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As the United Nations gathered in Madrid for climate talks, a debate emerged over how to distinguish companies truly committed to eco-friendly policies from companies looking to cash in on social sentiment. On the first day of the UN climate talks, the Madrid-based utility Endesa took out full-page ads in some of Spain's top newspapers, pledging to shut down its power plants and boost renewable energy. While some applauded the move, others pointed out that Endesa is Spain's biggest polluter, prompting a debate over Endesa's intentions, reports Bloomberg (12 December, Millan Lombrana, Hodges). Consumers are increasingly socially conscious and committed to environmentally-friendly policies, forcing corporations to step into line. But some companies are perceived as only greenwashing, or convincing consumers they are working to protect the environment, for the sake of their own business. Jennifer Morgan, executive director of the environmental group Greenpeace International, said that greenwashing companies do more damage than good. "Some of these companies try and claim they’re compliant with the Paris Agreement, and they are at the same time keeping governments back from being more ambitious," Morgan said. Teenage climate activist Greta Thunberg echoed these remarks, arguing that "[t]he real danger is when politicians and CEOs are making it look like real action is happening, when in fact almost nothing is being done apart from clever accounting and creative PR."

From "Greenwashing Concerns Soar as Companies Vow to Clean Emissions"
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A growing number of large asset managers are warning they will actively punish board executives at companies that do not improve their pollution disclosure, reports the Financial Times (12 December, Mooney, Fletcher, Hook). BNP Paribas was one of the first to change its voting policy to consider carbon emissions, updating it in 2016 to align with the goals of the Paris climate accord. The asset manager abstains or votes against resolutions such as approving a company's financial statements when companies do not report properly on their carbon footprint. Michael Herskovich, head of corporate governance at BNP Paribas, “Voting is a key component of our ongoing dialogue with companies, and our policy ... is designed to push directors to incorporate climate change considerations into their business strategy.” Legal and General Investment Management, meanwhile, has voted against 17 company chairs or boards in the first half of this year over environmental concerns. Sacha Sadan, director of corporate governance at the group, said investors played a “significant role in pushing companies to ensure they address the risks of climate change."

From "Big Investors Turn Screw over Climate Pollution Disclosure"
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Beginning on 1 January, the shipping industry will have to switch to low-sulfur fuel or install exhaust gas cleaning systems, reports Reuters (12 December, Saul). The requirement is intended to reduce emissions of harmful fumes into the environment. The container shipping industry is expected to invest US$10 billion to avoid violations. The rules have been met with mixed reactions from the industry. Some warn of the risk of unexpected fires and collisions caused by engine failure. Large ship owners are expected to handle the new fuels properly, but experts say smaller ships could run into problems. Meanwhile, other ships are able to avoid problems associated with the rules as they run on liquefied natural gas. Stephen Harris, senior vice president with insurance broker Marsh, said determining when insurance applies under the new rules could be difficult. One question raised is who pays a fine for using the incorrect fuel when no alternative is available. “Is it non-compliance? The question marks are bigger than the answers," he said.

From "Shipping Industry Sails Into Unknown with New Pollution Rules"
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The demise of trucking company Celadon Group is another blow in what's proving to be a dismal stretch for the industry this year, reports CBS News (11 December, Gibson). Celadon abruptly shut down, leaving more than 4,000 people jobless and, in some cases, leaving drivers stranded with their rigs in the middle of a route. The company was facing an accounting scandal that prosecutors contend cost shareholders up to US$60 million. Though Celadon's specific accounting woes may be unique, the troubles facing the trucking industry are not. In the first three quarters of 2019, nearly 800 carriers went out of business, more than double the count of trucking failures in 2018, according to transportation industry data firm Broughton Capital. The industry is being squeezed by escalating insurance costs, tariffs impacting the ability to get cheaper products from China, and a decline in the spot market where shippers book last-minute transportation.

From "Celadon Bankruptcy Biggest of Nearly 800 Truck Company Failures This Year"
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The Australian Competition and Consumer Commission (ACCC) warned Thursday that Anheuser-Busch InBev’s AUS$11 billion asset sale to Japan’s Asahi could hurt competition in Australia's cider and beer sectors, reports Reuters (11 December, Koilparambil). AB InBev plans to sell Carlton & United Breweries (CUB) as part of its multiyear plan to lower debt. But the ACCC said the sale to Asahi would "combine the two largest suppliers of cider in a highly concentrated market." The ACCC further expressed concerns that the sale could similarly impede competition in the beer sector at some point in the future. AB InBev has planned to close the sale in the first quarter of 2020, and the ACCC said it would come to a final conclusion by 19 March. Analysts said Asahi would likely be willing to locally shed AB InBev brands like Beck’s, Stella Artois, and Budweiser, but predicted that losing Corona would be a deal-breaker for the Japanese company.

From "AB InBev's AUS$11 Billion Aussie Asset Sale to Asahi Hits Hurdle"
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China’s companies racked up some towering bills as they expanded, and the world’s investors and lenders rushed to offer them even more money. But now that the debts are due, the companies are struggling to find the funds to pay them, a clear sign that the world's second-largest economy is feeling the strain of its worst slowdown in 30 years, reports the New York Times (12 December, Stevenson). Tewoo Group, a high-profile government-run trading firm, and Peking University Founder Group, an equally large conglomerate backed by China’s most distinguished university, became the latest two Chinese firms to come up shorthanded when asked to pay their debts. This year, Chinese corporate borrowers have defaulted on at least US$200 billion owed to investors and lenders from around the globe. China now faces the difficult task of figuring out which of these companies it will allow to fail. Though Beijing has previously been inclined to save companies and preserve jobs, it has shown recent willingness to teach companies a lesson about borrowing too much by letting them go insolvent. Over the past two years, Chinese government officials have begun to crack down on the rampant borrowing that fueled the country's economy through the global financial crisis of the late aughts.

