Featured Image

Telecoms Address Lead Hazards; US and China Discuss Climate; Plus More ESG News This Week


By FactSet StreetAccount  |  July 20, 2023

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.

Chart of the week: Large telecom share prices recover

US telecom company share prices slid last week (and since recovered somewhat) following a media report published 9-Jul highlighting the potential public health hazard posed by lead-sheathed cabling, left buried from old telephone networks. Industry group USTelecom published a statement and fact page defending against the report. Multiple analysts have downgraded AT&T, which is believed to have the most lead-clad cable outstanding. Verizon, Lumen, Frontier Communications, and Consolidated Communications also have exposure, with the smaller names seeing potentially more risk concentration. Verizon has begun testing for potential lead contamination from its cable networks.

This week, AT&T revealed that a relatively small amount of the company’s cable is lead-clad, leading to analyst estimates of up to $4.5B in expenses for the company. This would likely be spread over a 14-year period should complete removal be necessary. The analysts noted that through Tuesday, more than $15B (Figure 1) of market cap had been lost for both AT&T and Verizon, though share prices have regained a portion of recent losses in Wednesday's session following the details AT&T revealed. StreetAccount points out that this cost estimate does not include any potential for environmental mitigation expenses or health-related litigation.

Figure 1: Price indices for select US telecom companies


Source: FactSet, prices as of 10:40am

Thematic performance for the week

Thematic sectors higher on the week led by North American and European names. Alt fuels leading gains with Westport higher following establishment of 55-45 joint venture with Volvo to reduce long-haul emissions using Westport's HPDI fuel system tech. Aemetis also seeing gains after company was awarded the first CO2 sequestration characterization well permit issued by California.

European hydrogen trading higher on the week; AFC up on the renewal of its collaboration with Air Products for hydrogen supply in Germany. ITM Power also higher after being awarded a contract towards a 100 MW project, also in Germany, for long lead-time materials and components. JPMorgan anlayst remains cautious on EMEA hydrogen due to modest policy support; prefers ITM over Nel or Green Hydrogen Systems for near-term turnaround potential.

In the US, solar players are gaining ahead of upcoming earnings reports from Sunnova, Enphase, and First Solar. The latter was upgraded at Citi on Wednesday, citing lower polysilicon prices and subsequently lower panel pricing. Comes as a report from LevelTen Energy found Q1 US solar energy contract prices logged their first quarterly decline in more than three years as supply constraints eased. SunRun is reportedly a top solar pick at Morgan Stanley; analyst notes potential for a positive FY guidance revision reflecting gains in California market share.

APAC thematics performing poorly, mostly on regional weakness across mainland China, Hong Kong and South Korea. Australian lithium miners lower despite ASX firmness as sector continues to give back gains from previous week. IGO leading WTD losses; stock received a host of analyst downgrades after guiding an impairment of Forrestania and Cosmos assets in FY23.


Climate meetings between China and the US wrapped up without a major agreement. The meetings were seen as a precursor to COP28 discussions and were the first set of talks since China broke off climate discussions last year following Nancy Pelosi's visit to Taiwan. John Kerry met with China's VP and called for cooperation while also expressing concern for ongoing coal projects and methane leaks. Kerry also stated the US will not pay into a climate reparations fund. China President Xi said the country would pursue its own path on emissions reduction.

Elsewhere, the US is working with India to develop an energy transition investment platform while Japan, and UAE agreed to cooperate on climate following innovation partnership. The EU called for China, India, US to share burden of GHG emission cuts as its citizens begin to balk at costs of its own policies; EU emissions have fallen by a third since 1990 mainly due to less coal usage.

The WMO warned heatwaves are the new normal as temperatures hit 50C in parts of US and China with increasing heart attacks and deaths likely. Yesterday was the seventeenth consecutive day where average Earth temperature rose higher than any previously recorded levels.

Social & governance

A US Court of Appeals denied the FTC's appeal to block Microsoft's Activision acquisition; GOP lawmakers called on the agency to drop the opposition. The firms are considering giving up control of their cloud gaming unit to gain merger approval. Comes as the US FTC published guidelines on objectionable M&A deals.

United pilots reached a labor agreement, boosting pay in new four-year contract; the move prompted American Airlines to improve its labor deal for pilots ahead of union vote. US retail industry group urged the UPS to make a deal and avert a strike; Union head said they're prepared to continue talks. Hollywood actors joined the ongoing writers' strike; key areas of contention include compensation, use of AI, and health care and pension costs.

J&J must pay $18.8M to California man who says he developed cancer after using baby powder. The company joined fellow drug makers in suing the US government to block a program giving Medicare power to negotiate lower drug prices. Tesla directors agreed to return $735M to company, settling claims they were grossly overpaid; the settlement does not affect CEO Musk whose $56B pay is being challenged separately. BlackRock appointed Amin Nasser, CEO of oil giant Aramco, to its board. The move drew scrutiny given BlackRock’s historical commitment to responsible ESG-investing (a term CEO Fink recently denounced).


This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.


FactSet StreetAccount

With real-time, distilled market-moving information, FactSet StreetAccount gives you instant access to crucial intelligence for the companies and markets you care about.


The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.