Verde to expand potash output in Brazil to counter supply disruption
Roberto Samora
Thu, March 3, 2022
By Roberto Samora
SAO PAULO, March 3 (Reuters) - Verde Agritech PLC has decided to expand its potash production in Brazil as the global fertilizer supply chain faces a major bottleneck owing to the Russia-Ukraine conflict and Western sanctions on Belarus, an important producer.
The company said its board has approved accelerated investment so it can boost output capacity and become Brazil's largest potash producer.
Verde expects to double capacity of its second production facility in the state of Minas Gerais, currently under construction, and reach 3 million tonnes of output capacity in 2022. Plant 2 - as the venture is called - is on track to start production in the third quarter of 2022 with initial capacity of 1.2 million tonnes a year, Verde said, while the expanded production capacity is expected to be set by early fourth quarter.
"Given the latest sanctions applied to Belarus and Russia, we are acutely aware of the collateral impact on Brazil's agriculture in the case of a potash supply disruption," Verde President and Chief Executive Cristiano Veloso said. "We are equally worried about a global food shortage, which might be unavoidable if there is a breakdown in fertilizer supply."
Brazil imports about 85% of its fertilizer consumption, including potash.
Brazil Agriculture Minister Tereza Cristina Dias on Wednesday said the country has fertilizer stocks that should last until October and would soon launch a national plan to stimulate investments in potash and phosphorus mines.
Verde said its board approved an expenditure of 51 million reais ($10.04 million) to fund the expansion plan, up from the 22 million reais previously approved for the construction of Plant 2.
The company also expects to start building its Plant 3 unit in 2023, but such a move still requires permits. ($1 = 5.0794 reais) (Reporting by Roberto Samora; Writing by Gabriel Araujo; Editing by David Goodman and Mark Porter)
Thursday, March 03, 2022
Canada Rail-Strike Threat Latest Upset to Fertilizer Supply
Jen Skerritt
Wed, March 2, 2022,
(Bloomberg) -- A labor dispute at one of Canada’s largest railways is threatening to further disrupt global supplies of fertilizer just as farmers need key nutrients to plant spring crops.
About 3,000 workers at Canadian Pacific Railway Ltd. have voted for a plan to strike March 16, if necessary, according to their union. Canada, along with Russia and Belarus, is one of the main sources for the world’s potash, a commonly used fertilizer that contains potassium. A potential work stoppage comes amid concerns of shortfalls in supplies amid Russia’s invasion of Ukraine and sanctions on Belarus.
“The disruption at CP in the middle of spring has a potential devastating impact on the ability to supply the American farmer,” said Jeff Blair, chief executive officer of GreenPoint Ag, an agriculture supply company in the southern U.S.
CP has offered wage increases for a two-year collective pact and has agreed to 20 union demands, spokeswoman Salem Woodrow said in an email. The union leadership “appears poised to force a shutdown of the essential rail supply chain” in mid-March by making unreasonable demands, she said.
“A work stoppage of any duration at CP will impact virtually all commodities within the Canadian supply chain, thereby crippling the performance of Canada’s trade-dependent economy,” Woodrow said.
Shipping woes have also been driving lumber prices higher and the threat of a CP strike will just “exacerbate an already tough situation,” said Kevin Mason, managing director of ERA Forest Products Research. Lumber futures in Chicago rose by the exchange limit Wednesday to $1,268.70 for 1,000 board feet, a two-week high.
Jen Skerritt
Wed, March 2, 2022,
(Bloomberg) -- A labor dispute at one of Canada’s largest railways is threatening to further disrupt global supplies of fertilizer just as farmers need key nutrients to plant spring crops.
About 3,000 workers at Canadian Pacific Railway Ltd. have voted for a plan to strike March 16, if necessary, according to their union. Canada, along with Russia and Belarus, is one of the main sources for the world’s potash, a commonly used fertilizer that contains potassium. A potential work stoppage comes amid concerns of shortfalls in supplies amid Russia’s invasion of Ukraine and sanctions on Belarus.
“The disruption at CP in the middle of spring has a potential devastating impact on the ability to supply the American farmer,” said Jeff Blair, chief executive officer of GreenPoint Ag, an agriculture supply company in the southern U.S.
CP has offered wage increases for a two-year collective pact and has agreed to 20 union demands, spokeswoman Salem Woodrow said in an email. The union leadership “appears poised to force a shutdown of the essential rail supply chain” in mid-March by making unreasonable demands, she said.
“A work stoppage of any duration at CP will impact virtually all commodities within the Canadian supply chain, thereby crippling the performance of Canada’s trade-dependent economy,” Woodrow said.
Shipping woes have also been driving lumber prices higher and the threat of a CP strike will just “exacerbate an already tough situation,” said Kevin Mason, managing director of ERA Forest Products Research. Lumber futures in Chicago rose by the exchange limit Wednesday to $1,268.70 for 1,000 board feet, a two-week high.
War Abroad and Politics at Home Push U.S. Climate Action Aside
Somini Sengupta and Lisa Friedman
Thu, March 3, 2022
Supporters of Ukraine outside the White House on the day of President Joe Biden's State of the Union address in Washington, March 1, 2022. (Valerie Plesch/The New York Times)
War and politics are complicating the efforts of the two biggest polluters in history — the United States and Europe — to slow down global warming, just as scientists warn of intensifying hazards.
In his State of the Union speech Tuesday evening, President Joe Biden barely mentioned his climate goals, despite promises to make climate an issue that drives his presidency. European politicians have their own problem: They are struggling to get out from under one of the Kremlin’s most powerful economic weapons — its fossil fuel exports, which Europe relies on for heat and electricity.
Oil and gas prices are soaring globally. That is a boon to those who extract and sell the very products that drive fatal heat waves, wildfires and sea level rise. And it is leading to new demands for increased drilling in the United States, already one of the world’s biggest producers of oil and gas.
The developments come just days after an exhaustive report from the United Nations that implored world leaders to sharply reduce emissions of carbon dioxide, methane and other greenhouse gases that are dangerously heating the planet. To fail, they said, is to face a harrowing future where the rate of global warming outpaces humanity’s ability to adapt.
In Washington, Biden’s ambitious climate legislation has been blocked by unanimous Republican opposition as well as a senator from his own party, Joe Manchin, who represents the coal-producing state of West Virginia and has strong backing from the fossil fuel industry. The Supreme Court could further limit Biden’s ambitions in a case that began this week that could restrict the federal government’s ability to regulate greenhouse gas emissions.
In his State of the Union address — traditionally considered a president’s best opportunity to rally the nation around an agenda — Biden cited climate in the context of his proposals to create jobs by repairing roads, airports and other crucial infrastructure. “We’ll do it all to withstand the devastating effects of the climate crisis,” he said.
But high gas prices pose a risk to Democrats before midterm elections, and his remarks were intended to blunt that, too. He said he would release oil reserves — 30 million barrels worth — to keep prices down for Americans. “We are going to be OK,” he said.
Energy experts said Biden missed an opportunity to connect the war in Ukraine to the need to more swiftly sever an economic reliance on fossil fuels. “The president did not articulate the long-term opportunity for the U.S. to lead the world in breaking free of the geopolitical nightmare that is oil dependency,” said Paul Bledsoe, a strategic adviser to the Progressive Policy Institute, a Washington-based think tank.
Vedant Patel, a spokesperson for the White House, said Biden has shown “unwavering support” for climate solutions.
The Russian invasion in Ukraine has brought world leaders to a new, difficult crossroad. The European Union is feeling its effects most acutely.
