation," San Francisco said in its brief to the Texas Supreme Court.

Exxon Mobil originally asked a Texas trial judge in Fort Worth to grant permission for depositions from the California officials in 2018.

The judge obligingly bestowed a legal wet kiss on his hometown oil company, finding that the California officials intended to "expressly target the speech, research, and funding decisions" of Exxon Mobil and other Texas-based companies "to chill and affect speech, activities, and property in Texas."

A Texas appeals court ruled last year that the judge was way off base. Even though Exxon Mobil is headquartered in Texas, lawsuits filed in other states targeting the company aren't tantamount to offenses committed in Texas, the appeals judges found.

"These out-of-state actions were directed at Exxon, not Texas," they wrote, therefore the Texas courts had no right to force the California officials to give depositions to Exxon Mobil before it filed a lawsuit. They also confessed to "an impulse to safeguard an industry that is vital to Texas' economic well-being." They described the California lawsuits as "lawfare," which is the exact same term that Exxon Mobil used to describe them. But they regretfully turned the company down.

What's most telling about Exxon Mobil's response to the California lawsuits is how sharply it departs from its own shareholders' view of the threat of global warming. At the company's annual meeting in May, shareholders elected to its board three insurgent members who had expressed explicit concerns about the company's environmentally unfriendly business model. "This is not a company embracing the idea of change from the inside out," Oreskes says.

Dedina says he and his fellow California plaintiffs are unmoved by Exxon Mobil's bullying.

"We're not going to back down, we're not intimidated, we're not going away. What are they going to do to us?" he asked, referring to the fossil fuel industry. "Flood our cities more? Cause more wildfires? It's already happening. What these companies are really afraid of is that there are going to be more and more cities and counties and states filing lawsuits."

This story originally appeared in Los Angeles Times.

How the Energy Crisis Helps a Rich Nation to Become Even Richer

Vanessa Dezem and Lars Erik Taraldsen
Tue, October 26, 2021





(Bloomberg) -- Europe’s energy crisis and a spike in natural gas prices are proving to be a boon for Norway, delivering a flood of revenue for the country that’s already one of the world’s richest.

Norway, with huge oil and gas fields, saw exports hit an all-time high for a third straight month in September, with natural gas sales jumping seven-fold from a year earlier. The bounty is the result of both a bounce in energy demand after pandemic restrictions were eased, coupled with a surge in prices.

The country, which accounts for 25% of European Union natural gas imports, is reaping the financial benefits of a crisis that’s squeezed households and businesses across much of the region, forcing governments to promise aid to help with bills.

State-owned Equinor ASA, which publishes third-quarter results Wednesday, is set to be a winner of the energy crisis. Of the energy giant’s total production, about 35% is gas sold in Europe. Net income was probably $2.3 billion, more than six times the year-earlier figure.

The flood of cash -- higher than had been anticipated -- is setting Norway apart from other countries worried about bloated debt levels in the wake of stimulus spending during Covid lockdowns. It means the state can cut the amount it needs to tap from its sovereign wealth fund, the world’s biggest at $1.4 trillion.

Norway’s new government, formed after elections in mid-September, plans to continue to develop the country’s lucrative oil and gas fields. According to the previous administration, fuel revenue is expected to surge 72% to 184 billion kroner ($18.8 billion) this year, 30 billion kroner higher than estimated at the start of the year. It’s seen hitting 277 billion kroner in 2022.

“There are very high gas prices right now and gas is an important part of our exports,” Norway’s minister for petroleum and energy, Marte Mjos Persen, said in a telephone interview. “We know how important our oil and gas revenues and oil wealth are for welfare development.”

Europe’s supply squeeze may not ease for some time. Gas-storage sites in the EU are at their lowest seasonal level in at least a decade, and the World Bank’s latest Commodity Markets Outlook forecasts that energy prices will remain elevated into 2022.

Norway has benefited more directly from the recent gas price moves than competitors because of its contracts. Producers are more exposed to European hub pricing than Russia or Algeria, whose supplies are still largely linked to oil prices.

“Norway’s market based contract pricing is paying off these days,” said Sindre Knutsson, a gas market analyst at consulting firm Rystad Energy.

Despite the gas squeeze on Europe, Norway is avoiding political damage, unlike Russia, which has faced criticism over the crisis.

So far, Russia hasn’t sent any significant additional volumes to the region’s spot market, citing the need to prioritize filling domestic storage ahead of winter.

