ALBERTA

First Nations, Métis settlements join forces for deal backed by Indigenous Opportunities Corporation

PETRO POLITRICKS

The Alberta Indigenous Opportunities Corporation (AIOC) has expanded its reach into northern Alberta with oil and gas infrastructure assets.

The newly-formed Wapiscanis Waseskwan Nipiy (WWN) Limited Partnership comprises nine First Nations and three Métis settlements that are participating for the first time in a transaction backed by AIOC.

The $150 million loan guarantee, which is AIOC’s second largest commitment in its seven deals to date, was announced Dec. 13. It will allow WWN to acquire an 85 per cent non-operated working interest in Clearwater Infrastructure Limited Partnership for a purchase price of $146.2 million.

Clearwater is a partnership between WWN and Tamarack Valley Energy Ltd. Tamarack owns an interest in midstream assets, such as strategic oil batteries, gas process facilities and key in-field pipelines located in Nipisi, West Marten Hills, Marten Hills and Perryvale in Alberta.

According to law firm MLT Aitkens, which is representing WWN, this is the first time an AIOC transaction has been with an exploration and production company and the first time an AIOC transaction has been involved in the acquisition of a majority interest in infrastructure assets.

Tamarack says it will transfer $172 million of “certain Clearwater midstream assets” to the Clearwater partnership. Under the terms of the agreements, Tamarack has made a 16-year take-or-pay (TOP) commitment for average volumes of 29,000 barrels of oil per day.  TOP is a provision in a purchase contract that guarantees the seller a minimum portion of the agreed-on payment if the buyer does not follow through with buying the full amount.

The nine First Nations to form the partnership are Driftpile Cree, Peerless Trout, Kapawe’no, Sawridge, Sucker Creek, Swan River, Whitefish Lake 459, Loon River and Duncan’s, along with the Métis settlements of East Prairie, Peavine and Gift Lake.

Sucker Creek and Duncan’s First Nations were also included in a second AIOC deal announced in December. They joined with Sturgeon Lake and Horse Lake First Nations and Aseniwuch Winewak Nation of Canada to form the Niyanin Nations LP.

Niyanin Nations received a loan guarantee of about $20.5 million to partner as investors with NuVista Energy Ltd. in a 15-megawatt cogeneration unit at the Wembley Gas Plant in the County of Grande Prairie. The Niyanin and NuVista partnership will own a majority interest in the cogeneration project, which will generate electricity and useable heat.

Chana Martineau, CEO for AIOC, would not disclose the projected revenues for either deal, saying only that the “revenue needs to be meaningful for the communities.”

She also would not disclose whether the two new partnerships had the Indigenous nations sharing equally in the revenue.

With AIOC providing more than $680 million in loan guarantees directly impacting 42 Indigenous groups, Martineau says projected revenues for total projects are “north of $30 million” annually. However, she cautioned that there were a number of factors that go into projections.

“I’m thrilled for these new nations to join the AIOC family of supported communities. These ones (were) very special to me, especially after the wildfires in the spring in this region. To be able to support two deals in this sector is very, very important,” said Martineau.

Many of the communities that are part of the two deals declared local states of emergency during the spring wildfires and were impacted by evacuations, loss of homes and structures, and electricity.

That AIOC announced two loan guarantee deals within days of each other in December was coincidental, says Martineau, as negotiations can take anywhere from six months to a full year.

“We’ve got more deals in the funnel,” she added, but wouldn’t disclose how many deals or in what sectors. “These are similar to mergers and acquisitions type transactions (and) sometimes they fall apart at the last minute.”

Martineau, who joined the board in November 2021 before becoming CEO in July 2022, wouldn’t say how many potential deals have fallen apart, only that AIOC has been “pretty fortunate” to have committed partners on both sides of the table.

What helps the process, she adds, is that AIOC is involved from the beginning and able to “give our views about the credit worthiness of the transaction.”

As for money Indigenous nations may have lost on deals that didn’t come to fruition, Martineau notes that AIOC provides capacity grants for things like legal support, due diligence work and tax structuring so Indigenous nations can participate without a lot of upfront cash.

In 2023, three deals were closed. That’s the most in a single year since the AIOC was formed in 2019 to support Indigenous participation in natural resource projects. The Crown corporation was an election promise made by former United Conservative Party premier Jason Kenney.

Martineau says it took time to set up the AIOC infrastructure, including developing policies, procedures, and finance functions.

In February 2022, AIOC’s mandate was expanded to include projects and related infrastructure in the agricultural, transportation and telecommunications sectors. However, none of the projects supported to date include those new sectors.

Martineau says she is asking partners to be patient.

“When you're looking at investing in new sectors, you need to learn the sectors. You need to understand the corporate partners, you need to understand what the opportunities are, what the risks are… because (with) each deal, we're breaking new ground here. These are new types of partnerships,” she said.

