NYC Climate Week, TNFD Nature Disclosure Recommendations, Plus More ESG News

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

Chart of the Week: Prices for Lithium and Associated Producers Fall Amidst Demand Concern, Supply Discoveries

Lithium miners are seeing sharp declines this week as spot prices continue to slide from their late-2022 peak (brown line in figures below) on concerns of waning EV demand in China. Pilbara Minerals (Figure 2, blue line) and Core Lithium are among the most shorted stocks on the ASX, highlighting investor outlook. IGO Limited (Figure 1, orange line) seeing declines following a downgrade at Morgan Stanley, while Goldman Sachs expects stock to fare better than peers as lithium prices decline. Lithium Americas (Figure 1, green line) is trading lower following a surge last week on the discovery of what could be the world's largest lithium deposit, feeding into lithium price considerations. ExxonMobil (XOM) is evaluating the extraction of lithium from fracking wastewater as it explores an entry into the transition materials market.

Figure 1: Lithium carbonate prices along with select lithium producer share price indices

Source: Investing.com (lithium prices), FactSet as of 11:30 am ET

Figure 2: Lithium carbonate prices along with Pilbara share price

Source: Investing.com (lithium prices), FactSet as of 11:30 am ET

Thematic Performance for the Week

Thematic sectors lower on the week with transition materials stocks Core Lithium, Lithium Americas, and Livent among losers. EVs trading lower led by HK-listed stocks Xpeng and Nio. In contrast, Chinese renewables pureplays and battery makers broadly outperforming US counterparts. Diversified renewables and cybersecurity stocks seeing relative outperformance. Top performers this week included hydrogen names Nikola (new leadership) and First Hydrogen. In regulatory news, the SEC adopted an amended rule requiring 80% of a fund's portfolio to match its name in effort to mitigate greenwashing.

EV makers also sliding this week; Chinese stocks leading declines as EU's von der Leyen voiced support for investigation into Chinese EV subsidies. An EU official, however, said bloc is "very far" from imposing new tariffs. Separately, France published eligibility rules for EV incentives excluding most China-made cars. Nio saw sharp losses after announcing convertible debt offering, though it successfully raised $1B. Reports focused on Xpeng’s wide price target gaps, highlighting mixed outlooks for China's EV sector amid price cuts and economic uncertainty.

US renewables lagging European and Chinese rivals this week despite some positive analyst takeaways following RE+ conference. Goldman Sachs noted signs of pipeline demand strength in utility scale solar. Northland sees UFLPA as main constraint for US module imports though notes signs of easing. Roth sees negative growth in US residential solar bottoming out in 1Q24. Enphase among minority of solar names higher WTD after director disclosed purchase of over $4M in shares; company noted increased deployments in Australia.

Environment

Climate Week 2023 in New York City gathered industry leaders and politicians to discuss aid to developing countries and renewable energy ramp-up, amid other environmental issues. Biden warned international leaders to drastically lower fossil fuel emissions. UN Secretary met with heads of state and business leaders at Climate Ambition Summit, excluding the US, China, and COP28 host UAE. Sixty-seven nations signed the High Seas Treaty to conserve marine biodiversity; treaty now faces ratification process. Elsewhere, the Taskforce on Nature-related Financial Disclosures published final recommendations on corporate reporting of nature-related risks. Group is asking companies to adopt standards like prior TCFD reporting on climate; GSK cited as an early adopter.

The US Treasury Department released voluntary principles for net-zero financing commitments for banks and asset managers. White House launched American Climate Corp to train 20k young people for green jobs; also announced $4.6B available for state and local climate plans. CA Governor to sign company climate disclosure into law. EU to ban unfounded product environmental claims such as “climate neutral” by 2026. In the UK, PM Sunak announced five-year delay in planned 2030 petrol and diesel car ban. Automakers warned delay will slow EV transition.

Social & Governance

Industrial labor action continues: US auto workers launched simultaneous strikes at selected GM, Ford, and Stellantis plants after failure to reach a labor agreement; possibility of strikes expanding on Friday grew after Stellantis’s latest offer lacked job security guarantee. An additional 2K workers were laid off between GM and Stellantis due to strikes. Hollywood studios and WGA near agreement to end strike after meeting in person on Wednesday. Chevron Australia agreed to accept commission’s recommendations to end union dispute with LNG workers. Hyundai Motor increased wages for South Korean workers 12%, averting labor action.

Attention on cybersecurity this week after high-profile breaches at Shell and casinos. Shell says it was victim of a cybersecurity breach in Australia BG Group as part of MOVEit hack, wherein personal information was accessed. Scattered Spider hacker group claimed it stole six terabytes of data from MGM and Caesars.

Regulatory actions: Rep. lawmakers asked Tesla to detail its relationship with Chinese battery maker CATL amid concerns of subsidies flowing overseas; regulators also investigating personal benefits provided to CEO Elon Musk by Tesla going back to 2017. China sanctioned Northrop Grumman and Lockheed Martin for arms sales to Taiwan. The UK published AI principles, emphasizing the need for transparency and accountability, and passed the Online Safety Bill aimed at tackling harmful social media content.  

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