FactSet StreetAccount publishes regular company-level and summary-style ESG news. Below is our recap of key ESG developments and insights over the past week.
Chinese EV makers are outperforming this week (Figure 1) with Xpeng up big on announcement of strategic cooperation with Volkswagen. VW will invest $700M to eventually hold a 5% stake; the companies plan to produce at least two new BEV models, with the first launching 2026. Chinese EV makers were also boosted after the Politburo meeting emphasized the need for greater auto demand. This followed a list of measures the Chinese government published on 21-Jul designed to support EV sales.
In contrast, share prices of China EV battery makers including CALB Group have treaded water in recent weeks despite this focus on EV demand from China's government (Figure 2). Comes alongside strong earnings results for CATL and expansion plans into Europe for Sunwoda Electronic. Elsewhere, EV value chain stocks have slid in South Korea with battery makers trading lower. LG Chem, LG Energy Solutions, and Samsung SDI fell on disappointing Q2 results. Volatility continues for battery "meme stocks" with Ecopro seeing sharp losses. Australian lithium miners have also fallen on disappointing production updates from Core Lithium and Allkem.
Figure 1: Price indices for select China EV manufacturers
Source: FactSet, prices as of 11:20am ET
Figure 2: Price indices for select China battery manufacturers
Source: FactSet, prices as of 11:20am ET
Thematic sectors mixed on the week, lagging broader markets. US solar names have declined on poor quarterly results and downbeat analyst commentary flagging concerns over slowing residential demand and uncertainty over NEM 3.0 in California. SunPower fell on a preliminary Q2 miss and sharply slashed FY guidance, noting weaker residential demand, resulting in multiple analyst downgrades. Sunnova slid on widening Q2 losses (stock also saw an analyst downgrade prior to reporting). Some analysts attribute recent underperformance to uncertainty over NEM 3.0 in California and weakness in solar originations nationwide, remaining cautious on US residential solar near-term on demand fundamentals.
In global news, a meeting of G20 nations in India last week failed to reach a deal on phasing down fossil fuels and tripling renewables as called for by COP28 President Al Jaber. Representatives could not reach a consensus on the use of carbon capture and storage over transitioning away from fossil fuels. A UN watchdog delayed permission for deep-sea mining to 2024, after a meeting of the Council of Int’l Seabed Authority ended without an agreement on how to regulate the industry.
The EU Council adopted a series of laws and regulations aimed at achieving climate goals. The energy efficiency directive aims to reduce energy consumption through 2030 across the bloc. Regulation mandating an increase in EV charging and hydrogen refueling stations and a maritime decarbonization initiative as part of Fit for 55 were also enacted. France became the first nation to adopt a Say on Climate rule that would require companies to publish climate plans for shareholder vote after the national assembly voted to adopt the proposal. Final debate will take place in October by joint committee. UK's quarterly greenhouse gas emissions fell for first time in two years on slower demand and increased renewables. Recent political developments called Britain’s green agenda into question after Conservatives won a parliamentary seat by attacking climate policies; however, the UK confirmed it will ban sale of new petrol and diesel cars from 2030.
In the US, the EPA and DOE will spend $1.55B working with companies to cut oil and gas sector methane emissions and initiated a task force on methane leaks. Lead-clad cables remain in the news as NY governor directed state agencies to investigate health risks, and media reports suggest the EPA and Dept. of Justice have taken up the matter. Canada to become first G20 country to meet 2009 pledge and phase out fossil fuel subsidies. Meanwhile, wildfires are set to double the country's carbon footprint this year.
The FTC is finalizing its long-awaited antitrust lawsuit against Amazon, which is expected as soon as August. The agency withdrew its efforts to block the Microsoft-Activision deal, however, after losing its case for a preliminary injunction. Meanwhile, EU antitrust regulators opened an investigation into Microsoft on the grounds of bundling Teams with Office to determine if the practice violates EU competition rules. The EU will also conduct a full-scale antitrust investigation of Adobe 's Figma acquisition.
Apple faces a $1 billion lawsuit in the UK over commissions on in-app payments. Discover Financial Services disclosed it is in discussions with regulators over misclassifying credit-card accounts. DWS is in talks with the SEC to resolve ESG investigation over alleged greenwashing. A group of 22 US states, led by California, moved to block 3M's $10.3B settlement over PFAS pollution, contending the settlement is insufficient to hold the conglomerate accountable.
UPS and Teamsters reached a labor agreement averting strike. Yellow avoided strike after it agreed to pay over $50M in owed benefits and is reportedly preparing for bankruptcy amid union negotiations. FedEx will mediate with pilots after new labor agreement was rejected. A Federal labor judge ruled Starbucks illegally fired a NYC supervisor over union activities. UAW sought support from Biden administration in labor talks with the Detroit Three; Democrats are bracing for a likely strike when UAW's contract ends in September.
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