“We need to look at and see ‘how do we do this in a way that works for all three parties—the corporate partner, the Indigenous partners and the government of Alberta loan guarantee’. It takes some, I'll call it corporate creativity, to come to the table in a way that makes sense for all three parties. It's not a cookie cutter approach.”

But more than time is needed, says Martineau. Personnel is also required, especially as AIOC’s loan guarantee capacity of $1 billion was doubled earlier this year and will rise to $3 billion as of 2024-2025.

“We've asked the government for some more resources. We don't know if that'll get approved,” said Martineau, noting that the 15 full-time employees AIOC currently has “will be just fully deployed coming up here in the next two months.”

The government’s new fiscal year with a new budget begins April 1.

Presently AIOC has a posting for a director of talent management, who will work on recruitment strategies. As well, experts have been contracted for short-term service.

“We can contract experts to help us, but we have a very small budget where we are very mindful of taxpayer dollars and so we try to do this as efficiently as we can. We've been measured in our growth,” said Martineau.

Martineau anticipates green energy development will come onto AIOC’s radar once the province lifts the moratorium imposed last August on approvals of projects in the sector. The Alberta Utilities Commission is expected to make recommendations in March on how to move forward.

Once more Martineau wouldn’t say if there are any existing applications for renewable energy projects on the books.

“We are looking to broaden our impact in in all ways, so different types of industries even and different types of energy projects… We have a lot of latitude.... We have sectors, but we have a broad reach across those sectors and so we'd like to help expand our scope. We are building out our team and our capacity in order to do that,” she said.

“We're supporting the industries that Indigenous communities are looking to invest in to the best that we can.”

Windspeaker.com

By Shari Narine, Local Journalism Initiative Reporter, Windspeaker.com, Windspeaker.com

Panama Canal drought forces Maersk to start using 'land bridge' for Oceania cargo


In an advisory to clients, Maersk informed shipping customers that vessels that use the Panama Canal will no longer be traversing the canal with freight from Oceania (Australia and New Zealand) because of the ongoing water situation.

The latest water level issues for the canal come as it is expected to receive additional vessel traffic as ocean carriers avoid the Red Sea due to the ongoing Houthi attack risk.

Forty percent of all U.S. container traffic travels through the Panama Canal every year, which in all, moves roughly $270 billion in cargo annually.


View of stranded boats at Alhajuela Lake during the summer drought, in Colon province, 50 km north of Panama City, Panama, on April 21, 2023. The Alhajuela lake is one of the main lakes that supplies water to the locks of the Panama Canal and is at its lowest level of recent years.© Provided by CNBC

The Panama Canal drought conditions have led shipping giant Maersk to inform clients this week that vessels with freight from Oceania (Australia and New Zealand) will no longer traverse the canal because of the ongoing low water levels. Maersk will be servicing the client's containers by using a "land bridge."

Instead of going through the Panama Canal, the vessels would call the Ports of Balboa, Panama, on the Pacific side — dropping off cargo heading for Latin America and North America and picking up cargo heading for Australia and New Zealand. The Port of Manzanillo, Panama, on the Atlantic side, will be used for dropping off cargo heading for Australia and New Zealand and picking up cargo heading for Latin and North America. Once at the port, containers would be loaded or unloaded and would then move via an existing rail over a distance of 80 kilometers across Panama to be picked up by another vessel. The change in service covers two transits per week, according to Maersk.

A severe drought has led to water depth and weight restrictions on ships passing through the Panama Canal, and additional container surcharges imposed by ocean carriers on shippers for months.

"Based on current and projected water levels in Gatun Lake, the Panama Canal Authority (ACP) has needed to make reductions to the amount and weight of vessels that can pass through the canal. Whilst we continue to work closely with the ACP, moderating and aligning our operations to fit the changes, we have made changes to services to ensure that our customers are impacted as minimally as possible," Maersk's client advisory stated.

Maersk emphasized there would be no delays for Northbound cargo stopping in Philadelphia and Charleston. Companies like McDonald's import their Wagyu Beef from Australia and use this route to import their beef into the East Coast.

For the Southbound vessels, Maersk cautioned customers may experience some delays.

The company is also eliminating the shipping route to Cartagena, Columbia.

The Panama Canal Authority has increased the number of transit slots to 24 daily this month after first announcing a reduction of vessel transits to 18 in February. But this is far below the daily transits of 36.

The Panama Canal is popular for East Coast trade because it is faster than other options. The shipping time for ocean cargo from Shenzhen, China, to Miami, Florida, using the Suez Canal takes 41 days. Traveling through the Panama Canal takes only 35 days. The latest water level issues for the canal come as it is expected to receive additional vessel traffic as ocean carriers avoid the Red Sea due to the ongoing Houthi attack risk, with Maersk among shippers that recently had to halt Red Sea traffic.