Russia supplies nearly 40% of the gas that Europeans use for heat and electricity. In exposing the enormous leverage that Russia has enjoyed with its energy exports, the Ukraine conflict is forcing European leaders to make some urgent choices: Should it build new fossil fuel infrastructure so that it can replace Russian fuel with liquefied natural gas from elsewhere, chiefly the United States? Or should it shift away from fossil fuels faster?
Next week the world will get an early glimpse of Europe’s leanings, because officials in Brussels are due to announce a new energy strategy aimed at weaning the continent off Russian gas.
A draft of the report, reviewed by The New York Times, suggests that the new strategy will propose speeding up energy efficiency measures and renewable energy installations. It views imports of liquefied natural gas, or LNG, from the United States and elsewhere as a short-term measure to offset Russian piped gas.
“This war will have deep repercussions one way or another on our own energy system,” Kadri Simson, the European Union energy commissioner, told reporters this week after an emergency meeting with energy ministers from the 27-member bloc.
Analysts have said European countries can quickly reduce gas dependence with energy efficiency measures and ramping up renewable energy investments, which are already in line with Europe’s ambition to stop pumping additional greenhouse gases into the atmosphere by midcentury. The conflict in Ukraine could fast-track some of that. It could also lead to what Lisa Fischer, who follows energy policy at E3G, a research group, called “a tectonic shift” — using renewables, rather than ample gas storage, to achieve energy security.
In an interview this week, John Kerry, Biden’s special envoy for climate change, emphasized that, saying Putin has “weaponized” fossil fuels, particularly gas.
“It’s related, and people need to see it that way. Energy is a huge part of the geopolitics of what the options are,” Kerry said. “Energy is a key weapon within this fight, and if there were far less dependency on gas there would be a different set of plays.”
The United States, for its part, has ramped up exports of LNG to Europe to counter the decline in Russian piped gas. By the end of this year, the United States is poised to have the world’s largest LNG export capacity.
Current sanctions that nations have imposed on Russia do not directly target its oil and gas sector, but the Ukraine invasion is expected to disrupt supply routes and has stoked fears that Russia could curtail shipments.
In the United States, Republicans have said the Russian invasion of Ukraine underscores the need to aggressively drill for more oil and gas in the United States to provide Europe with an alternative. Sen. Kevin Cramer, R-N. D., on Tuesday called Biden’s opening of the strategic reserve “a thimble in the ocean.”
White House officials said Biden wove climate change and clean energy throughout his speech. He noted that Ford and GM are investing billions of dollars to build electric vehicles, creating millions of manufacturing jobs in the United States. He also noted that funding from the infrastructure package will build a national network of 500,000 electric vehicle charging stations.
But climate change policy is at a critical juncture in the Biden administration. The president’s centerpiece legislative agenda, which he had called the Build Back Better act, is dead. Democrats still hope to pass approximately $500 billion of clean energy tax incentives that had been part of the package, but opportunities to do so are waning. If that investment does not come through and the Supreme Court also restricts the administration’s ability to regulate emission, Biden’s goal of cutting U.S. emissions roughly in half compared with 2005 levels could be essentially unattainable.
Even if climate wasn’t the stated focus of Biden’s address Tuesday, administration officials said Russia’s war against Ukraine has not pushed climate change off the agenda. They noted that Biden has made climate change an emphasis in virtually every federal agency, and has moved ahead with major clean energy deployments including a record-breaking offshore wind auction last week that brought in more than $4 billion.
© 2022 The New York Times Company
Somini Sengupta and Lisa Friedman
Thu, March 3, 2022
Supporters of Ukraine outside the White House on the day of President Joe Biden's State of the Union address in Washington, March 1, 2022. (Valerie Plesch/The New York Times)
War and politics are complicating the efforts of the two biggest polluters in history — the United States and Europe — to slow down global warming, just as scientists warn of intensifying hazards.
In his State of the Union speech Tuesday evening, President Joe Biden barely mentioned his climate goals, despite promises to make climate an issue that drives his presidency. European politicians have their own problem: They are struggling to get out from under one of the Kremlin’s most powerful economic weapons — its fossil fuel exports, which Europe relies on for heat and electricity.
Oil and gas prices are soaring globally. That is a boon to those who extract and sell the very products that drive fatal heat waves, wildfires and sea level rise. And it is leading to new demands for increased drilling in the United States, already one of the world’s biggest producers of oil and gas.
The developments come just days after an exhaustive report from the United Nations that implored world leaders to sharply reduce emissions of carbon dioxide, methane and other greenhouse gases that are dangerously heating the planet. To fail, they said, is to face a harrowing future where the rate of global warming outpaces humanity’s ability to adapt.
In Washington, Biden’s ambitious climate legislation has been blocked by unanimous Republican opposition as well as a senator from his own party, Joe Manchin, who represents the coal-producing state of West Virginia and has strong backing from the fossil fuel industry. The Supreme Court could further limit Biden’s ambitions in a case that began this week that could restrict the federal government’s ability to regulate greenhouse gas emissions.
In his State of the Union address — traditionally considered a president’s best opportunity to rally the nation around an agenda — Biden cited climate in the context of his proposals to create jobs by repairing roads, airports and other crucial infrastructure. “We’ll do it all to withstand the devastating effects of the climate crisis,” he said.
But high gas prices pose a risk to Democrats before midterm elections, and his remarks were intended to blunt that, too. He said he would release oil reserves — 30 million barrels worth — to keep prices down for Americans. “We are going to be OK,” he said.
Energy experts said Biden missed an opportunity to connect the war in Ukraine to the need to more swiftly sever an economic reliance on fossil fuels. “The president did not articulate the long-term opportunity for the U.S. to lead the world in breaking free of the geopolitical nightmare that is oil dependency,” said Paul Bledsoe, a strategic adviser to the Progressive Policy Institute, a Washington-based think tank.
Vedant Patel, a spokesperson for the White House, said Biden has shown “unwavering support” for climate solutions.
The Russian invasion in Ukraine has brought world leaders to a new, difficult crossroad. The European Union is feeling its effects most acutely.
Russia supplies nearly 40% of the gas that Europeans use for heat and electricity. In exposing the enormous leverage that Russia has enjoyed with its energy exports, the Ukraine conflict is forcing European leaders to make some urgent choices: Should it build new fossil fuel infrastructure so that it can replace Russian fuel with liquefied natural gas from elsewhere, chiefly the United States? Or should it shift away from fossil fuels faster?
Next week the world will get an early glimpse of Europe’s leanings, because officials in Brussels are due to announce a new energy strategy aimed at weaning the continent off Russian gas.
A draft of the report, reviewed by The New York Times, suggests that the new strategy will propose speeding up energy efficiency measures and renewable energy installations. It views imports of liquefied natural gas, or LNG, from the United States and elsewhere as a short-term measure to offset Russian piped gas.
“This war will have deep repercussions one way or another on our own energy system,” Kadri Simson, the European Union energy commissioner, told reporters this week after an emergency meeting with energy ministers from the 27-member bloc.
Analysts have said European countries can quickly reduce gas dependence with energy efficiency measures and ramping up renewable energy investments, which are already in line with Europe’s ambition to stop pumping additional greenhouse gases into the atmosphere by midcentury. The conflict in Ukraine could fast-track some of that. It could also lead to what Lisa Fischer, who follows energy policy at E3G, a research group, called “a tectonic shift” — using renewables, rather than ample gas storage, to achieve energy security.
In an interview this week, John Kerry, Biden’s special envoy for climate change, emphasized that, saying Putin has “weaponized” fossil fuels, particularly gas.
“It’s related, and people need to see it that way. Energy is a huge part of the geopolitics of what the options are,” Kerry said. “Energy is a key weapon within this fight, and if there were far less dependency on gas there would be a different set of plays.”