Gas deliveries from Norway to the EU have risen by close to 5% in the first nine months of the year, according to Gergely Molnar, an energy analyst at the International Energy Agency.

“Norway is playing a key role in ensuring seasonal supply flexibility,” he said.

Domestically, the country is insulated from the gas-price surge, as more than 90% of its power needs are met by domestic hydroelectricity.

It has the “unusual double-edged benefit of being a major gas producer, so benefiting from high prices, yet a very small gas consumer,” said Andrew Hill, head of European gas analysis at BloombergNEF.

However, it’s having its own crisis thanks to a water shortage that’s hit the hydro industry and sent power prices higher.

The government is looking for solutions “for those who struggle the most,” said Persen. That could mean some of the extra revenue flowing in from exports gets directed toward aid for households.

“Those who worry should not be alone with those worries,” she said. “But this is also an important reminder that our power generation system is very weather dependent and it is strongly affected by the conditions in our neighboring countries.”

Exclusive-Gas crisis helps to land BP $500 million windfall


Dmitry Zhdannikov
Tue, October 26, 2021



LONDON (Reuters) - BP's trading team made at least $500 million in the third quarter of 2021, two sources with knowledge of the company's trading results said, as the energy major benefitted from a gas crisis that has left consumers and industries smarting.

Natural gas and power prices soared to an all-time high in Europe and parts of Asia in August as the global economy recovered from the pandemic and energy consumption increased faster than supplies.

Low gas stocks after a cold winter and hot summer as well as poor renewables output contributed to the rally.

The increase in power bills sparked protests in Spain and put European governments under pressure to find ways to protect consumers and industry and calm the markets. European Union https://www.reuters.com/article/eu-energy-idAFL1N2RM0FT countries failed to agree on a bloc-wide response on Tuesday.

In China, the government has taken measures to increase coal output and reform power markets to ensure homes are heated this winter.

BP's gas trading results were disclosed at an internal call with staff earlier this month, the sources said, asking not to be named because they are not authorised to speak to the media. BP declined to comment for this story.

The gains were made as customers in Europe and Asia rushed to buy Liquefied Natural Gas (LNG) from the United States and other parts of the world to cope with shortages - in a reversal of the situation two years ago when LNG producers faced a global glut.

RIVALS COULD MAKE EVEN MORE

BP's strong gas trading results are likely to provide an early indication of how some of the other international energy companies will benefit from the global gas crunch.

BP has a smaller LNG and gas trading book than its rivals, including Shell and Equinor, which could post even higher profits.

Shell, Equinor and BP will report results this and next week.

Energy companies typically do not disclose details on profits and loss from trading in their quarterly earnings. They usually only state whether trading positively or negatively contributed to overall financial results.

BP and Shell are banking on cash flow from trading to support them through their transition to a business model less reliant on fossil fuels.

They need trading to generate profit as they focus more on renewable and power markets that tend to have lower margins than oil and gas.

BP’s trading arm https://www.reuters.com/article/us-bp-trading-exclusive-idUSKBN2B30GK made nearly $4 billion in 2020 in profits, almost equalling the record trading profit in 2019.

The company has pledged to cut oil and gas output, while Shell says its oil production has peaked. Both say they are expanding trading and they still make billions of dollars a year moving oil and gas around the world.

Although BP plans to expand power and renewables trading, many of those markets are highly regulated and unlikely to deliver the same profit margins as oil and gas.

Last year, the bulk of BP's profit was made in oil as the price first slumped as a result of the impact of global lockdowns on fuel demand, and then recovered in a rally that has continued through 2021 to take oil prices to near their highest since 2014.

One of the biggest trading plays in 2020 was to store oil during the downturn, buying it at low prices and selling it later when prices recovered.

This year, natural gas has been an equally strong performer as a result of the market dislocations that led to the Chinese power shortage and tight European gas supplies.

BP has already earned close to $500 million in trading the first quarter of 2021 after a deep freeze in Texas sent gas prices surging, sources said.

GM to resume limited production at EV plant in Michigan

FILE PHOTO: An automated guided vehicle carrying a battery pack moves under a partially assembled 2018 Chevrolet Bolt EV vehicle on the assembly line at General Motors Orion Assembly in Lake Orion,

David Shepardson
Tue, October 26, 2021

WASHINGTON (Reuters) -General Motors Co said on Tuesday it will resume limited production for two weeks at its Orion Assembly plant in Michigan, which has been shuttered since August and builds the electric vehicle Chevrolet Bolt.