Forty percent of all U.S. container traffic travels through the Panama Canal every year, which in all, moves roughly $270 billion in cargo annually.

Late December to April is traditionally Panama's dry season.

According to the PCA, it takes around 50 million gallons of fresh water to move a vessel through one of the locks. The Panamax locks lose more water compared to the Neo-Panamax lock. The Neo-Panamax locks have a water recovery system which can reclaim 60% of the water used during a vessel's transit through the locks. The Panamax lanes do not have the water-recapturing ability of the Neo-Panamax locks.

Maersk stressed that as a whole it is not bypassing the Panama Canal, but its decision related to the Oceania freight will impact the declining cargo volume passing through the Panama Canal. In 2023, it was reported 510 million tons of cargo traversed the canal, which was eight million tons less than 2022. Even with the decrease in volumes, the Canal Authority reported record revenue from October 2022 to September 20, 2023. Surcharges and other charges added to cross the canal fueled the revenue increase. From October 1, 2022- September 30, 2023, the PCA received $3.3 billion. That was $319 million higher than a year earlier.

The Panama Canal Authority said its multimodal transportation system is a way that maritime customers, such as Maersk, and the PCA itself can cope with the impacts of climate variability worldwide and the current water shortage at the canal. "We will continue to support Maersk's operations. ... We are focused on delivering both short- and long-term solutions for our customers, for when climate anomalies affect our operations," it said in a statement to CNBC.


CNBC VIDEO
What the Panama Canal is doing to fight a severe drought challenge

Ukraine lists world's largest fast-food chain as sponsor of war

Story by Nataliia Direyeva • 

Photo: Fast-food franchise Subway (wikipedia.org)© RBC-Ukraine (CA)

Ukraine has included the American multinational fast-food franchise Subway in the list of international sponsors of the war. The company continues its business operations in Russia, according to the National Agency for the Prevention of Corruption (NAPC).

The Agency noted that over 500 Subway network restaurants (Subway AP LLC) continue to operate in the aggressor country, paying hundreds of thousands of dollars in taxes to the Russian budget.

"The Subway brand also actively advertises its activities through sanctioned Russian social networks and delivers food through 'Yandex' services, which cooperate with the state and law enforcement agencies of the aggressor country," the statement said.

NAPC highlighted that after the start of Russia's large-scale invasion of Ukraine, the company did not report any reduction in its activities in the aggressor country. There were also no attempts by Subway's management to condemn the Kremlin's war.

About the company

Subway is one of the world's largest fast-food restaurant chains.

According to Statista platform data, in 2023, this global quick-service restaurant brand had 36,592 stores worldwide. In other words, Subway had more restaurants worldwide in a year than any other network.

Subway's activities in Russia

The company has been operating in Russia for over 20 years, creating around 6,000 jobs and having 550 restaurants in 122 cities. The Russian Subway network is currently the third largest in Europe by the number of outlets, after the United Kingdom and Germany.


A distinctive feature of Subway's business is that it operates on a franchise system, meaning there is a large network of legally independent entities operating under the Subway brand, generating income, and paying taxes. In Russia, the Subway network franchise is owned by the company Subway Russia Service Company, headquartered in St. Petersburg.

"Subway stated that all restaurants in the country are independently owned and operated by local and master franchisees, so the restaurants remain open in Russia. This statement regarding the inability to influence its franchisees does not correspond to reality and is essentially misleading," noted NAPC.

War sponsors

NAPC is an organization that checks private companies for integrity, including whether they sponsor the war against Ukraine. Thus, during Russia's full-scale invasion, a list of International sponsors of war was created.

Companies that did not leave the Russian market, conduct business, and pay taxes in Russia, thereby financing the war, were included in this list. For example, the globally renowned Nestle corporation was included. It is one of the world's largest food product manufacturers.

It was also recently reported that Ukraine included the Viciunai Group in the list of international war sponsors. This company manufactures crab sticks under the Vici brand.

Second Wells Fargo branch employees vote in favor of a union
Story by Reuters •

FILE PHOTO: A Wells Fargo logo is seen in New York City, U.S.

 REUTERS/Stephanie Keith/File Photo© Thomson Reuters

NEW YORK (Reuters) - Wells Fargo employees at a branch in Daytona, Florida, voted in favor of joining a union on Thursday, making it the second branch at the bank to do so.

Last month employees at Wells Fargo's Albuquerque, New Mexico, branch voted to join the union. Elections at a branch in California are expected to be held later this month.

With the unionization effort at its branches, Wells Fargo, has become one of the first major U.S. lender to have a unionized workforce.

"We’re incredibly proud of the Daytona Beach Wells Fargo workers for joining their colleagues in Albuquerque in a successful union vote,” said Committee for Better Banks organizing director Nick Weiner.