The United States, for its part, has ramped up exports of LNG to Europe to counter the decline in Russian piped gas. By the end of this year, the United States is poised to have the world’s largest LNG export capacity.
Current sanctions that nations have imposed on Russia do not directly target its oil and gas sector, but the Ukraine invasion is expected to disrupt supply routes and has stoked fears that Russia could curtail shipments.
In the United States, Republicans have said the Russian invasion of Ukraine underscores the need to aggressively drill for more oil and gas in the United States to provide Europe with an alternative. Sen. Kevin Cramer, R-N. D., on Tuesday called Biden’s opening of the strategic reserve “a thimble in the ocean.”
White House officials said Biden wove climate change and clean energy throughout his speech. He noted that Ford and GM are investing billions of dollars to build electric vehicles, creating millions of manufacturing jobs in the United States. He also noted that funding from the infrastructure package will build a national network of 500,000 electric vehicle charging stations.
But climate change policy is at a critical juncture in the Biden administration. The president’s centerpiece legislative agenda, which he had called the Build Back Better act, is dead. Democrats still hope to pass approximately $500 billion of clean energy tax incentives that had been part of the package, but opportunities to do so are waning. If that investment does not come through and the Supreme Court also restricts the administration’s ability to regulate emission, Biden’s goal of cutting U.S. emissions roughly in half compared with 2005 levels could be essentially unattainable.
Even if climate wasn’t the stated focus of Biden’s address Tuesday, administration officials said Russia’s war against Ukraine has not pushed climate change off the agenda. They noted that Biden has made climate change an emphasis in virtually every federal agency, and has moved ahead with major clean energy deployments including a record-breaking offshore wind auction last week that brought in more than $4 billion.
© 2022 The New York Times Company
MYOB
KEEP YOUR HANDS OFF OUR BODIES
Advanced Tennessee bill seeks to ban abortion medication at colleges, through mailMelissa Brown, Nashville Tennessean
Wed, March 2, 2022
Francie Hunt, executive director of Tennessee Advocates for Planned Parenthood, speaks during a demonstration at state Capitol in Nashville, Tenn., Monday, April 19, 2021.
Tennessee legislators on Tuesday advanced a bill to ban abortion medication distribution through the mail and on college campuses, the latest in a round of similar legislation in the U.S. prompted by federal approval of delivery and telehealth dispensation of the pills.
The legislation, which passed the Senate Judiciary Committee, seeks to ban mail delivery of abortion medication, an increasingly common method to terminate early-term pregnancies up to 10 weeks.
More than 75% of Tennessee abortions occurred within the first 10 weeks of pregnancy in 2018, according to the most recent available state data. The American College of Obstetricians and Gynecologists has endorsed medical or chemical abortion as a safe procedure.
Rep. Robin Smith, R-Hixson, first introduced the bill, which would require physicians dispense the two-pill medication in person, blocking patients from receiving it through a qualified nurse or filling a doctor-written prescription at a pharmacy.
The bill would prohibit the medication at postsecondary schools as well, which Tennessee code defines as institutions in the state university and community college system.
“In this state, we have an opportunity to put safety measures around chemical abortion which currently allows the use of telemedicine and courier delivery, as opposed to a qualified examination and direct distribution of powerful medicines," Smith said.
Opponents of the legislation say it is a disingenuous attempt to further restrict access to safe abortion procedures in Tennessee, as abortion medication is taken over a 48-hour period and the bill simply requires in-person dispensation.
Sen. Raumesh Akbari, D-Memphis, voted against the legislation, calling it "arbitrary and unnecessary" when the bill doesn't require doctors to monitor women through the procedure. Akbari also criticized the postsecondary schools component, saying there is "no rationale" for placing additional restrictions on college students who are legal adults.
"The doctor is not going to monitor the woman as she takes the medication, she does not even have to start taking the medication at the office," Akbari said.
"You have women and families who are making a very difficult decision, and all this does is to make it more difficult to make this decision. I think women deserve the same freedom as men when it comes to accessing safe and legal medications," Akbari said, calling for a greater focus on comprehensive sexual education and expanding health coverage to address unplanned pregnancies. "There is evidence to suggest that these pills are less dangerous and have less incidents than Tylenol or Viagra."
Medical abortion Q&A: Are abortion pills safe? Can I get out-of-state prescription? Your questions answered
More: FDA makes abortion pills permanently available through mail and telehealth by removing in-person restriction
Bill calls for penalties
The legislation initially required physicians to keep detailed reports on patients who seek medical care for abortion complications and called for possible jail time for physicians who failed to follow the proposed statute, which one Nashville doctor said could have a dangerous chilling effect on women seeking care after miscarriages and abortions.
A Senate amendment to the bill struck the reporting requirements and jail time penalties, though the legislation maintains violation of the proposed law would be classified as a felony and liable for up to $50,000. Patients who receive the prescription medication are protected under the proposed bill.
Nashville emergency medicine physician Dr. Katrina Green this week spoke against the legislation, particularly any reporting requirements that could intimidate women seeking medical care for chemical abortions and miscarriages, medically referred to as spontaneous abortions. The two are often indistinguishable, Green said.
"I'm a firm believer in my patient's rights to decide what's best for them," Green said. "Part of that is having the ability to decide what happens with their pregnancies."
The FDA won't allow you to get the abortion pill from a pharmacy with a prescription. The coronavirus pandemic has made it even harder to access.
When asked about physician concern over the possible chilling effect of this legislation for women seeking medical care after an abortion or miscarriage, Smith said the legislation is "advocating for patient safety."
"What this bill simply does is it to establish protections for patients who, according to Planned Parenthood, could pass blood clots the size of a lemon as part of this chemical abortion," Smith said.
The Tennessee legislation mirrors a raft of similar anti-abortion measures brought across the U.S. in recent months after the Food and Drug Administration last year approved delivery and telehealth dispensation of the medication. Georgia legislators this week advanced a similar ban on women receiving the abortion bill through the mail or at universities that receiving state funds, according to the Atlanta Journal-Constitution.
Reach Melissa Brown at mabrown@tennessean.com.
This article originally appeared on Nashville Tennessean: Tennessee abortion legislation would ban abortion pills at college, in mail
UN rights forum picks ex-ICC prosecutor to lead Ethiopia abuses investigation
An Eritrean refugee poses for a portrait behind a curtain in Addis Ababa, Ethiopia
Wed, March 2, 2022
ADDIS ABABA (Reuters) - The U.N. Human Rights Council has picked the former chief prosecutor of the International Criminal Court to lead a panel investigating violations of human rights in the conflict in northern Ethiopia, the council said on Wednesday.
Ethiopian federal troops went to war with rebellious Tigrayan forces in November 2020. Since the war erupted, Reuters has reported atrocities by all sides, which the parties to the fighting have denied.
The council voted in December to establish an independent investigative commission, to look into alleged violations by all sides and to identify perpetrators with a view to accountability.
Fatou Bensouda, a Gambian national who was chief prosecutor at the ICC between 2012 and 2021, will lead the panel of three, the council said in a statement.
The panel will "establish the facts and circumstances surrounding the alleged violations and abuses, collect and preserve evidence, to identify those responsible, where possible," the council said.
It will also "make such information accessible and usable in support of ongoing and future accountability efforts."
The team will brief the council during its mid-year session and present a written report towards the end of the year.
Gedion Timothewos, the Ethiopia's minister of justice, said they will cooperate with any investigation "focused on the genuine promotion and protection of human rights."
