Volkswagen to be sued by $850 billion Norway oil fund over emissions scandal
Norway’s $850 billion wealth fund will seek to join a class action suit in Germany against Volkswagen following revelations the carmaker rigged the exhaust systems of 11 million diesel-powered cars worldwide to pass official emissions tests. Norges Bank Investment Management “intends to join a legal action against Volkswagen arising out of that the company provided incorrect emissions data,” said Marthe Skaar, fund spokeswoman. The fund, which according to data compiled by Bloomberg owns 1.64 percent in Volkswagen, said it is acting “to safeguard” its holding in the carmaker. “It’s the board’s responsibility to ensure accurate and timely information is disclosed to the shareholders,” Skaar said. “Volkswagen informed the public about the incorrect emissions data after US authorities released a notice of violation letter.” (Independent)
Elon Musk apologises for Tesla workers paid just $5 an hour by subcontractor
Tesla relied on cheap foreign labour to build a hi-tech paint shop in California, paying workers as little as $5 an hour, according to a damning report that prompted CEO Elon Musk to launch an investigation. The electric car company used roughly 140 workers from Eastern Europe to build a paint shop in Fremont, California. Workers hired by subcontractor Eisenmann received hourly wages as low as $5, which is a fraction of the prevailing wages for local sheet metal workers – $52 an hour plus $42 an hour in benefits and pensions. The report told the story of Gregor Lesnik, a Slovenian electrician who allegedly suffered multiple injuries on the job after falling three stories from a roof. Tesla issued a lengthy response saying: “We are taking action to address [Lesnik’s] situation and to put in place additional oversight to ensure that our workplace rules are followed even by sub-subcontractors to prevent such a thing from happening again.” (Guardian)
Responsible Investment
Starbucks to raise $500 million in 10-year sustainability bond
Starbucks has announced it plans to raise $500 million to pay for its supply chain sustainability projects, including support programmes for farmers in coffee-growing regions. The Seattle-based coffee chain said it would sell 10-year bonds to go toward those projects, joining companies such as Apple, Unilever and EDF who have made similar moves. “Sustainability is not just an add-on, but an integral part of Starbucks, including our strategy and finances,” said Scott Maw, Chief Financial Officer. Starbucks said it would update every year how the money is being used. The company already operates an agronomy centre in Costa Rica along with a network of eight farmer support centres around the world, and has committed to invest $50 million in short- and long-term loans to farmers. (The Wall Street Journal*; BusinessWire)
Investment Leaders Group launches sustainability toolkits
The Investment Leaders Group (ILG) has launched two new tools which it says can help investors to tackle short-termism and lack of transparency in the financial sector. ILG is a network of ten pension funds, insurers and asset owners, including Allianz, Old Mutual, Standard Life and Zurich, organised by the University of Cambridge Institute for Sustainability Leadership. The reports follow a separate investor guide to carbon risk published last week. The first new report sets out a toolkit of ten design features for investment mandates with varying strengths of “sustainability” integrated into them. Investors can use the toolkit to design or assess investment strategies aligned with long-term responsibility and sustainability goals. The framework of the second new tool uses the UN Sustainable Development Goals as a starting point, and simplifies them into a set of six impact metrics for investors – basic needs, wellbeing, decent work, resource security, healthy ecosystems and climate stability. (Blue & Green Tomorrow)
Climate Change
Diplomats look to post-Paris future as Bonn climate meeting begins
Government representatives from around the world have gathered in Bonn for the latest round of UN climate talks with a view to moving forward implementation of the Paris Agreement, which was endorsed last month by representatives of over 170 countries. The next two weeks will see diplomats begin to finalise the next steps on how the world will implement the agreement and prepare for the next major COP summit in November in Marrakesh. Likely to be high on the list is how countries plan to implement promised emissions reductions, how they intend to finalise details on mobilising climate finance, how they can better define loss and damage proposals and how the support for market-based mechanisms will work in practice. “For years we focused on the conceptual constructs that undergird adaptation, mitigation, finance, technology and capacity building. It is now time to move beyond the theoretical concepts to the new reality that they represent,” said Christiana Figueres, out-going executive secretary of the UNFCCC. (Business Green)
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