this is, FT News Briefing Podcast Episode: ‘Corporate backlash against net zero‘
Sonya Hutson
Good morning from the Financial Times. Today he is Friday December 2nd and this is the FT News Briefing.
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Europe is headed for a price cap on Russian oil. Investors again poured into emerging markets. And many of the world’s global companies are planning to move towards net zero emissions. But there are voices of opposition. Sonya Hutson instead of Mark Filippino. Get the news you need to start your day.
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In just a few days, the European Union will ban Russian crude oil from shipping by sea. The December 5 deadline puts pressure on EU member states to agree a global price ceiling for Russian oil. The idea is to curb Moscow’s oil revenues, which have so far not been so depressed by Western sanctions. Yesterday in Brussels he proposed a cap of $60 a barrel. If member states agree, other her G7 countries will have to agree on that price. Russia is likely to discuss a response with Saudi Arabia and other oil producers at her OPEC meeting on Sunday.
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It’s been a terrible year for emerging markets. But last month, investors had a change of heart. They re-infused into emerging markets, stocks and bonds. JP Morgan dollar-denominated emerging market government bonds rose more than 7.5% in November, the best month since 1998.
Tommy Stubbington
Yeah, this was a rally across the board. Certainly some of the countries that have had the steepest declines, especially certain countries that have basically been pushed to the brink or into a debt crisis by what happened in the market this year, are among the steepest. recovered to. For example, we have seen countries like Sri Lanka default on their debts. We have seen debt crises unfold in Pakistan and Ghana as well. Bonds in these countries have recovered very sharply. But it wasn’t just them. It was an emerging market across the board.
Sonya Hutson
So, Tommy, how much of this November’s rally can make up for losses earlier this year in emerging markets?
Tommy Stubbington
That’s the point. It must be remembered that these markets have also fallen significantly this year. This is about the same as the U.S. stock market has fallen sharply again this year, and stock markets everywhere have fallen. Yes, November was the biggest rally in years for both equities and bonds, but both continue to post double-digit losses for the entire year.
Sonya Hutson
And as major central banks are raising rates more slowly, is this return to emerging markets expected to continue, or is it just a temporary easing? Are you listening?
Tommy Stubbington
Well, I think it’s reluctant to predict long-term gains in emerging markets. Now, the reason is, yes, what’s going on with US interest rates gives us some comfort. But keep in mind that emerging markets, like the rest of the world, are probably about to face a global recession. will be hit by a decline in So even if we are freed from interest rate cycles, the fundamentals will deteriorate. The ability to service debt and the ability of businesses to make a profit domestically will deteriorate. So I think there is some sense in that. Obviously we haven’t seen that yet, but there is a sense that this could be a sharp rally in the midst of a larger bear market.
Sonya Hutson
Tommy Stubbington is the FT’s Capital Markets Correspondent.
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About a third of the world’s leading companies have made net-zero pledges or targets to reduce their carbon emissions to zero. But at the recent UN climate conference COP27, FT Business Her columnist Pilita Clark noticed a backlash in business sentiment. She now joins me to talk more about this. Hi, I’m Pirita.
Pirita Clark
Hi. I’m glad I came here.
Sonya Hutson
Pirita, you regularly attend these large UN climate conferences. What changed between last year’s conference and this year’s conference?
Pirita Clark
So it made a big difference for business people. I think the overwhelming feeling these companies had at his COP26 in Glasgow last year was that they were on the right track and part of the solution. They appeared in Egypt a year later at his COP27 and were almost told they were part of the problem by a group of experts appointed by the United Nations to examine these companies’ net-zero pledges. I was. And their message was literally that too many people are just trash. They don’t have enough scientific rigor and really companies need to do more.
Sonya Hutson
What exactly did the report say? What do these companies need to do better?
Pirita Clark
So there was a lot they needed to do better. But, for example, the report says companies cannot claim to be net zero if they continue to build or finance new supplies of fossil fuels such as oil, gas and coal. They also say they cannot rely on anything cheap and are suspicious of carbon credits and carbon offsets to offset their own carbon pollution. Instead, they had to focus on reducing their own emissions. For some companies, that means far more than they negotiated when they set their net-zero targets. So there’s been a fair amount of misfortune, and quite a few people say it took years to get them to agree to, well, even set a net-zero target. And now we are told that everything we do is not good enough.
Sonya Hutson
So, does this mean companies get fed up and say “well, we can’t do anything right” and abandon their net-zero pledges, or is it possible?
Pirita Clark
So this is really a big unknown. And once you make a net-zero pledge, I don’t think it’s easy to let it go. The difficulty is that in some sectors, if you’re buying steel to try to make trucks, for example, they’re overwhelmingly made with coal right now. Can you go to the market and say, “I want to stop buying steel made from coal, I want to buy steel made from environmentally friendly hydrogen”? It turns out that very few people do. Government must intervene. To help many businesses reach their net-zero goals, we need to put in place policies that accelerate production of what they really need. So we are in this very nasty and difficult phase right now. I think a lot of the time companies are actually pretty motivated and full of people who really want to do the right thing. But doing so can be very difficult and very expensive.
Sonya Hutson
Why is it so hard to get this whole system of government and corporations on board? Because this whole machine has to work together, right?
Pirita Clark
In many ways, it’s not surprising, because it’s been years, not decades, that humans as a species have tried and tried to change the world’s energy system. We are overwhelmingly dependent on it and need to reduce it very quickly. It’s incredibly difficult, messy and messy. Unfortunately, I don’t think that will change anytime soon.
Sonya Hutson
That’s FT’s Pirita Clark. Thank you, Pirita.
Pirita Clark
Thank you very much.
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Sonya Hutson
Before we set off, the week was a thrill for volcano researchers. The largest active volcano on earth has finally awakened. Hawaii’s Mauna Loa erupted lava into the air and descended Mt. His Clive Cookson, our science editor, watched the video and described it as follows: . .
Clive Cookson
. . a huge fountain illuminated in orange. It’s like a line of lava erupting from the surface of the earth. It’s one of the most spectacular I’ve ever seen of him.
Sonya Hutson
Volcanologists are also losing their minds, not only because they’ve waited nearly 40 years, but because the mountain is covered with scientific instruments to collect data.
Clive Cookson
And now that it’s erupted, they’re analyzing all that data for two reasons: First, they’re looking deeper into the internal volcanic plumbing underground to see how this magma, which is lava at about 1000 degrees Celsius, is working. Second, and perhaps more importantly, we want to learn lessons about how to better predict volcanic eruptions. Because no one knew when this would happen.
Sonya Hutson [
That’s the FT’s science editor, Clive Cookson.
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For more on all these stories, visit FT.com. This is your daily FT news briefing. Check back next week for the latest business news. FT News Briefing is produced by Marc Filippino, Fiona Symon and myself, Sonja Hutson. The editor is Jess Smith. David da Silva, Michael Lello, and Gavin Kallmann helped out this week. Executive Producer He is Topher Forhecz. Cheryl Brumley is the Global Head of Audio for FT. The theme song is She Metaphor Music.