"There is light at the end of the tunnel and the Ethiopian people in their collective wisdom will opt for peace and reconciliation," he told the council in Geneva.
Thousands of civilians have died and millions have fled in the conflict between the federal government and rebellious forces including fighters loyal to the Tigray People's Liberation Front (TPLF), which dominated Ethiopia's ruling coalition for nearly 30 years.
The TPLF welcomed the council's move to investigate atrocities in December, when the body passed a resolution to create it.
(Reporting by Stephanie Nebehay in Geneva; Writing by Duncan Miriri, Editing by William Maclean)
An Eritrean refugee poses for a portrait behind a curtain in Addis Ababa, Ethiopia
Wed, March 2, 2022
ADDIS ABABA (Reuters) - The U.N. Human Rights Council has picked the former chief prosecutor of the International Criminal Court to lead a panel investigating violations of human rights in the conflict in northern Ethiopia, the council said on Wednesday.
Ethiopian federal troops went to war with rebellious Tigrayan forces in November 2020. Since the war erupted, Reuters has reported atrocities by all sides, which the parties to the fighting have denied.
The council voted in December to establish an independent investigative commission, to look into alleged violations by all sides and to identify perpetrators with a view to accountability.
Fatou Bensouda, a Gambian national who was chief prosecutor at the ICC between 2012 and 2021, will lead the panel of three, the council said in a statement.
The panel will "establish the facts and circumstances surrounding the alleged violations and abuses, collect and preserve evidence, to identify those responsible, where possible," the council said.
It will also "make such information accessible and usable in support of ongoing and future accountability efforts."
The team will brief the council during its mid-year session and present a written report towards the end of the year.
Gedion Timothewos, the Ethiopia's minister of justice, said they will cooperate with any investigation "focused on the genuine promotion and protection of human rights."
"There is light at the end of the tunnel and the Ethiopian people in their collective wisdom will opt for peace and reconciliation," he told the council in Geneva.
Thousands of civilians have died and millions have fled in the conflict between the federal government and rebellious forces including fighters loyal to the Tigray People's Liberation Front (TPLF), which dominated Ethiopia's ruling coalition for nearly 30 years.
The TPLF welcomed the council's move to investigate atrocities in December, when the body passed a resolution to create it.
(Reporting by Stephanie Nebehay in Geneva; Writing by Duncan Miriri, Editing by William Maclean)
WHO IS WINNING THE WAR
Defense Stocks Soar $69 Billion On Russia's War
MATT KRANTZ
03/03/2022
Defense Stocks Soar $69 Billion On Russia's War
MATT KRANTZ
03/03/2022
Russia's attack on the Ukraine sparked a global humanitarian and political crisis. But S&P 500 investors are still finding ways to engage in defense companies helping nations defend themselves in a world torn by war.
Investors have already posted $69 billion in stock gains on the 33 major defense and aerospace stocks in the largest ETF of its kind, the iShares U.S. Aerospace & Defense ETF (ITA), says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
The ETF itself is up nearly 10% from Russia's initial Feb. 24 attack on Ukraine. That's more than twice the 4% rise in the S&P 500 in that time. Analysts, too, see more upside in a year's time in more than three-quarters of the stocks in the top defense ETF. And not just a little rise — they're calling for an average double-digit gain.
And yet, the top defense ETF doesn't show the magnitude of gains seen in the defense and aerospace industry in the wake of Russia's attack. The 33 stocks in the ETF, on average, are up nearly 13% from the attack and more than 5.3% this year so far. The S&P 500 itself, measured by the SPDR S&P 500 ETF Trust (SPY), is down nearly 8% this year.
"Russia's invasion of Ukraine, representing Europe's worst security crisis since World War II, has sparked global outrage," said Jack Ablin, strategist at Cresset Capital. "The court of public opinion clearly supports the Ukrainian people and their president, Volodymyr Zelenskyy."
Many of the ETFs and defense stocks have run up. But analysts still see upside for many remaining.
Targeting The S&P 500 Defense ETFs
With assets of more than $3 billion, iShares U.S. Aerospace & Defense is twice the size of its next biggest rival, the SPDR S&P Aerospace & Defense ETF (XAR).
But defense is not a massive area for ETFs. There are now only three major ETFs to choose from for investors looking to buy into the sector. The third is the relatively small Invesco Aerospace & Defensive (PPA), with $780 million in assets. And in what's perhaps the worst timing ever for an ETF, the VictoryShares Protect America ETF shut down late last year. And it's easy to see why: Shares of defense companies largely lagged the S&P 500 over the past five years.
The iShares U.S. Aerospace & Defense ETF, for instance, is up just 46.2% over the past five years. That chokes on the exhaust of the 84.2% gain by the S&P 500 during that time. Part of the underperformance is due to its No. 1 holding, a 23% position in Raytheon Technologies (RTX). Shares of Raytheon are down more than 10% in five years. That's all but tried the patience of defense and aerospace investors.
But S&P 500 analysts are starting to warm up to the sector — just not in the obvious places. They see the 32 stocks in the iShares U.S. Aerospace & Defense ETF, with current price targets, gaining an average of 14.3% over the next 12 months.
Analysts Like These Defense Stocks Best
Investors made no secret of the defense stocks they like best amid this new type of warfare. Eleven of the stocks in the iShares U.S. Aerospace & Defense ETF are up 15% or more from the time war erupted in Ukraine. And of those, analysts still see upside in more than half the stocks.
Take Maxar Technologies (MAXR). The company provides space imagery of the kind useful in monitoring military events in Europe. Shares are up more than 46% from the time war broke out to 35.80 a share. That gain alone added $882 million in market value for investors. But even so, analysts think this stock still has more than 13% upside until hitting its 12-month price target of 40.75. Additionally, the company is seen making 54 cents a share (or more than $41 million in profit) in 2022, snapping many years of losing money.
Looking At The S&P 500 Defense Giants
Analysts, though, are less bullish on the obvious defense giants that already ran up. Northrop Grumman (NOC) already pulled 9% past analysts' 12-month price target on the stock. Shares are up a powerful 18% since the war began, putting $10.9 billion into investors' portfolios. It's a similar story with Lockheed Martin (LMT). Following a 27% run-up just this year, and 16% since the war, shares blasted past analysts' price target by some 7%.
But opportunity still abounds. Nations will need to take serious looks at their defenses. Analysts think Defense Department contractor Kratos Defense & Security Solutions (KTOS) will be worth nearly 21% more than it is now in twelve months. And that's following a nearly 30% jump since the war.
Sources: IBD, S&P Global Market Intelligence based on holdings in iShares U.S. Aerospace & Defense ETF
Investors have already posted $69 billion in stock gains on the 33 major defense and aerospace stocks in the largest ETF of its kind, the iShares U.S. Aerospace & Defense ETF (ITA), says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
The ETF itself is up nearly 10% from Russia's initial Feb. 24 attack on Ukraine. That's more than twice the 4% rise in the S&P 500 in that time. Analysts, too, see more upside in a year's time in more than three-quarters of the stocks in the top defense ETF. And not just a little rise — they're calling for an average double-digit gain.
And yet, the top defense ETF doesn't show the magnitude of gains seen in the defense and aerospace industry in the wake of Russia's attack. The 33 stocks in the ETF, on average, are up nearly 13% from the attack and more than 5.3% this year so far. The S&P 500 itself, measured by the SPDR S&P 500 ETF Trust (SPY), is down nearly 8% this year.
"Russia's invasion of Ukraine, representing Europe's worst security crisis since World War II, has sparked global outrage," said Jack Ablin, strategist at Cresset Capital. "The court of public opinion clearly supports the Ukrainian people and their president, Volodymyr Zelenskyy."