The Daytona Beach employees voted 4-1 in favor of joining the Communications Workers of America's Wells Fargo Workers United (WFWU), the union said.

"Now with a true seat at the table, we look forward to negotiating improvements to staffing, workloads, pay inequities, and many other issues," said Corinne Jefferson, a personal banker at Wells Fargo’s Daytona Beach branch on International Speedway.

Some other employees at a branch in Bethel, Alaska, withdrew from the unionization effort last month.

Recent unionization campaigns across the U.S. have led to tense showdowns between employees and corporate behemoths. Lucrative deals clinched by unions such as the United Auto Workers, which secured record pay hikes for employees, have bolstered unionization efforts.

(Reporting by Nupur Anand in New York and Mrinmay Dey in Bengaluru; Editing by Leslie Adler)

BIDENOMICS

Wall Street little changed after inflation, labor market data

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 9, 2024. REUTERS/Brendan McDermid/File Photo© Thomson Reuters

By Chuck Mikolajczak

NEW YORK (Reuters) -U.S. stocks closed little changed on Thursday as news of hotter-than-expected inflation and signs of labor market strength dampened hopes for early interest rate cuts by the Federal Reserve this year, but a fall in Treasury yields kept declines in check.

In a choppy session, equities opened higher and the benchmark S&P 500 briefly surpassed its record closing high of 4,796.56, hit in January 2022, before erasing initial gains.

After ending 2023 with a strong rally, stocks have struggled to find upward momentum, with the S&P 500 up only 0.21% on the year, as mixed economic data and Fed officials' comments have led investors to scale back expectations for the timing and size of any rate cuts from the U.S. central bank this year.

The U.S. Labor Department reported that consumer prices rose more than expected in December, with Americans paying more for shelter and healthcare. A separate report showed the number of people filing new claims for unemployment benefits unexpectedly fell last week to 202,000.

"They're just understanding it for what it was. The thing that pushed it up was primarily shelter," said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina.

"Nobody believes that is going to be a persistent go-forward problem apart from inflation, so the thing that drove the 'hot print' was something that everybody's kind of discounting."

Comments from some Fed officials have pushed back on potential rate cuts. On Thursday, Cleveland Fed President Loretta Mester and Richmond Fed President Tom Barkin said consumer price data for December did little to assure them inflation is now on a steady track back to the central bank's 2% target, with more information needed before any decision to begin reducing rates.

At 4:11 p.m. the Dow Jones Industrial Average rose 15.29 points, or 0.04%, to 37,711.02. The S&P 500 lost 3.21 points, or 0.07%, at 4,780.24 and the Nasdaq Composite gained just 0.54 points, at 14,970.19.

A fall in Treasury yields helped keep losses for equities in check, after an auction of $21 billion in 30-year bonds was well received.

"People are still worried about supply in the Treasury market. ... Is there going to be sufficient demand to soak that all up? And especially at the long end, the real fear is at the long end and the auction today, it was just perfect," said Ladner.

Microsoft briefly overtook Apple as the world's most valuable company, after the iPhone maker's shares dropped nearly 4% since the year began due to concerns over falling demand. Microsoft's shares rose 0.49%, while Apple shed 0.32%.

Nearly all of the S&P 500's 11 major sectors declined, with only energy and technology in positive territory, up 0.16% and 0.44%, respectively.

Crypto stocks reversed early gains and tumbled, with names such as Coinbase off 6.7%, Bitfarms down 13.33% and Riot Platforms 15.82% lower. The U.S. securities regulator approved the first U.S.-listed exchange-traded funds (ETF) to track spot bitcoin late on Wednesday.

Citigroup fell 1.77% after a filing showed the lender booked about $3.8 billion in combined charges and reserves that will erode its fourth-quarter earnings, due to be reported on Friday.

Other banks including fell, with JPMorgan Chase, down 0.42%, Bank of America, down 1.33% and Wells Fargo off 0.08% ahead of their earnings reports on Friday.

Declining issues outnumbered advancers for a 1.3-to-1 ratio on the NYSE and a 1.8-to-1 ratio on the Nasdaq.

The S&P index recorded 40 new 52-week highs and one new low, while the Nasdaq recorded 109 new highs and 138 new lows.

Volume on U.S. exchanges was 11.41 billion shares, compared with the 12.27 billion average for the full session over the last 20 trading days.

(Reporting by Chuck Mikolajczak; Editing by Richard Chang)

Climate disclosures: corporations underprepared for tighter new standards, study of 100 companies reveals

THE CONVERSATION
Published: January 11, 2024 



Companies and the carbon emissions that they generate are one of the key drivers of anthropogenic climate change. Because of this, however, they also hold precious potential of curbing its severity. The 2021 Glasgow Pact stated that rigorous sustainability reporting standards that will push companies to disclose information about their impact on the environment as well as climate change’s impact on their operations are essential. For this reason, it supported the creation of the International Sustainability Standards Board (ISSB), a new branch of the International Financial Reporting Standards (IFRS) Foundation, which aims to develop a robust set of financial-related sustainability-reporting criteria.

