When summer sun isn’t fun

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Sharon Kimathi
Energy and ESG Editor, Reuters Digital

Hello!

For some of us in the northern hemisphere, July should be a time for relaxation and basking in the sunshine. But this year, the heat has taken a turn for the worse as firefighters tackle wildfires amid a sweltering heatwave in France, Turkey, Croatia, Portugal and Spain. Elsewhere, China's most populous city of Shanghai issued its highest alert for extreme heat. Meanwhile in America, Texans were asked to cut power usage for the third time this year as soaring electricity demand threatened to outpace available supplies amid a stifling heatwave.

In France, hundreds of firefighters, supported by six water-bomber aircraft, battled two wildfires in the southwest, which prompted the evacuation of thousands of campers, Fabienne Buccio, head of the Gironde and Nouvelle-Aquitaine region, said. About 1,000 firefighters were battling to bring under control two wildfires in southwestern France that have already burnt almost 4,000 hectares.

Thousands of people were evacuated due to a wildfire in Turkey's southwestern Datca peninsula on Thursday, as firefighters battled to contain the blazes fanned by strong winds that spread to residential areas overnight. Turkey's Disaster Management Authority (AFAD) said some 450 houses and 3,530 people were evacuated as fires reached residential areas in the sparsely populated parts of the peninsula.

Croatian authorities deployed firefighting aircraft and dozens of firefighters and soldiers on Thursday in an effort to contain three major wildfires along the country's Adriatic coast. The wildfires, fanned by strong winds, broke out earlier this week as flames caught dry brush and low vegetation in the areas of Zadar and in the Sibenik.

Several wildfires swept across Portugal's central region and western Spain as thousands of firefighters battled more than 20 blazes that raged on Wednesday, menacing villages and disrupting tourists' holidays amid a heatwave that pushed temperatures above 45 degrees Celsius (113 degrees Fahrenheit) in some parts of Europe.

With human-caused climate change triggering droughts, the number of extreme wildfires was expected to increase 30% within the next 28 years, according to a February 2022 U.N. report. Scientists say human-induced climate change is making heatwaves more likely and more severe.

These extreme heatwaves experienced across the global north are reaching record-breaking temperatures as China's city of Shanghai – a commercial and industrial hub of 25 million people – declared a red alert on Thursday, warning of expected temperatures of at least 40 degrees C (104 F) in the next 24 hours. Temperatures soared as high as 40.6 C in the afternoon, but fell short of Wednesday's 40.9 C, which matched a 2017 record. The province of Zhejiang south of Shanghai issued a record 51 red alerts in one day, with local media reporting people being admitted to hospitals for heatstroke or even dying from it.

Over in the United States, the Electric Reliability Council of Texas (ERCOT), which operates the grid that serves more than 26 million customers, urged residents to cut power use during the hottest hours of the day and warned of a risk for rolling blackouts due to the scorching heatwave. Residents were asked to turn up thermostats, defer the use of high-power appliances and turn off swimming pool pumps.

Talking Points

Dry land surrounds Antelope Island where there used to be water in the Great Salt Lake, in Salt Lake City, Utah, U.S., July 13, 2022. REUTERS/Brian Snyder

•	Utah's Great Salt Lake dropped to its lowest recorded level this month amid a two-decade drought, a grim milestone as researchers and politicians point to grave threats to wildlife and people along its receding shores.

•	Efforts to reach carbon neutrality by 2050 are likely to remain out of reach as copper supply fails to match demand amid growing use of solar panels, electric vehicles and other renewable technologies, data from S&P Global showed on Thursday.

•	Average support for shareholder resolutions on environmental, social and governance (ESG) topics at U.S. companies dipped to 26.6% this year from 32% in 2021 as asset managers shied away from backing tougher investor requests, new data showed.

•	Looking to keep doing business in West Virginia amid a review of energy lending policies, several top U.S. banks cited criticism from climate activists as evidence they are not boycotting fossil fuels.

•	U.S. President Joe Biden will plead for more oil on his visit to Saudi Arabia. Riyadh may be tempted to say no. But with China and India buying cheaper Russian crude, diverting shipments could boost selling prices. Close ties could also unlock more Western capital for Saudi.

