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Global standards body takes aim at company ‘greenwashing’ claims

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November 3, 2021

By Huw Jones

LONDON (Reuters) -“Greenwashing” by companies eager to massage their environmental credentials and increase their appeal to ethical investors came under scrutiny on Wednesday with the launch of a standards body that aims to weed out unjustified climate claims.

The International Sustainability Standards Board (ISSB) seeks to build on and replace a patchwork of voluntary disclosure practices that have had mixed success, with “baseline” global standards that companies could use to tell investors about the impact of climate change on their business.

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The aim is to bear down on companies giving a flattering picture of their climate policies and business practices, designed to meet concerns of investors in what has become a multitrillion-dollar global market for environment, social and governance (ESG) targeted funds.

“We are really focused on greenwashing,” said Ashley Alder, chair of IOSCO, the global umbrella body for securities regulators, which helped set up the ISSB. “It’s super important, and if you don’t have basic information on a globally comparable basis, then you increase the risks of greenwashing enormously.”

“They (the new standards) are a baseline but they are not basic,” said Alder, who also heads Hong Kong’s securities watchdog, adding that the new board is a ‘pathway’ to mandatory reporting of climate risks.

The ISSB, unveiled at the UN’s COP26 global climate summit https://www.reuters.com/business/cop in Glasgow and whose board and chair will be based in Frankfurt, will publish its first batch of global norms for climate-related company disclosures next year.

“The current debate about greenwashing is a symptom and it will not go away until we have a clear, enforceable global set of standards,” Gerald Podobnik, finance chief of Deutsche Bank’s corporate division, told an event at the Glasgow summit.

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FIRST STANDARDS IN 2022

The new body’s parent, the IFRS Foundation, published prototype climate disclosure standards for the ISSB to discuss and put out to public consultation ahead of adoption in the second half of 2022.

It will be up to each country to decide if it will apply and enforce the ISSB standards, but Klaas Knot, president of the Dutch central bank, told the climate summit that a voluntary approach to disclosures was reaching its limit.

“This is a major step forward for reporting around sustainability and towards the development of a truly international corporate reporting system,” said Michael Izza, chief executive of the ICAEW, a professional accounting body in Britain.

Alder said IOSCO was considering a possible assurance framework to ensure rigorous checks on whether the ISSB standards are properly applied by companies, as is already the case for financial reporting where outside auditors check accounting rules are followed.

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“We do see that assurance is one of the legs of the stool that is necessary to ensure there is maximum confidence around reporting under these standards,” Alder said.

IOSCO could also formally endorse the new standards, meaning its members, who account for 95% of the world’s securities markets, would then be obliged to implement and enforce them.

The success of ISSB will hinge on backing from major countries, but the European Union has already moved ahead with its own disclosures, which are more ambitious as they require companies to also explain how their operations affect climate change.

“To be effective, the standards will need to be brought into regulation around the world, together with associated enforcement, monitoring, governance and controls, assurance, and training,” said Veronica Poole, global IFRS leader at accountants Deloitte.

(Additional reporting by Tom Sims in Frankfurt; Editing by David Holmes and Steve Orlofsky)

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Buying the Omicron dip

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November 29, 2021

A look at the day ahead from Danilo Masoni.

Sell first, get answers later. With stocks near lifetime peaks, the Black Friday reaction to the new fast-spreading virus strain Omicron was hardly surprising.

But a weekend later, investors look heavily engaged in buying the dip, as markets take a more balanced view of risks attached to what the WHO called a “variant of concern”.

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After their ninth biggest drop ever on Friday, gains in crude prices topped 5% earlier in Asia and stock futures point to a solid bounce across Europe and America.

A South African doctor said patients with Omicron have “very mild” symptoms and investment houses don’t look to have budged that much. Credit Suisse, for example, made no portfolio changes, staying slight overweight on equities.