In June 2023, the ISSB issued its first two standards, IFRS S1, General Requirements for Disclosure of Sustainability-Related Financial Information and IFRS S2, Climate-Related Disclosures. The second focuses solely on climate change-related issues, requiring companies to disclose information around four aspects of their activities: governance, strategy, risk management, and metrics and targets. The standard requires information about the company’s governance body responsible for oversight of climate-related risks and opportunities, as well as quantitative disclosures (in particular, greenhouse-gas emissions).

The standards have gained support from many global bodies, including the G7, the G20, the International Organization of Securities Commissions, and the Financial Stability Board. Although no country has yet adopted them, many are expected to endorse or require them in the near future. Countries such as the UK and Brazil are moving toward this direction. Also, the European Commission confirmed that climate-related disclosures of the European Sustainability Reporting Standards exhibit a high degree of alignment with second IFRS standard, and EU-based companies will have to adopt them in 2024.
Are companies ready for this transition?

At the end of March 2022, the ISSB issued drafts of the two standards. Our study explored the ex ante level of firms’ adherence with climate-related disclosures by capturing disclosure levels against those proposed as to be required by the draft IFRS S2 (known as ED IFRS S2). Our year of analysis was the financial year 2021, i.e., the year immediately prior to the publication of the draft. We purposely focused on 100 large international companies in sectors with high carbon emissions, comprising 50 from the chemicals and 50 from the construction materials sectors.




Due to their size, such companies are under increasing pressure from consumers, shareholders, regulators and NGOs to report on their climate-related risks and opportunities. To carry out our analysis, we built a research instrument based on the ED IFRS S2 and scored the firms’ publicly available reports, ranging from annual, sustainability to integrated reports.
Variations in reporting

Our findings indicate that, on average, the companies analysed disclose around 39% of the items they would be required to reveal under the ED IFRS S2. When we zoom into the four categories of the ED IFRS S2 “core content”, we find that companies engage much more with climate-related disclosures about their governance processes (around 60%) but much less with strategy and risk management disclosures (around 36% and 35%, respectively).

For metrics and targets, companies disclosed more of their climate-related targets than reporting their metrics (i.e., outcomes) with average levels around 67% and 35%, respectively. In other words, companies are found to be more vocal about their future plans (i.e., their future targets) than they are about their actual achievements so far (i.e., metrics). The moderate overall level of companies’ forecasted adherence with the draft standard does not allow us to draw a direct conclusion. Nevertheless, a closer look to the findings reveals some additional insights with important implications about the application of IFRS S2:

It draws heavily from the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. When we focus specifically on the “new” items (those not included in the 2017 TCFD recommendations), we find that the related average disclosure score drops to about 25%.


Many “new” items relate to the effects of climate-related risks and opportunities on financial statements. Our evidence indicates that climate-related disclosures appear disconnected from the financial statements. This is consistent with our previous studies on companies from the extractives sector that report very low levels of engagement with climate-related financial disclosures in their financial statements. For example, whether climate change affects companies’ accounting policies, their financial performance, and their cash flows.


Companies use various locations to disclose their climate-related information with limited cross-referencing between their various reports. On average, 50% of the items disclosed are found in the annual reports, about 25% are found in sustainability reports only, and around 15% in other reports only (e.g., CDP response). The absence of cross-referencing potentially hinders the connectivity (and hence the usefulness) of the disclosures scattered among different reports.


About 50% of the companies have, at least, some parts of their climate-related disclosures assured by a third party. The assurance refers primarily to the metrics disclosed and to a much lower extent to the narratives.
More challenges ahead

This fast-changing corporate reporting landscape brings new challenges for companies, regulators, standard setters, and users:

Having contrasted the suggested requirements in the ED IFRS S2 and in the final version of IFRS S2, we note few differences that, however, do not alter the requirements in substance. If anything, IFRS S2 is more prescriptive and thus more “demanding” for companies.


Future disclosure. Based on forecasted disclosure levels, companies face considerable changes to their reporting when the two standards are adopted, or made mandatory, at a country level.


New standards on the horizon. The ISSB is considering a number of other sustainability-related topics such as biodiversity, ecosystems and ecosystem services; human capital; and human rights for its future standards. There is still a long way ahead for the ISSB to cover such a multidimensional topic satisfactorily. At the same time, companies may find it particularly challenging to collect all the necessary information for adequately disclosing their sustainability-related activities/impact when the full set of IFRS sustainability standards is completed.