Many of the ETFs and defense stocks have run up. But analysts still see upside for many remaining.
Targeting The S&P 500 Defense ETFs
With assets of more than $3 billion, iShares U.S. Aerospace & Defense is twice the size of its next biggest rival, the SPDR S&P Aerospace & Defense ETF (XAR).
But defense is not a massive area for ETFs. There are now only three major ETFs to choose from for investors looking to buy into the sector. The third is the relatively small Invesco Aerospace & Defensive (PPA), with $780 million in assets. And in what's perhaps the worst timing ever for an ETF, the VictoryShares Protect America ETF shut down late last year. And it's easy to see why: Shares of defense companies largely lagged the S&P 500 over the past five years.
The iShares U.S. Aerospace & Defense ETF, for instance, is up just 46.2% over the past five years. That chokes on the exhaust of the 84.2% gain by the S&P 500 during that time. Part of the underperformance is due to its No. 1 holding, a 23% position in Raytheon Technologies (RTX). Shares of Raytheon are down more than 10% in five years. That's all but tried the patience of defense and aerospace investors.
But S&P 500 analysts are starting to warm up to the sector — just not in the obvious places. They see the 32 stocks in the iShares U.S. Aerospace & Defense ETF, with current price targets, gaining an average of 14.3% over the next 12 months.
Analysts Like These Defense Stocks Best
Investors made no secret of the defense stocks they like best amid this new type of warfare. Eleven of the stocks in the iShares U.S. Aerospace & Defense ETF are up 15% or more from the time war erupted in Ukraine. And of those, analysts still see upside in more than half the stocks.
Take Maxar Technologies (MAXR). The company provides space imagery of the kind useful in monitoring military events in Europe. Shares are up more than 46% from the time war broke out to 35.80 a share. That gain alone added $882 million in market value for investors. But even so, analysts think this stock still has more than 13% upside until hitting its 12-month price target of 40.75. Additionally, the company is seen making 54 cents a share (or more than $41 million in profit) in 2022, snapping many years of losing money.
Looking At The S&P 500 Defense Giants
Analysts, though, are less bullish on the obvious defense giants that already ran up. Northrop Grumman (NOC) already pulled 9% past analysts' 12-month price target on the stock. Shares are up a powerful 18% since the war began, putting $10.9 billion into investors' portfolios. It's a similar story with Lockheed Martin (LMT). Following a 27% run-up just this year, and 16% since the war, shares blasted past analysts' price target by some 7%.
But opportunity still abounds. Nations will need to take serious looks at their defenses. Analysts think Defense Department contractor Kratos Defense & Security Solutions (KTOS) will be worth nearly 21% more than it is now in twelve months. And that's following a nearly 30% jump since the war.
Sources: IBD, S&P Global Market Intelligence based on holdings in iShares U.S. Aerospace & Defense ETF
Ukraine to Plan Second War-Bond Auction to Fund Military
Priscila Azevedo Rocha
Thu, March 3, 2022
(Bloomberg) -- Ukraine plans to auction another war bond next week to raise funding for its military and its resistance to Russia’s invasion, according to a person familiar with the matter.
The government will use its regular Tuesday slot for what it calls “military bonds,” the person said, declining to be identified before the official announcement. The finance ministry confirmed the plans, issuing a market announcement that includes a one-year bond auction.
Ukraine raised 8.1 billion hryvnia ($277 million) in the first such sale earlier this week. That event drew global attention as people other than professional investors sought to buy the debt to show support for the country.
The proceeds from the auctions will go to “priority humanitarian aid needs,” which include clothes and footwear, blankets, and hospital beds, according to a document seen by Bloomberg. They’ll also fund protective gear such as helmets and bulletproof vests, as well as communication equipment and laptops.
Ukraine’s war bonds have similar characteristics to the debt it sells regularly in peacetime, and are one of a number of funding measures the country has put in place to raise money for both its armed forces and civilians.
Yuriy Butsa, Ukraine’s debt chief, told Bloomberg Television Tuesday that the government is also looking at options including foreign-currency issuance.
Officials at the debt management office are working on ways to help new investors access next week’s auction after technical issues on Tuesday.
Since the war started last week, Ukraine’s finance ministry cut off access to its website from abroad to avoid cyber attacks, making it difficult for investors to get access to information. The ministry plans to communicate with investors via its Twitter and LinkedIn accounts.
The government wants to make access easier as it taps the global swell of support for the country in its war with Russia. Crypto wallets it set up last week have already received donations totaling more than $40 million. Including an NGO that funds the military, and the figure tops $50 million.
And around the world, private citizens have rallied to the country’s side. Many in neighboring countries have offered rooms and shelter to Ukrainians fleeing the war. Meanwhile, Russia has become a commercial pariah, hit by sweeping sanctions that have crippled its markets.
Priscila Azevedo Rocha
Thu, March 3, 2022
(Bloomberg) -- Ukraine plans to auction another war bond next week to raise funding for its military and its resistance to Russia’s invasion, according to a person familiar with the matter.
The government will use its regular Tuesday slot for what it calls “military bonds,” the person said, declining to be identified before the official announcement. The finance ministry confirmed the plans, issuing a market announcement that includes a one-year bond auction.
Ukraine raised 8.1 billion hryvnia ($277 million) in the first such sale earlier this week. That event drew global attention as people other than professional investors sought to buy the debt to show support for the country.
The proceeds from the auctions will go to “priority humanitarian aid needs,” which include clothes and footwear, blankets, and hospital beds, according to a document seen by Bloomberg. They’ll also fund protective gear such as helmets and bulletproof vests, as well as communication equipment and laptops.
Ukraine’s war bonds have similar characteristics to the debt it sells regularly in peacetime, and are one of a number of funding measures the country has put in place to raise money for both its armed forces and civilians.
Yuriy Butsa, Ukraine’s debt chief, told Bloomberg Television Tuesday that the government is also looking at options including foreign-currency issuance.
Officials at the debt management office are working on ways to help new investors access next week’s auction after technical issues on Tuesday.
Since the war started last week, Ukraine’s finance ministry cut off access to its website from abroad to avoid cyber attacks, making it difficult for investors to get access to information. The ministry plans to communicate with investors via its Twitter and LinkedIn accounts.
The government wants to make access easier as it taps the global swell of support for the country in its war with Russia. Crypto wallets it set up last week have already received donations totaling more than $40 million. Including an NGO that funds the military, and the figure tops $50 million.
And around the world, private citizens have rallied to the country’s side. Many in neighboring countries have offered rooms and shelter to Ukrainians fleeing the war. Meanwhile, Russia has become a commercial pariah, hit by sweeping sanctions that have crippled its markets.
U.S. Treasury warns crypto firms on Russia cybersecurity threat - source
Thu, March 3, 2022,
By Hannah Lang
March 3 (Reuters) - The U.S. Treasury Department has reached out to cryptocurrency companies about their cybersecurity controls amid concerns that Russia could wage retaliatory cyber attacks in response to Western sanctions, according to a person familiar with the situation.
The United States and its allies have unleashed a slew of sanctions targeting Russia's banks, state-owned entities, and elites, among others, following the country's invasion of Ukraine
Governments have warned for weeks that Russia or its allies could carry out cyber attacks in retribution for sanctions, leading banks to increase monitoring, scenario-planning and line up extra staff in case hostile activity surges.
In a sign U.S. regulators see the ballooning cryptocurrency industry as a growing source of systemic risk, U.S. Treasury officials have also been in discussions with cryptocurrency exchanges and trade groups to ensure U.S. digital assets are safe, said the person familiar with the matter.