The largest U.S. automaker in August widened its recall of the Bolt to more than 140,000 vehicles to replace battery modules and to address fire risks. The plant that assembles the Bolt was idled through the end of October.

GM said limited production will start Nov. 1 to help optimize battery production and supply chain repair logistics, including providing vehicles to be used as courtesy transportation for customers during recall repairs.

GM President Mark Reuss at a roundtable in Washington Tuesday that the company is addressing the recall before it will resume production of new vehicles for consumers.

GM has suspended sales of new Bolt vehicles. Reuss said GM has to certify Bolt vehicles on dealer lots before they can be sold but he did not say when those sales might begin.

GM disclosed this month its partner South Korea's LG Electronics agreed to reimburse it for the $2 billion estimated costs and expenses associated with the Bolt recall.

Reuss said Tuesday LG "are great partners ... they stepped up in terms of commitment and problem solving."

GM and LG said in April they would build a $2.3 billion battery factory in Spring Hill, Tennessee similar to the companies' Ultium Cells joint-venture plant in Lordstown, Ohio. The Lordstown plant is finished but production has not started, Reuss said.

GM disclosed in June it will build two additional battery cell manufacturing plants. Reuss said he expects to disclose where the plants will be located within the next six months.

"There's time but there's not a ton of time," Reuss said, noting that GM plans to have 30 electric vehicles by 2025.

EU’s Biggest Pension Fund to Dump $17 Billion in Fossil Fuels

Alastair Marsh
Tue, October 26, 2021,


(Bloomberg) -- Europe’s biggest pension fund, ABP of the Netherlands, has joined a growing number of investment managers blacklisting fossil fuels as the finance industry gives in to pressure from activists and customers alarmed at the prospect of a climate catastrophe caused by carbon emissions. 

ABP said Tuesday it will divest 15 billion euros ($17.4 billion) worth of fossil-fuel assets by early 2023. The fund said it doesn’t expect the decision to hurt long-term returns and added that the move will allow it to unveil a more ambitious CO2 reduction goal next year. The announcement underpins the speed with which the investment industry is turning its back on oil, gas and coal, with 1,500 asset managers overseeing a combined $39.2 trillion now committed to offloading such holdings, 

DivestInvest said in a separate release.The development marks a huge shift over the past seven years. Back in 2014, when DivestInvest first tallied such commitments, funds turning their backs on fossil fuels represented just $52 billion. So far in 2021, the $16 billion Ford Foundation, started by the son of Henry Ford and now ranked among the world’s largest private foundations, said it will cease to invest in fossil fuels. Harvard University’s $42 billion endowment made a similar pledge and Maine became the first U.S. state to order its public pension fund to sell off fossil-fuel holdings.

New York City’s pension funds have announced plans to divest about $4 billion worth of fossil fuel-related investments and Canada’s second-largest pension manager, Caisse de Depot et Placement du Quebec, has said it will sell billions of dollars worth of oil assets, including large equity stakes in Canada’s top crude producers, as part of a new strategy that aims to dramatically cut the emissions from its investments. Fidelity International unveiled plans Tuesday to halve the carbon footprint of its investment portfolio by 2030.

“The fossil-fuel divestment movement is growing at an accelerated clip, because the world has realized where the money flows determines our success in slowing climate change,” said Richard Brooks, climate finance director at environmental nonprofit Stand.earth. “More money simply needs to get out of financially risky coal, oil and gas companies, and switched over to companies driving climate solutions, including renewables.”

Dumping fossil fuels is a quick win for funds wishing to decarbonize portfolios, yet whether it also produces a positive outcome for the climate is fiercely debated. Simply selling fossil-fuel stocks doesn’t change the demand or use of fossil fuels, and in fact can lead to carbon-intensive companies being held predominantly in portfolios of investors that are less motivated to push for lower emissions.

Still, authors of the DivestInvest report said the movement can now “offer solid proof that divestment is a sound financial strategy” and that “fossil fuels are a bad bet financially.” Early adopters of divestment strategies are reporting positive financial results and more institutions “cite the financial reality that climate change will make fossil fuels obsolete and a renewable energy future inevitable,” according to the report.That chimes with the findings of a BlackRock Inc. report commissioned by New York City that said “no investors found significant negative performance from divestment, but rather have reported neutral to positive results.”