In Conversation

Philipp Aeby, CEO and co-founder of RepRisk, a Swiss ESG data science company

“Greenwashing is no longer a trivial offense. Those who sell their products as ‘ESG compliant’ must ensure they’re fulfilling that promise – and they can expect significant fines in the future if they don’t. This is bad for them, and bad for their investors.

“The challenge in identifying and mitigating greenwashing is two-fold: the first is looking beyond the tick-box framework manner of self-reporting which allows companies to claim ESG compliance when that may not be the case. The second is bridging the knowledge gap regarding the actual behavior of companies.

“This involves going beyond inconsistent ESG ratings which make it difficult to distinguish between those with truly sustainable operations, and those that are misleading and miscommunicating – for example those publicly committing to climate action, but masking continuing issues that are out of sight further down the supply chain that could reverse progress on their climate action promise.”

ESG Lens

Investing based on environmental, social, and corporate governance (ESG) principles became a $35 trillion industry on the back of a long run-up in stocks that lasted from 2009 until the start of this year. Investors now have to decide whether they will stick with it when making money is no longer easy.

ESG Movers and Shakers

British public service broadcaster Channel 4 has appointed its first director of inclusion, Marcia Williams. She joins from Transport for London, where she currently holds the title of director of diversity, inclusion and talent. She will sit on Channel 4’s executive management board and will oversee the broadcaster's inclusion and diversity strategy.

U.S.-based gas manufacturer Capstone Green Energy has appointed Scott Robinson as interim chief financial officer (CFO). Robinson currently serves as an executive consultant with Vaco, a company that provides senior level financial professionals on an interim basis. Prior to joining Capstone, he served in executive finance and accounting positions with various companies, including as CFO at precious metals firm Lear Capital, senior vice president of finance at toy company JAKKS Pacific and director of finance at Walt Disney.

The Association of International Certified Professional Accountants (the Association) has appointed Dr. Jeremy Osborn to the newly created role of global head of environmental, social and governance (ESG) matters. Osborn will lead the Association’s ESG strategic initiative and joins from the Value Reporting Foundation, where he served as director of accountancy relationships. Prior to that, Osborn worked at global financial services and accountancy firms EY and Accenture, and Prince Charles’ Accounting for Sustainability (A4S) charity.

U.S.-based Heritage Bank of Commerce has appointed Jan Coonley as chief people and diversity officer. Prior to joining the bank, Coonley was head of culture and diversity and inclusion (DEI) for JP Morgan Chase’s consumer bank. She previously held a progression of roles at U.S. Bank and served in a variety of advisory and board roles in Southern California, including serving on the Chinatown Service Center Board and Step-Up Board of Directors.

Quote of the Day

“We are mindful of the current energy crisis but we’re also very convinced that it should be used to accelerate the transition to green energies rather than increasing reliance on fossil fuels. For some economies and countries, it will take more time to get there, and some will need to reopen their coal plans, but it has to be a transitory solution.”

Ulrike Decoene, head of communication, brand and sustainability at multinational insurance company AXA Group

Looking Ahead

•	Portugal's Environment minister Duarte Cordeiro will speak to lawmakers in Parliament today about measures to mitigate the price of electricity in the Iberian market.

•	A federal U.S. judge will consider whether to issue a preliminary injunction to Ben & Jerry's later today, as it tries to undo parent Unilever Plc's sale of its Israeli business to a local licensee.

•

Finland's ownership steering minister Tytti Tuppurainen will travel to Berlin tomorrow to meet with German state secretary for financial market policy and European policy Jorg Kukies and other representatives of the German Government to negotiate a solution to energy company Uniper's financial struggles.

•	Finance ministers and central bankers of the G20 will gather on the Indonesian island of Bali for a series of meetings and panel discussions on July 16.

Macro Matters

U.S. consumer prices surged 9.1% in June, the largest annual increase in more than four decades amid stubbornly high costs for gasoline, food and rent, cementing the case for another 75-basis-point interest rate hike by the Federal Reserve this month.

The larger-than-expected increase in the year-on-year consumer price index reported by the Labor Department on Wednesday also reflected higher prices for healthcare, motor vehicles, apparel as well as household furniture. The CPI increased by the most in nearly 17 years on a monthly basis.

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