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.
Thematic sectors higher on the week, largely outperforming the broader market. EVs ahead led by Tesla on demand tailwinds following price cuts; yesterday the company's Q4 earnings beat though margins missed. Analysts keyed in on Musk's statement that demand was strong enough to deliver 2M vehicles in 2023, depending on supply constraints. EV infrastructure, transition materials, and energy storage also higher.
Lithium miners have seen upgrades across several brokers so far this week while Albemarle called for lithium prices to remain high, enabling miners to develop new sources.
Solar underperformed led by US residential names including Sunrun, Enphase Energy, Sunnova Energy; analysts revise outlook lower on higher financing costs and a withdrawal of CA incentives. European renewables are mixed on the week as high material costs spur downgrades.
In Europe, Germany and France pushed for large renewable investments to keep up with US and China while Germany also unveiled its offshore wind expansion blueprint. Despite the efforts, an environmental group sued the German government over the failure to meet its climate targets and an industry watchdog called for France to study impact of global warming on nuclear plants. Four EU nations called for zero emissions targets for heavy duty trucks and buses and an EU committee voted down a bill to increase bank capital requirements on fossil fuel loans. Temperatures in the Greenland ice sheet reached their warmest in at least 1,000 years.
In the US, research found the US EV transition alone will require 3x the existing lithium supply unless car owning habits change. John Kerry's Energy Transition Scheme (using carbon offset proceeds to fund developing nation transition) is expected to launch at COP28.
Elsewhere, the WTO Chief called for global carbon pricing to help countries streamline supply chains and mitigate competition concerns. GFANZ disputed a recent report suggesting only 7% of banks' financing in the last six years went to renewables. Colombia announced a halt on new oil and gas exploration in push for greener energy, while in Japan, a study suggests its hydrogen plan lacks focus on green hydrogen production, instead prioritizing grey and blue.
Workers' rights in focus as Chinese migrant workers face crackdown by local governments for "malicious" strikes over unpaid wages. 300 Amazon UK staff strike over pay for first time. Telefonica raises Spanish workers' wages by 7.8% in 2023. U.S. union membership rate falls to an all-time low despite organizing efforts. Starbucks could be forced to bargain with workers who rejected union.
In this week's governance news, Google to face new Department of Justice lawsuit for alleged dominance in digital advertising market. Senators express concern with Ticketmaster's merger with Live Nation; smaller competitors call for unwinding. Federal Reserve probing whether Goldman Sachs' consumer business had appropriate safeguards. UK energy firms to be investigated by regulator following sharp rise in prepayment meter installations. EU to vote on tighter regulations for banks on ESG-linked remuneration, crypto. Federal Court finds Tyson polluted Illinois River; has until 17-Mar to present an agreement to remedy pollution.
Following earlier price cuts in APAC, Tesla cut prices for its EVs in the US on 13-Jan-22. Company enjoys largest profit margins per vehicle in the business due to large investment in design and equipment. Since US price cut announcement, Tesla (TSLA, blue) has dramatically outperformed the KranesShares Electric Vehicles & Future Mobility Index ETF (KARS-US, gray) and most car companies. Shares moved higher again today (26-Jan) following Q4 earnings.
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