Climate commitments from S&P 500 companies remain unclear despite emissions goals: Morgan Stanley

Grace O'Donnell
·Assistant Editor
Wed, October 27, 2021, 

Sustainability reports and emissions targets are becoming commonplace in corporate America, but more companies may be pushed to revise their targets given the ambition gap between what is being pledged and what is required to meet Paris Agreement goals.

Two-thirds of companies in the S&P 500 have set targets to reduce greenhouse gas emissions, according to a recent note from Morgan Stanley, and mentions of "net zero" and other sustainability themes have been on the rise at corporate events. However, only 29% of S&P 500 companies have implemented or plan on implementing science-based targets, which create a clearer pathway to decarbonization.

“In general, most companies did not provide detailed "roadmaps" to net zero goals — which we view as one of the areas most lacking in corporate target setting,” the analysts wrote. “In many instances, targets appear in part reliant on the scalability of still nascent technologies — and while expected, this presents a need for a more fulsome discussion of the substance underpinning emissions targets.”

Companies in the S&P 500 with emissions targets compared with those with science-based targets. (Source: Morgan Stanley Research)

According to the note, carbon-intensive industries, such as utilities, materials, and energy had the highest percentage of emissions targets. But these industries had a lower prevalence of science-based targets.

The analysts said they expect growing pressure to adopt science-based targets from policymakers, proxy advisers, and investors.

In a recent webinar on sustainability, Rich Kushel, head of the portfolio management group at BlackRock, noted the “tectonic shift” in the allocation of capital towards sustainability-oriented assets and away from unsustainable assets.

“The second part which I think is arguably a little more interesting, frankly, is that the opportunities and risks for sustainability and for the climate transition are being increasingly recognized and reflected in asset prices,” he said. For investment teams, he added, it will be a matter of identifying "sustainable business models and sustainable business practices that are going to benefit from what is a once-in-a-lifetime transition that we're going on now towards that net-zero economy.”

Science-based targets are most prevalent in the consumer staples and real estate sectors. (Source: Morgan Stanley Research)

The role of science-based targets in corporate climate efforts

While the imperative to reduce greenhouse gas emissions is clear, there is still a great deal of uncertainty around paths to net-zero carbon emissions.

Many technologies that have been deemed critical to climate action — such as hydrogen fuel, long-duration batteries, and carbon capture and storage — have yet to be proven out at scale. At the same time, since company disclosures around emissions are voluntary, they tend to vary in their scope and consistency, which can make assessing climate efforts complicated and can create room for greenwashing.

Science-based targets aim to reduce some of that uncertainty by using the latest scientific models, as outlined by the IPCC, the UN's climate body, to inform short- and long-term goals. Third parties, such as the Science Based Targets initiative (SBTi), certify science-based targets have met a set of criteria and are aligned with the Paris Agreement's stated goal to keep warming well below 2°C and ideally under 1.5°C, compared to pre-industrial temperatures.

Vehicles move along the The New Jersey Turnpike Way while a Factory emits smoke on November 17, 2017 in Carteret, New Jersey. 

(Photo by Kena Betancur/VIEWpress/Corbis via Getty Images)

When reviewing company emissions profiles, SBTi first checks that the company has established an appropriate baseline year, against which it will measure its carbon emission reductions.


Then, SBTi recommends that companies set long-term targets with milestones every five years. These targets must include Scope 1 and Scope 2 emissions, which are under the direct control of the company. And if 40% of a company's emissions are considered Scope 3 — or indirect emissions, such as those generated within a supply chain or by investments — those emissions must also be covered.

One notable aspect of science-based targets is that they do not count offsets in emissions reductions, and this is one of the key ways they differ from other climate commitments. While offsetting emissions by planting trees and other means can help compensate for pollution that has already been released into the atmosphere, the benefits of offsets are limited as they do not reduce the absolute amount of emissions that are released. Furthermore, an overreliance on offsets can muddy the waters by presenting the illusion of lowering carbon emissions while allowing pollution to continue.

Stakeholder scrutiny could dial up the pressure for SBTs

Finalizing the timeframe of Paris Agreement goals and strengthening nationally determined commitments to reduce greenhouse gas emissions will be a major objective at COP 26, the major UN climate summit that is set to begin on Oct. 31. A number of corporate sponsors will also be in attendance at this conference.

On the policy side, all eyes are on the Securities and Exchanges Commission (SEC) as Chairman Gary Gensler seemed to indicate a willingness to increase climate disclosure requirements in his remarks to Congress earlier this month. The Financial Stability Oversight Council, led by Janet Yellen, also released a report on Thursday that laid out the first steps in addressing risks to financial stability from climate change.