Materiality. According to IFRS S1, companies shall disclose sustainability disclosures that have financial implications for them and their financial capital providers. Nevertheless, the magnitude of various climate-related risks (especially the physical ones) companies, potentially, face inherently cannot easily be reliably measured. Hence, the reliability of these disclosures may be questioned.


Audit and assurance. Neither IFRS S1 nor S2 requires assurance of disclosures, although they recommend verification for some items (such as the volume of direct and indirect greenhouse gas emissions). Nevertheless, companies are required to disclose material sustainability-related financial information which is likely to be subject to the audit process. It is unclear how the audit of this extra financially material information will be performed.


Integrated reporting. The intention of ISSB is to integrate financial and sustainability reporting, following the Integrated Reporting Framework. However, very few companies engage with disclosures directly connected to their financial statements. Without change in reporting, the ISSB’s purpose to provide integrated sustainability-related financial reporting standards may be undermined.


Standards competition. Although the ISSB has received support from many jurisdictions, other countries (namely the EU block and the US) are working on separate projects (e.g., European Sustainability Reporting Standards). While the current “polyphony” helps to improve the quality of sustainability reporting standards, companies may find themselves being subject to multiple reporting requirements. Moreover, users may find it difficult to compare companies’ performance that report against different Standards. Without global comparability, sustainability reporting may fail its very purpose.

Authors

Diogenis Baboukardos
Associate professor in accounting, management control and economics, Audencia

Evangelos Seretis
Lecturer in accounting, University of Glasgow

Fanis Tsoligkas
Associate professor in management, accounting, finance & law, University of Bath

Ioannis Tsalavoutas
Professor in accounting and finance, University of Glasgow

Richard Slack
Professor of accounting, Durham University

Disclosure statement

Our research project was funded by the Association of Chartered Certified Accountants in the UK.

Our research project was funded by the Association of Chartered Certified Accountants in the UK

Our research project was funded by the Association of Chartered Certified Accountants in the UK

Ioannis Tsalavoutas does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.


Durham University provides funding as a founding partner of The Conversation UK.

University of Glasgow and University of Bath provide funding as members of The Conversation UK.

Audencia provides funding as a member of The Conversation FR.



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2023 was the hottest year in history — and Canada is warming faster than anywhere else on earth

Story by Gordon McBean, Professor Emeritus, Department of Geography and Environment, Western University  

In 2015, most countries, including Canada, signed on to the Paris Climate Agreement which set the objective of “holding the increase in global average temperature to well below 2 C above pre-industrial levels and pursuing the limit of 1.5 C to significantly reduce the risks and impacts of climate change.”

Read more: Temperature records shattered across the world as tourists flock to experience the heat

On Jan. 9, 2024, the European Union’s Copernicus Climate Change Service (CCCS) announced that their analysis confirmed that 2023 was the hottest year on record since 1850, when humans began burning fossil fuels at a major scale. The global average temperature was 1.48 C warmer than pre-industrial levels and much warmer (0.17 C) than 2016, the previous warmest year.

The map of surface air temperature anomalies around the globe, compared to the 1991–2020 average, shows large geographical variations and that some of the warmest areas are in Canada.

A figure depicting global surface temperature anomalies in 2023.© (C3S/ECMWF)

Rising temperatures

Leading scientists are predicting that 2024 will be even warmer as the global mean temperature continues to rise.

These rising temperatures are leading to more extreme weather events that impact societies around the world and across Canada. The atmospheric concentrations of carbon dioxide and methane have continued to increase and reached record levels in 2023, reaching 419 parts-per-million (ppm) of carbon dioxide concentrations, which was 2.4 ppm higher than in 2022.

Read more: How 2023's record heat worsened droughts, floods and bushfires around the world

The CCCS also noted that, in 2023, many extreme events were recorded across the globe, including heat waves, floods, droughts and wildfires.

On Jan. 10, the World Economic Forum published its 2024 Global Risks Report, ranking global risks by severity over the next ten years. Extreme weather events are ranked to be the highest risk, leading to loss of human life, damage to ecosystems, destruction of property and/or financial loss.

Canada’s unique climate

Climate warming is not uniform due to a range of factors, including internal climate variability and regional variations in climate feedback and heat uptake.

In general, warming has been strongest at high northern latitudes and stronger over land than oceans. Global average temperature is greatly influenced by the oceans, which cover about 70 per cent of the planet and have large heat capacity, so they warm much slower than land areas.

Since Canada has a large land mass, much of which is located at high northern latitudes, warming across Canada has been about twice the global average and in the Canadian Arctic, the warming has been about three times higher. Loss of snow and sea ice reduces the reflectivity of the surface, resulting in stronger warming of ecosystems and increased absorption of solar radiation.

Read more: How Canadian courts are taking on climate change

Surface temperatures are highly linked to the temperatures in the troposphere, which is the lowest layer of Earth’s atmosphere.

