California Lawmakers Pass Carbon Disclosure Bill, EU to Investigate China EV Imports, Plus More ESG News This Week

FactSet StreetAccount publishes regular company-level and summary-style ESG news. Below is our recap of key ESG headlines over the past week.

Charts of the Week: China Automaker Shares Lower on EU Investigation Announcement

APAC EV and battery makers underperforming global rivals following Wednesday’s announcement of an EU investigation into flood of China EV imports which Beijing criticized as "blatantly protectionist.” Pictured in Figure 1, BYD (white dotted line), Xpeng (light green dotted line) and Nio (purple dotted line) were among China EV makers lower following the announcement. German OEMs with high exposure to China also slid; Figure 2 shows Porsche (red line), which counts China as its largest market, led losses. Meanwhile, Tesla shares (Figure 3, white line) gained on Wednesday as US automakers have generally risen this week.

Figure 1: MTD price indices for select China carmakers

Source: FactSet as of 11:30 am ET

Figure 2: MTD price indices for select Europe carmakers

Source: FactSet as of 11:30 am ET

Figure 3: MTD price indices for select US carmakers

Source: FactSet as of 11:30 am ET

Thematic Performance for the Week

Thematic sectors mixed on the week. Even ahead of Europe investigation, analysts had remained cautious on China’s EV market. Chinese battery materials and equipment downgraded at JPMorgan as reduced NEV sales and battery demand in in China could cause shipments to slow.  

European wind names trading higher after EU said it will support the struggling industry with package of streamlined permitting, supply chain help, and training. Announcement comes as developers call for easing of US subsidy requirements, warning rising costs put offshore projects at risk. In the UK, an offshore wind auction failed to garner bids; developers argued maximum prices were set too low for projects to be economically viable. Orsted moving higher following sharp losses earlier this month on potential impairment to its US portfolio. The wind giant completed its purchase of a 175K acre offshore lease area off Massachusetts coast from Eversource Energy and entered its first UK solar project this week. Vestas also higher after receiving analysts upgrades, due in part to EU support package and upcoming US orders. Nordex up on a 141 MW order from BayWa r.e. for the supply and installation of turbines in Spain.

Alt fuels and hydrogen higher WTD. In Europe, Neste saw an analyst upgrade after company raised its Q3 outlook on improving European oil markets, despite an expected slowdown at its new Singapore line. In the US, Aemetis received a permit for a 90M gallon/year SAF and renewable diesel plant in California while FuelCell Energy is leading hydrogen losses this week on disappointing Q3 earnings.

Environment

G20 meetings brought an agreement to phase down coal power and triple renewable energy capacity by 2030. Climate change activists criticized meeting for not setting a timeline for ending fossil fuels. India announced a global biofuel alliance including US and Brazil to support trade in plant and animal waste. The IEA expects demand for fossil fuels to peak before 2030. The SBTi announced a major transformation plan to address conflict of interest concerns and keep up with demand for carbon pledge certifications.

In the US, CA lawmakers passed the most extensive emission disclosure guidelines for large corporations in the country. Sponsors say the bill, if signed by Governor Newsom, would be more legally durable than pending SEC disclosure rules. An EPA report projected the IRA will reduce climate emissions by 43% by 2030. The law led to a push for private investment in solar panels, hydrogen, and EVs, but wind installations have lagged. The EPA also launched $100M in grants to boost recycling. Amazon to purchase 250K tons of CO₂ removal credits over the next decade.

In Europe, EU lawmakers altered their renewable pledge for 2030 to 42.5% from 32%; approved a law requiring airports to use 70% green jet fuel by 2050; and are pursuing stricter air pollution limits. In the UK, PM Sunak announced $2B contribution to the Green Climate Fund.

Social & Governance

UAW rejected latest offers from F, GM, and Stellantis and outlined plans for a series of strikes to begin when current contract expires 14-Sept. A strike could create political challenge for Biden; Japanese part makers are concerned over potential impact. Chevon Australia LNG workers started short strikes on Friday, 8-Sept. Chevron applied to Australia’s Fair Work Commission for “intractable bargaining” declaration to end strikes and permit an industrial umpire to dictate agreement; union opposed application.

Adobe, IBM, and Nvidia were latest firms to join voluntary US scheme to manage AI risks. US Senate held hearings on potential avenues for regulating AI; representatives from Tesla, Meta, and Alphabet attended. Hearing followed release of bipartisan framework for regulating AI that would hold firms legally liable for harm. Tesla CEO Musk called for an AI “referee.” Trial began in Google antitrust action; Justice Dept. alleged Google paid over $10B/year to ensure its search dominance.

BP CEO Bernard Looney resigned as CEO after failure to fully disclose past relationships with colleagues. Interim CEO Auchincloss signaled he will stay course on energy transition plans, though reports suggest he will not take on role permanently.

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