Officials are also sharing indicators that IT systems have been compromised, such as a network infiltration or a data breach, with crypto and other financial firms, the person said.
The value of all cryptocurrencies surged past $3 trillion last year, with approximately 13% to 14% of Americans invested in digital assets as of 2021, according to research by the University of Chicago.
As the digital asset has become more popular, crypto hacks have grown. Last year, for example, an anonymous hacker stole roughly $600 million in cryptocurrencies from Poly Network, a decentralized finance network, before giving it back. Hackers also stole at least $150 million from crypto exchange BitMart.
Regulators have warned that crypto routs or runs on crypto currencies could pose a risk to the broader financial system.
Some U.S. lawmakers have expressed concern that digital assets could be used to evade Western sanctions, although Biden administration officials have played down that risk.
Thu, March 3, 2022,
By Hannah Lang
March 3 (Reuters) - The U.S. Treasury Department has reached out to cryptocurrency companies about their cybersecurity controls amid concerns that Russia could wage retaliatory cyber attacks in response to Western sanctions, according to a person familiar with the situation.
The United States and its allies have unleashed a slew of sanctions targeting Russia's banks, state-owned entities, and elites, among others, following the country's invasion of Ukraine
Governments have warned for weeks that Russia or its allies could carry out cyber attacks in retribution for sanctions, leading banks to increase monitoring, scenario-planning and line up extra staff in case hostile activity surges.
In a sign U.S. regulators see the ballooning cryptocurrency industry as a growing source of systemic risk, U.S. Treasury officials have also been in discussions with cryptocurrency exchanges and trade groups to ensure U.S. digital assets are safe, said the person familiar with the matter.
Officials are also sharing indicators that IT systems have been compromised, such as a network infiltration or a data breach, with crypto and other financial firms, the person said.
The value of all cryptocurrencies surged past $3 trillion last year, with approximately 13% to 14% of Americans invested in digital assets as of 2021, according to research by the University of Chicago.
As the digital asset has become more popular, crypto hacks have grown. Last year, for example, an anonymous hacker stole roughly $600 million in cryptocurrencies from Poly Network, a decentralized finance network, before giving it back. Hackers also stole at least $150 million from crypto exchange BitMart.
Regulators have warned that crypto routs or runs on crypto currencies could pose a risk to the broader financial system.
Some U.S. lawmakers have expressed concern that digital assets could be used to evade Western sanctions, although Biden administration officials have played down that risk.
(Reporting by Hannah Lang in Washington; editing by Jonathan Oatis)
Lukoil, a Russian Oil Company, Calls for an End to the Ukraine War
March 3, 2022
Lukoil, Russia’s second-largest oil company, appeared to distance itself from President Vladimir V. Putin on Thursday by calling for a “fast resolution” to Russia’s invasion of Ukraine.
The statement most likely reflects the company’s desire to protect its extensive overseas operations, which include a network of more than 200 franchised gas stations in states like New York and New Jersey. Lukoil is one of the most recognizable Russian brands in the United States.
Many lawmakers in Washington are pressing the Biden administration to ban the purchase of Russian oil by U.S. companies and to impose sanctions on Russian energy companies. Shares of Lukoil on the London Stock Exchange have fallen more than 40 percent since mid-February.
Lukoil has long projected a more independent image than Rosneft, the state-controlled company that dominates the Russian oil industry. Lukoil was founded in 1991 as a state-owned enterprise as the Soviet Union was falling apart. The company went private in 1993, and seven years later it acquired Getty Oil, an American company, which gave Lukoil a network of U.S. filling stations.
“We stand for the immediate cessation of the armed conflict and duly support its resolution through the negotiation process and through diplomatic means,” Lukoil said in a letter to shareholders on Thursday.
It was not clear whether the move was a sign that executives of Russia’s largest private enterprise were breaking with Mr. Putin, or mainly an effort to persuade Western leaders, business partners and customers to keep doing business with the company.
“It says they realize it’s going to be difficult for them to engage in international commerce, let alone retail sales in the U.S.,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service. “I’d call a Russian brand for gasoline the 21st-century equivalent of the scarlet letter.”
While petroleum products are the biggest Russian import in the United States and Europe, Russian products and sports teams have become pariahs. Several states have banned the sale of Russian vodka, and restaurants, stores and bars across the United States have taken Russian spirits off their shelves.
The Newark City Council voted on Wednesday to suspend the business licenses of local Lukoil gas stations.
Lukoil stations in the United States sell fuel produced in many countries, including the United States. They are operated as independent franchises, and make up a small fraction of Lukoil’s operations. The company has subsidiaries in roughly 30 countries, including those involved in exploring and producing oil and gas in Azerbaijan, Egypt, Colombia and Iraq. The company’s biggest reserves are in Russia, particularly western Siberia.
In its letter to shareholders, Lukoil said it “makes every effort to continue stable operations in all countries and regions of its presence, fulfilling the main mission — to provide reliable energy supplies to consumers around the world.”
Source: NY Times
March 3, 2022
Lukoil, Russia’s second-largest oil company, appeared to distance itself from President Vladimir V. Putin on Thursday by calling for a “fast resolution” to Russia’s invasion of Ukraine.
The statement most likely reflects the company’s desire to protect its extensive overseas operations, which include a network of more than 200 franchised gas stations in states like New York and New Jersey. Lukoil is one of the most recognizable Russian brands in the United States.
Many lawmakers in Washington are pressing the Biden administration to ban the purchase of Russian oil by U.S. companies and to impose sanctions on Russian energy companies. Shares of Lukoil on the London Stock Exchange have fallen more than 40 percent since mid-February.
Lukoil has long projected a more independent image than Rosneft, the state-controlled company that dominates the Russian oil industry. Lukoil was founded in 1991 as a state-owned enterprise as the Soviet Union was falling apart. The company went private in 1993, and seven years later it acquired Getty Oil, an American company, which gave Lukoil a network of U.S. filling stations.
“We stand for the immediate cessation of the armed conflict and duly support its resolution through the negotiation process and through diplomatic means,” Lukoil said in a letter to shareholders on Thursday.
It was not clear whether the move was a sign that executives of Russia’s largest private enterprise were breaking with Mr. Putin, or mainly an effort to persuade Western leaders, business partners and customers to keep doing business with the company.
“It says they realize it’s going to be difficult for them to engage in international commerce, let alone retail sales in the U.S.,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service. “I’d call a Russian brand for gasoline the 21st-century equivalent of the scarlet letter.”
While petroleum products are the biggest Russian import in the United States and Europe, Russian products and sports teams have become pariahs. Several states have banned the sale of Russian vodka, and restaurants, stores and bars across the United States have taken Russian spirits off their shelves.
The Newark City Council voted on Wednesday to suspend the business licenses of local Lukoil gas stations.
Lukoil stations in the United States sell fuel produced in many countries, including the United States. They are operated as independent franchises, and make up a small fraction of Lukoil’s operations. The company has subsidiaries in roughly 30 countries, including those involved in exploring and producing oil and gas in Azerbaijan, Egypt, Colombia and Iraq. The company’s biggest reserves are in Russia, particularly western Siberia.
In its letter to shareholders, Lukoil said it “makes every effort to continue stable operations in all countries and regions of its presence, fulfilling the main mission — to provide reliable energy supplies to consumers around the world.”
Source: NY Times
The hydrogen market’s growing credibility
When journalists write about other journalists, it often smacks of navel gazing — and is thus best avoided. However, this week I am breaking this rule since I have been struck by the intensifying debate inside the media about how to cover the climate crisis.