Speaker of the House Nancy Pelosi, D-Calif., and other Democratic lawmakers join activists in support of solutions to climate change as part of President Joe Biden's domestic agenda, at the Capitol in Washington, Wednesday, Oct. 20, 2021.

 (AP Photo/J. Scott Applewhite)

And recently, the movement to get large institutions to divest from fossil fuels has been gaining momentum. For example, New York City's pensions have committed to doubling their investment into renewable energy assets and to divesting nearly $4 billion from fossil fuel investments.

And science-based decarbonization plans have become more important to investors as well, especially those adopting environmental, social, and governance-oriented (ESG) portfolios. The Morgan Stanley note highlighted the relevance of this theme as “decarbonization pathways under SBTs could present risks and opportunities” for investors.

“I would say Europe is moving faster than the rest of the world, … but the world is moving, the financing opportunities are moving in a sustainability way,” Rick Rieder, chief investment officer of global fixed income at BlackRock, said. “So almost de facto your portfolios are going to move in a more sustainable evolution.”

Grace is an assistant editor for Yahoo Finance.

Exxon CEO Floats Pay Hikes to Combat ‘Major’ Employee Attrition

Mon, October 25, 2021, 10:28 AM·3 min read

(Bloomberg) -- Exxon Mobil Corp. is weighing salary increases as it tries to halt employee attrition across its business divisions after sweeping job and benefit cuts.

Chief Executive Officer Darren Woods told employees at a town hall-style meeting that they should be “encouraged” by the ongoing salary-review process, according to a recording of the event. “The policies we’re putting in place will get back to where people can begin to see a different path going forward than the path we came out of in 2020,” he said at the Oct. 20 gathering in suburban Houston.

Woods didn’t give any indication as to the size of any pay increase or which employees would be eligible. The program will impact salaries, promotions and retirement benefits, spokesman Casey Norton said in an email on Monday. Exxon disclosed plans last year to cut 14,000 workers, or 15% of staff, by the end of 2022. As of Dec. 31, the company employed 72,000 worldwide.

"We anticipate 2022 will follow our typical annual salary and promotion process, with industry benchmarking informing decisions about our 2022 salary program in advance of a January 1 effective date," Norton wrote. “We are recruiting, hiring and backfilling roles.”

Until last year, Exxon was one of America’s most secure and highest-paying employers, offering high base pay, generous benefits, opportunities for global travel and strong job security. But amid 2020’s pandemic-driven demand slump and the worst oil-market crash in history, the company imposed its first major job cuts in decades, curbed travel, suspended matching contributions to employee retirement plans, and altered its long-standing performance-ranking system.

Amazon.com Inc., Microsoft Corp. and other Big Tech companies are hiring former Exxon staffers, with financial services, consulting and pharmaceutical firms picking up others.

At the town hall, one employee expressed concerns to Woods during the question-and-answer session.

“Everyone in the room today and calling in knows that we’re having some major attrition issues,” the employee said. “While this can be kind of glazed over with the decision to have layoffs last year and the economy as a whole, really every business line is having attrition issues.”

She then asked Woods what the company could have done to mitigate the situation. A moderator said it was a “very popular” question.

In response, Woods acknowledged the company has “more attrition today” and that it’s “not something that we obviously want,” according to the recording. However, Exxon is not unique in losing workers after the pandemic and is actually doing better than its industry peers, he said.

“I’m not suggesting that your concerns around what are people thinking and what’s driving them to leave the company isn’t important,” Woods said. “I would just make sure we put it in the proper context that it’s something that we’re seeing coming out of the pandemic, and something that we’re seeing across all the companies.”

In prepared remarks posted on Exxon’s website, Woods was upbeat about the oil explorer’s prospects because of rising prices for crude, natural gas and petrochemicals, rebounding economic growth and the opportunity presented by the energy transition. Investors appear to agree, with the stock up more than 50% this year. Exxon is scheduled to report third-quarter earnings on Oct. 29 and analysts expect net income to be the highest in seven years, according to estimates compiled by Bloomberg.

Whether or not employees will see much of the windfall remains to be seen, but the signs are positive, according to Woods. Exxon restored matching contributions to employee 401k plans earlier this month.

“We’re going through the salary process today,” Woods told employees. “As we get into Jan. 1, when raises come out, that’s going to be, I think, people will be encouraged by that, given what we had to do in 2020.”