The troposphere includes most of the clouds and weather and varies from 18–20 kilometres in depth at the equator to about six kilometres near the poles. This smaller depth in the Arctic can result in more warming due to the heat energy from solar radiation or other processes.

Feedback processes

Enhanced warming for Canada as a whole, and for the Canadian Arctic in particular, is part of a climate phenomenon known as “Arctic amplification.” The climate response to radiative forcing from greenhouse gases is determined by subsequent processes and feedback within the climate system. Climate feedback in the Arctic enhance the warming from greenhouse gas forcing.

A figure showing historical observations of annual mean surface temperature with Canada and the Canadian Arctic well above the global average.© (Environment Canada Climate Research Division)

Feedback mechanisms make different contributions to warming, depending on the region of the world. Snow and ice reflect considerable solar energy back to space. When warming melts snow and ice, this causes the now-darker surface to absorb more solar radiation and heat.

Another issue is that atmospheric components radiate energy back to space, cooling the climate somewhat, but in the Arctic, this cooling effect is weaker and there is a relatively larger warming response at higher latitudes. Another factor is that in the Arctic, the increase in clouds enhances warming by trapping heat near the surface.

Urgent action is needed

The enhanced rates of warming over Canada and the Canadian Arctic are due to a unique combination of feedback mechanisms.

The year 2023 demonstrated the devastating impacts of the climate extremes that can and will occur in even the best case 1.5 C climate scenario hoped for by the Paris Agreement.

Canada, and particularly our north, will warm much faster than the global mean. This reality should have the effect of motivating governments at all levels — and citizens — to reduce the historic complacency displayed by most governments around the world.

The time is overdue to take comprehensive and strong actions to reduce greenhouse gas emissions and to fully implement adaptation actions to make our societies and citizens less vulnerable and more resilient.

Through enabling communities across Canada to proactively advance climate resilience we can effectively reduce the risk of adverse climate impacts and prevent losses and damages during the extremes that a warming climate will bring.

This article is republished from The Conversation, >, a nonprofit, independent news organization bringing you facts and analysis to help you make sense of our complex world.

Read more:

• Small-scale solar has key benefits, and one critical weakness, over large solar farms

Gordon McBean does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Panamanian commission visits copper mine shut down after court invalidated concession

PANAMA CITY (AP) — Panama’s government on Thursday inspected a huge copper mine shut down after the country’s Supreme Court ruled in November that the government’s concession with a Canadian mining company was unconstitutional. The deal had triggered widespread street protests.

The administration of President Laurentino Cortizo has promised to carry out an orderly closure of First Quantum Minerals’ mine.

The process will take years if carried out in a way to avoid environmental impacts, according to the company, the government and outside experts.

The mine’s closure meant the loss of thousands of jobs. A small staff has remained to maintain the sprawling property.

Last March, Panama’s legislature approved an agreement with First Quantum allowing local subsidiary Cobre Panama to continue operating the copper mine for at least 20 more years. The open-pit mine was temporarily closed in 2022 when talks between the government and First Quantum broke down over payments the government wanted.

The new contract also included the possibility of extending the concession for another 20 years.

The deal set off weeks of protests. The protesters, a broad coalition of Panamanians, feared the mine’s impact on nature and especially on the water supply.

First Quantum has requested arbitration block Panama’s decision or obtain damages.

On Wednesday, Cobre Panama said in a statement that “the abrupt halt to operations before the useful life of the mine is unusual, so additional planning and preparation are needed.”

It said that at the government’s request it will present a preliminary “safe preservation and management” plan Tuesday with an eye toward the mine’s permanent closure.

An intergovernmental commission representing various agencies visited the mine Thursday. The government also invited representatives of some civil society groups. Last week, a team from the Attorney General’s Office visited as part of an investigation into complaints about possible environmental violations.

The Associated Press

Sunoco to sell 204 stores to 7-Eleven for $1.0 billion

Story by Reuters  • 

Trading information for Sunoco is displayed on a screen where the stock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. REUTERS/Brendan McDermid/File Photo© Thomson Reuters

(Reuters) -Motor fuels distributor Sunoco LP said on Thursday it has agreed to sell 204 convenience stores in West Texas, New Mexico and Oklahoma to 7-Eleven Inc for about $1.0 billion.

Sunoco said the proceeds from the sale will allow them to materially reduce leverage and help them with future growth.

The Dallas-based company also announced it will acquire liquid fuels terminals in Amsterdam in the Netherlands and Bantry Bay in Ireland from Zenith Energy. Sunoco did not provide a transaction value was for the deal.

Sunoco's liquid fuels acquisition, which is expected to close in the first quarter of 2024, will provide supply optimization for the company's existing East Coast business.