To cite one example: on Tuesday the World Editors Forum is holding its first virtual global climate conference to discuss “the gaps between what audiences need and want on climate change and what newsrooms are delivering right now.” This will discuss issues such as the role of storytelling and how to communicate technical data. Another debating point will be the decision by Canada’s Globe and Mail to release more than 180 files of its raw sources from an investigation into last summer’s extreme heat, reflecting a wider #ReadTheSources campaign from Unesco and the French group Outlet to make climate reporting more credible.
Can tactics such as these offset the crumbling levels of public trust in the media? What else can journalists (like us) do to communicate climate issues effectively? We would love to hear your views, given that Moral Money was established three years ago to illuminate green finance issues and ESG.
Meanwhile in today’s newsletter, we cover a striking data initiative in the fast-expanding world of hydrogen, a pandemic-era twist in philanthropy at Fidelity, new data about impact investing and alarming news about how rising sea levels threaten the US east coast. And if you want another sign of how sustainability issues are getting more media focus, check out the breaking story about how Carl Icahn, the corporate raider, has teamed up with animal welfare activists (which we will return to later this week.) Read on.
Hydrogen is hot
The hydrogen market is red hot today, or so many opportunistic investors would say. However, like many nascent areas of finance, it has hitherto operated with considerable opacity. Last autumn, one of the first efforts to create more price transparency and consistency emerged: Deutsche Börse’s power and gas exchange EEX announced plans to launch a new price index in 2022.
Now another initiative is under way to help the market become more credible: S&P Global Platts, a provider for benchmark prices in the commodities and energy markets, is joining forces with other industry players to create a so-called Open Hydrogen Initiative (OHI) — a platform to let investors and companies track carbon emissions from hydrogen.
It is easy to see why this is needed. Hydrogen has recently sparked great excitement in the renewable energy world since the fuel is light, storable, energy-dense, and appears to produce no direct emissions of pollutants or greenhouse gases, a key attracter for green investors, as a recent report from the International Energy Agency explains.
As a result, the sector is growing fast: in 2020, the space was estimated to be worth more than $187bn, but it is projected to reach $286bn by 2027, according to MarketWatch. Meanwhile, annual government funding for hydrogen has reached $16bn a year globally, up 40 per cent from July 2021, according to research group Bloomberg NEF.
However, thus far there have been relatively few ways for investors, companies or governments to track indirect emissions from the fuel in a consistent way. This matters given the pressure on companies (and asset managers) to measure all aspects of emissions emanating from corporate supply chains, under scope one, two and three reporting systems.
To tackle this, S&P Platts is working with GTI (the research education group) and the National Energy Technology Laboratory to build tools to track hydrogen greenhouse gas emissions at the production facility level. These will be free for investors and companies to use, and aim to establish benchmarks for the market. “What we know is that we need hydrogen. It is very versatile. But what we have not yet had is precise and consistent technical tools for measuring hydrogen’s carbon intensity,” said Paula Gant, senior vice-president of strategy and innovation at GTI. “And, we’re at a place where the market needs that to enable hydrogen’s rollout.”
The group hopes this will promote wider adoption of hydrogen. “We see hydrogen being a key part of the future of the energy market in the decades to come” Jonty Rushforth, S&P Global Platts senior director, told Moral Money.
However, technical challenges remain. Previous research from S&P Global Platts suggests the cost of producing hydrogen from renewables will need to fall by more than 50 per cent to be a viable alternative to traditional energy. Hydrogen faces big production challenges and is difficult to store and transport. (The Saudis, however, seem to have set their bet on the growing market.)
Establishing price and emissions indices could spark more research and development to tackle these issues; or so the group hopes. And the initiative incorporates another interesting twist that investors should watch: the group intends to include metrics that indicate how much confidence investors should have in the emissions data.
This reflects a growing recognition that “green” measurements can sometimes be more art than science. This should not stop investors or companies from trying to measure emissions; but a more realistic debate is needed about the limits of current tools. Call this, if you like, another sign that the green market is growing up.
Sustainability schism raises questions for the ISSB
People rarely log on to LinkedIn for a fight, but that’s what broke out on Friday when Bob Eccles, a visiting professor at Oxford university’s Saïd Business School, used the site to promote what he thought was “an innocuous little piece” in the Harvard Business Review.
In it, he and with Bhakti Mirchandani, managing director of responsible investing at Trinity Church Wall Street, argued that investors need uniform accounting standards for ESG, and that the new International Sustainability Standards Board (ISSB) could provide the global baseline from which companies and regulators could build.
Eccles’ post set some heads nodding and others spinning. “WTF Bob?!?” wrote Bill Baue, co-founder of the Sustainability Context Group, saying he was dangerously conflating ESG with sustainability and pushing incremental solutions that could not produce real change. Mark McElroy, director of the Center for Sustainable Organizations, accused Eccles of “appeasement”.
We won’t rehash the whole debate about single, double, dynamic and contextual materiality here, but it’s worth reading to understand a question hanging over the ISSB: is it an imperfect but necessary first step towards greater clarity and rigour, or a fudge that will perpetuate flaws in ESG while satisfying nobody?
Eccles has asked his “cantankerous critics” not to let the perfect be the enemy of the good. Meanwhile, Emmanuel Faber, the former Danone chief executive, has only just been named as the ISSB’s first chair. The intensity of feeling it has sparked suggests that his will not be an easy job.
A look at pandemic-era philanthropy
Did the experience of Covid-19 make people feel more or less generous? The former — judging from the 2022 report from Fidelity Charitable, the philanthropic foundation that provides donor-advised fund (DAF) options for asset managers’ clients. Last year investors made a record $10.3bn in these DAF grants, 41 per cent more than in 2019, ie before the pandemic.
This is striking. What is also notable is that there was a sharp increase in the assets allocated to impact investments (that is, those made with ESG factors in mind), which jumped to $3bn in 2021, up 67 per cent on the previous year. Another thought-provoking twist is that two-thirds of these donations were made not in dollars, but non-cash assets (which are converted into cash when Fidelity Charity ultimately gives these to charities.) This included real estate. But another, newish, component, was cryptocurrencies. As I wrote this week, donations in digital assets (mostly bitcoin) rose twelvefold last year.
The pandemic-era philanthropy boom has happened alongside a wider trend of impact investment growth over the past decade. The number of impact investments annually has grown fivefold since 2011, according to research from PitchBook and BCG.
As private equity companies crowd into climate-focused deals, BCG research has found an increasing number of investors see the sector not only for its positive impact on society, but also for its financial returns.
Investors would benefit from approaching social investments with the same drive as green ventures, the report says, calling investment in the diversity, equity and inclusion space the next “impact frontier”.
“The need for social impact investing has never been greater . . . institutional investors have the opportunity and the imperative to step up their funding and catalyse growth,” the report states.
When journalists write about other journalists, it often smacks of navel gazing — and is thus best avoided. However, this week I am breaking this rule since I have been struck by the intensifying debate inside the media about how to cover the climate crisis.
To cite one example: on Tuesday the World Editors Forum is holding its first virtual global climate conference to discuss “the gaps between what audiences need and want on climate change and what newsrooms are delivering right now.” This will discuss issues such as the role of storytelling and how to communicate technical data. Another debating point will be the decision by Canada’s Globe and Mail to release more than 180 files of its raw sources from an investigation into last summer’s extreme heat, reflecting a wider #ReadTheSources campaign from Unesco and the French group Outlet to make climate reporting more credible.
Can tactics such as these offset the crumbling levels of public trust in the media? What else can journalists (like us) do to communicate climate issues effectively? We would love to hear your views, given that Moral Money was established three years ago to illuminate green finance issues and ESG.