Perhaps more telling is that retail traders poured north of $2 billion into U.S. stocks on Friday, setting the second biggest daily inflow on record, per Vanda Research data.

Of course there are uncertainties and that will likely make for volatile days heading into the Christmas shopping season.

Understanding the level of severity of the variant “will take days to several weeks”, said WHO. And vaccine maker BioNTech needs up to two weeks to figure out whether the shot it makes with Pfizer needs to be reworked.

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So while Omicron has spread from Australia to the Netherlands and governments ban travel and mull lockdowns, markets may also gamble on central bankers turning more patient in their path towards rates normalisation.

Lots of speakers from the Federal Reserve and the European Central Bank are lined up for today. On Sunday, speaking about risks to the recovery, ECB’s Lagarde said: “We now know our enemy and what measures to take.”

Key developments that should provide more direction to markets on Monday:

* ECB speakers: Governor Lagarde, ECB board members AndreaEnria, Isabel Schnabel, Pentti Hakkarainen; ECB Vice PresidentLuis de Guindos * Euro zone consumer sentiment/inflation expectations * German preliminary CPI/HICP * Fed speakers: Chairman Jerome Powell, New York PresidentJohn Williams, Governor Bowman * Emerging markets: Kenya central bank meets; Turkey tradebalance and bank NPL ratios (This story refiles to fix chart)

(Reporting by Danilo Masoni; Editing by Saikat Chatterjee)

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UK regulator set to block Meta’s Giphy deal – FT

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November 29, 2021

(Reuters) -The UK competition regulator is expected to block Meta Platforms’ acquisition of online GIF platform Giphy in the coming days, the Financial Times reported https://www.ft.com/content/662c8e3f-4909-4bec-9131-c0237bb4897d on Monday.

The Competition and Markets Authority is set to reverse the deal in what would be the first time the watchdog has reversed a Big Tech acquisition, the report said, citing individuals close to the matter.

Meta Platforms and the regulator did not respond to requests for comment from Reuters sent outside working hours.

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The regulator had in October fined the U.S. social media giant Facebook, now Meta, 50.5 million pound ($67.35 million) for breaching an order that was imposed during an investigation into its purchase of the GIF platform, Giphy.

Facebook bought Giphy, a website for making and sharing animated images, or GIFs, in May last year to integrate it with its photo-sharing app, Instagram. The deal was then pegged at $400 million by Axios.

($1 = 0.7499 pounds)

(Reporting by Sneha Bhowmik in Bengaluru; Editing by Uttaresh.V)

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Evergrande shares fall after chairman cuts stake; Fantasia suspends trading

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November 29, 2021

HONG KONG (Reuters) – Shares in China Evergrande Group fell as much as 4.8% on Monday morning, after its chairman trimmed his stake in the cash-strapped property developer to raise about $344 million.

The group’s electric vehicle unit, China Evergrande New Energy Vehicle Group Ltd, also dropped more than 5% after it said the company was still exploring ways to pump capital into the unit with different investors.

Evergrande has been scrambling to raise capital as it grapples with more than $300 billion in liabilities and Chinese authorities have told its chairman, Hui Ka Yan, to use some of his personal wealth to help pay bondholders, sources have said.

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Evergrande failed to pay coupons totalling $82.5 million due on Nov. 6 and investors are on tenterhooks to see if it can meet its obligations before a 30-day grace period ends on Dec 6.

The developer disclosed late on Friday that Hui had sold 1.2 billion shares in the company at an average price of HK$2.23 each, lowering his stake in the Shenzhen-based real estate developer to 67.9% from 77%.

Once China’s top-selling developer, Evergrand’e troubles have hit the broader Chinese property sector with a string of debt defaults and credit rating downgrades of its peers in the last couple of months.

Fantasia Holdings suspended trading in company shares on Monday pending release of information. On Thursday, the developer said a winding-up petition was filed against a unit related to an outstanding loan.

(Reporting by Sumeet Chatterjee; Editing by Stephen Coates)

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