(Reporting by Tanay Dhumal in Bengaluru; Editing by Krishna Chandra Eluri)

CRIMINAL CAPITALI$M

Boeing Supplier Involved With Alaska Airlines Mishap Under Fire

Story by Rich Thomaselli  • 

Alaska Airlines' Boeing 737-9 MAX.© Alaska Airlines Media

The airline parts company that made the door plugs that are the subject of the investigation of the Alaska Airlines plane in which a side panel was blown out, was sued previously.

Spirit AeroSystems, which is not affiliated with Spirit Airlines, was at the center of a class action lawsuit claiming that the company was manufacturing sub-par parts.

The lawsuit was filed in May of 2023 and amended in December.

The incident happened last week when a side panel blew off a Boeing 737 Max 9 plane midflight. The pilot was able to make an emergency landing despite the gaping hole in the aircraft, and no injuries were reported.

The Federal Aviation Administration has since grounded the impacted MAX 9 planes, which are primarily used by Alaska Airlines and United Airlines in this country.

The lawsuit was filed on behalf of investors in Spirit AeroSystems.

Both Alaska and United have said they have since found loose door bolts on some of the jets they have in their possession.

The previous lawsuit could be a damning piece of evidence, especially an email from a former employee to management claiming an "excessive amount of defects." None of the claims in the email specifically touched on the door bolts but said that Spirit AeroSystem's "quality failures were so severe and persistent that Boeing even placed Spirit on probation for multiple years."

In a statement, Spirit said it "strongly disagrees with the assertions made by plaintiffs in the amended complaint and intends to vigorously defend against the claims. Spirit will not comment further as to the pending litigation."

The lawsuit alleges that “such constant quality failures resulted partly from Spirit's culture which prioritized production numbers and short-term financial outcomes over product quality."

Indigo lays off staff as part of strategic plan, does not specify number of cuts

© Provided by The Canadian Press

TORONTO — Indigo Books & Music Inc. has laid off an unspecified number of staff as part of the retailer's ongoing efforts to streamline its operations.

Indigo spokeswoman Melissa Perri says in an email to The Canadian Press that the cuts stem from the company's strategic plan meant to return the business to profitability.

Indigo has seen several quarters of losses and a flurry of executive and board changes over the last year.

Most recently, the company reported a net loss of $22.4 million in its second quarter, a period when founder and chief executive Heather Reisman retired and turned the business over to Peter Ruis.

Ruis left the company abruptly in September, making way for Reisman to return.

Last year, the company also grappled with a February cyberattack that took down Indigo's website and saw four of its 10 directors leave its board, with one attributing her resignation to mistreatment.

"While it is a difficult decision to part ways with valued and talented employees, it is the right decision for our company and all those we serve," Perri said in an email confirming this week's layoffs.

This report by The Canadian Press was first published Jan. 11, 2024.

Companies in this story: (TSX:IDG)

The Canadian Press

Google axes hundreds as AI replaces employees 


(Getty Images)© RBC-Ukraine (CA)

Alphabet, Google's parent company, is undergoing organizational changes, involving layoffs across various teams, including digital assistant, hardware, and engineering departments. The tech giant aims to cut costs by reducing its workforce, according to Reuters and Bloomberg.

Specifically, Google is cutting jobs in its Voice Assistant unit, the hardware team responsible for Pixel, Nest, and Fitbit, and the augmented reality (AR) team. The majority of the layoffs are expected in the AR team. Additionally, roles in the central engineering team, as well as unspecified positions in other areas, are also being impacted.

The decision to let go of employees follows Google's acquisition of Fitbit for $2.1 billion in 2021. Despite this acquisition, Google has continued to develop and release new versions of its Pixel Watch, directly competing with Fitbit's devices and the Apple Watch.

A Google spokesperson says that the organizational changes, which include role eliminations, are part of an ongoing effort to enha
nce efficiency. “Throughout the second half of 2023, a number of our teams made changes to become more efficient and work better, and to align their resources to their biggest product priorities,” he said.

Related video: Google Announces Major Layoffs Across Voice Assistant and Hardware Teams, Including Fitbit (Benzinga)

The spokesperson did not disclose the exact number of jobs affected, and it remains unclear how many employees are part of the Google Assistant software and other teams facing restructuring.

AI replaces work labor

This move comes amid a broader trend in the tech industry, where companies like Microsoft and Google are increasingly investing in generative artificial intelligence (AI) technology. Google had previously announced plans to incorporate generative AI capabilities into its virtual assistant to improve functionalities such as trip planning and email management.

In January 2023, Alphabet revealed plans to cut 12,000 jobs, constituting approximately 6% of its global workforce. As of September 2023, Alphabet had a total of 182,381 employees worldwide.

Google also aims to implement AI to boost its search capacities. The technology is called Search Generative Experience (SGE), and it is expected to revolutionize how users search for information.