Meanwhile in today’s newsletter, we cover a striking data initiative in the fast-expanding world of hydrogen, a pandemic-era twist in philanthropy at Fidelity, new data about impact investing and alarming news about how rising sea levels threaten the US east coast. And if you want another sign of how sustainability issues are getting more media focus, check out the breaking story about how Carl Icahn, the corporate raider, has teamed up with animal welfare activists (which we will return to later this week.) Read on.
Gillian Tett
Hydrogen is hot
The hydrogen market is red hot today, or so many opportunistic investors would say. However, like many nascent areas of finance, it has hitherto operated with considerable opacity. Last autumn, one of the first efforts to create more price transparency and consistency emerged: Deutsche Börse’s power and gas exchange EEX announced plans to launch a new price index in 2022.
Now another initiative is under way to help the market become more credible: S&P Global Platts, a provider for benchmark prices in the commodities and energy markets, is joining forces with other industry players to create a so-called Open Hydrogen Initiative (OHI) — a platform to let investors and companies track carbon emissions from hydrogen.
It is easy to see why this is needed. Hydrogen has recently sparked great excitement in the renewable energy world since the fuel is light, storable, energy-dense, and appears to produce no direct emissions of pollutants or greenhouse gases, a key attracter for green investors, as a recent report from the International Energy Agency explains.
As a result, the sector is growing fast: in 2020, the space was estimated to be worth more than $187bn, but it is projected to reach $286bn by 2027, according to MarketWatch. Meanwhile, annual government funding for hydrogen has reached $16bn a year globally, up 40 per cent from July 2021, according to research group Bloomberg NEF.
However, thus far there have been relatively few ways for investors, companies or governments to track indirect emissions from the fuel in a consistent way. This matters given the pressure on companies (and asset managers) to measure all aspects of emissions emanating from corporate supply chains, under scope one, two and three reporting systems.
To tackle this, S&P Platts is working with GTI (the research education group) and the National Energy Technology Laboratory to build tools to track hydrogen greenhouse gas emissions at the production facility level. These will be free for investors and companies to use, and aim to establish benchmarks for the market. “What we know is that we need hydrogen. It is very versatile. But what we have not yet had is precise and consistent technical tools for measuring hydrogen’s carbon intensity,” said Paula Gant, senior vice-president of strategy and innovation at GTI. “And, we’re at a place where the market needs that to enable hydrogen’s rollout.”
The group hopes this will promote wider adoption of hydrogen. “We see hydrogen being a key part of the future of the energy market in the decades to come” Jonty Rushforth, S&P Global Platts senior director, told Moral Money.
However, technical challenges remain. Previous research from S&P Global Platts suggests the cost of producing hydrogen from renewables will need to fall by more than 50 per cent to be a viable alternative to traditional energy. Hydrogen faces big production challenges and is difficult to store and transport. (The Saudis, however, seem to have set their bet on the growing market.)
Establishing price and emissions indices could spark more research and development to tackle these issues; or so the group hopes. And the initiative incorporates another interesting twist that investors should watch: the group intends to include metrics that indicate how much confidence investors should have in the emissions data.
This reflects a growing recognition that “green” measurements can sometimes be more art than science. This should not stop investors or companies from trying to measure emissions; but a more realistic debate is needed about the limits of current tools. Call this, if you like, another sign that the green market is growing up.
(Kristen Talman and Gillian Tett)
Sustainability schism raises questions for the ISSB
People rarely log on to LinkedIn for a fight, but that’s what broke out on Friday when Bob Eccles, a visiting professor at Oxford university’s Saïd Business School, used the site to promote what he thought was “an innocuous little piece” in the Harvard Business Review.
In it, he and with Bhakti Mirchandani, managing director of responsible investing at Trinity Church Wall Street, argued that investors need uniform accounting standards for ESG, and that the new International Sustainability Standards Board (ISSB) could provide the global baseline from which companies and regulators could build.
Eccles’ post set some heads nodding and others spinning. “WTF Bob?!?” wrote Bill Baue, co-founder of the Sustainability Context Group, saying he was dangerously conflating ESG with sustainability and pushing incremental solutions that could not produce real change. Mark McElroy, director of the Center for Sustainable Organizations, accused Eccles of “appeasement”.
We won’t rehash the whole debate about single, double, dynamic and contextual materiality here, but it’s worth reading to understand a question hanging over the ISSB: is it an imperfect but necessary first step towards greater clarity and rigour, or a fudge that will perpetuate flaws in ESG while satisfying nobody?
Eccles has asked his “cantankerous critics” not to let the perfect be the enemy of the good. Meanwhile, Emmanuel Faber, the former Danone chief executive, has only just been named as the ISSB’s first chair. The intensity of feeling it has sparked suggests that his will not be an easy job.
(Andrew Edgecliffe-Johnson)
A look at pandemic-era philanthropy
Did the experience of Covid-19 make people feel more or less generous? The former — judging from the 2022 report from Fidelity Charitable, the philanthropic foundation that provides donor-advised fund (DAF) options for asset managers’ clients. Last year investors made a record $10.3bn in these DAF grants, 41 per cent more than in 2019, ie before the pandemic.
This is striking. What is also notable is that there was a sharp increase in the assets allocated to impact investments (that is, those made with ESG factors in mind), which jumped to $3bn in 2021, up 67 per cent on the previous year. Another thought-provoking twist is that two-thirds of these donations were made not in dollars, but non-cash assets (which are converted into cash when Fidelity Charity ultimately gives these to charities.) This included real estate. But another, newish, component, was cryptocurrencies. As I wrote this week, donations in digital assets (mostly bitcoin) rose twelvefold last year.
The pandemic-era philanthropy boom has happened alongside a wider trend of impact investment growth over the past decade. The number of impact investments annually has grown fivefold since 2011, according to research from PitchBook and BCG.
As private equity companies crowd into climate-focused deals, BCG research has found an increasing number of investors see the sector not only for its positive impact on society, but also for its financial returns.
Investors would benefit from approaching social investments with the same drive as green ventures, the report says, calling investment in the diversity, equity and inclusion space the next “impact frontier”.
“The need for social impact investing has never been greater . . . institutional investors have the opportunity and the imperative to step up their funding and catalyse growth,” the report states.
(Gillian Tett and Kristen Talman)
Smart read
If you have ever been tempted to buy your dream house on the coast of Florida, Maine or the Hamptons, you should first read this striking piece in The Conversation by Jianjun Yin, an associate professor at the University of Arizona. Drawing on data issued last week by the National Oceanic and Atmospheric Administration, he suggests that the US will see 10-12 inches of sea level rise in the next 30 years, on average. Has the mortgage market or insurance priced this in? Yin does not comment. But this is the question Moral Money readers need to ask; never mind the realtors selling those beach homes.
Recommended newsletters for you
Due Diligence — Top stories from the world of corporate finance. Sign up here
Energy Source — Essential energy news, analysis and insider intelligence. Sign up here
Source: Financial Times
Smart read
If you have ever been tempted to buy your dream house on the coast of Florida, Maine or the Hamptons, you should first read this striking piece in The Conversation by Jianjun Yin, an associate professor at the University of Arizona. Drawing on data issued last week by the National Oceanic and Atmospheric Administration, he suggests that the US will see 10-12 inches of sea level rise in the next 30 years, on average. Has the mortgage market or insurance priced this in? Yin does not comment. But this is the question Moral Money readers need to ask; never mind the realtors selling those beach homes.
Recommended newsletters for you
Due Diligence — Top stories from the world of corporate finance. Sign up here
Energy Source — Essential energy news, analysis and insider intelligence. Sign up here
Source: Financial Times
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