From "China’s Companies Binged on Debt. Now They Can’t Pay the Bill."
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In a letter to the US Treasury Secretary Steven Mnuchin, the Council of the European Union called for clarification of rules affecting “accidental Americans," reports the Guardian (12 December, Makortoff). The Foreign Account Tax Compliance Act (FATCA) requires foreign financial firms with US operations to report information about US taxpayers by 1 January 2020 or face huge fines. Banks have been racing to identify any remaining dual-nationality customers before the deadline and may freeze accounts of customers who do not supply tax identification (ID) details, which many “accidentals” never obtained. The US Internal Revenue Service (IRS) recently issued an update, saying it would consider each case and would not automatically fine banks for failing to provide all the tax ID numbers of suspected dual nationals. The EU’s letter said the update was not binding and left too much power in the hands of the IRS to determine whether banks had breached the rules.

From "EU Joins Fight Against US Tax on "Accidental Americans""
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Analysts at Israeli cybersecurity investigator Cybereason found new computer viruses were employed to steal credit card details from retail stores and banks in the United States and Europe, reports the Jerusalem Post (12 December, Ron), allowing the hackers to act undetected for six months. The theft typically was executed at the point of purchase in stores using card scanners, and the attackers also targeted the information banks of financial institutions which use credit cards. This strategy is part of something called Anchor, which initially applies established hacking tools used by security experts for lateral diffusion of malware across target networks; once the hackers are certain they have reached a major target, they employ unique programs.

From "Israeli Team Finds Viruses to Steal Credit Card Info From Stores, Banks"
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The Detroit Free Press (13 December, Katkov) reports that McDonald's has won a victory in a legal battle over whether it should share responsibility for alleged labor violations in its franchisees' restaurants. The case posed a threat to the franchise model underlying one of the world's biggest employers. The US National Labor Relations Board ruled 2-1 to order an agency judge to approve a roughly US$170,000 settlement between McDonald's franchisees and their employees that absolves the restaurant chain from any direct responsibility as a joint employer. The Board's decision signals that the agency is not likely to hold franchisers and companies that depend on contracted labor liable for labor law violations at their subsidiaries' workplaces without strong proof that the parent company directly controls the staff members involved.

From "McDonald's Free From Liability for Franchise Labor Violations"
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Jonathan Chang, Tesla's general counsel, is set to leave the company to become the general counsel at AI chip startup SambaNova, reports CNBC (12 December, Palmer). Chang's departure marks the third time Tesla has lost its general counsel over the past 12 months. In December 2018, Todd Maron left the company, while his successor Dane Butswinkas departed in February 2019. Chang lasted 10 months as general counsel, but his entire tenure at Tesla spanned almost nine years. Tesla weathered turbulent times during Chang's 10 months as the company's top lawyer, including several controversies surrounding CEO Elon Musk.

From "Tesla Loses Its Third General Counsel in the Last Year"
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Germany's competition authority fined three steelmakers a total of €646 million as part of a settlement related to price-fixing in the steel industry, reports Bloomberg (12 December, Mazneva). Thyssenkrupp AG, Ilsenburger Grobblech GmbH, and Voestalpine AG were each fined as part of the settlement, in addition to three unnamed individuals. Germany's cartel office, the Bundeskartellamt, contended that the three companies and the individuals exchanged information and agreed to surcharges on a kind of steel typically used to construct bridges, ships, and pipelines. The illegal arrangement allegedly lasted from 2002 to 2016, and also included the steelmaker Dillinger Hüttenwerke, which received immunity in exchange for being the first company to cooperate with the probe. Austria-based Voestalpine said it had been fined €65.5 million, while Thyssenkrupp did not disclose the exact size of its fine but said that the €370 million it set aside would cover its penalty. A spokesman for Ilsenburger’s parent Salzgitter confirmed the fine, but declined to comment on the size.

From "Germany Fines Steelmakers €646 Million for Price Fixing"
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With his election success Thursday, British Prime Minister Boris Johnson is poised to deliver on his campaign promise, getting Brexit done, within weeks, reports the Associated Press (13 December, Katz). Johnson's Conservative party enjoyed a sweeping victory in the elections, giving him what he described as "a powerful new mandate" to oversee the United Kingdom's withdrawal from the European Union. It appears certain now that Johnson will complete Brexit by the 31 January deadline, but he must first put the withdrawal plan he negotiated in October before Parliament. It is likely to be passed in early January. At that point, Johnson will still face the mountainous challenge of negotiating a complex trade deal with the European Union by the end of next year. During the transition period between 31 January and the adoption of a new trade deal, the United Kingdom will largely continue to follow EU rules and regulations. Some analysts have warned that it is unlikely the two sides will come to agreement on a trade deal by the end of 2020, advising Johnson to seek an extension to the talks to avoid a hard Brexit. But Johnson has repeatedly pledged that the United Kingdom will not seek an extension of the transition period, despite rumblings from European leaders that one year is not enough time for trade talks.

From "Johnson Victory Means Brexit is Coming, Tough Talks Loom"
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US Secretary of State Mike Pompeo on Wednesday announced a fresh round of sanctions against Mahan Air and the Islamic Republic of Iran Shipping Lines (IRISL), Iran's largest airline and shipping group, respectively. The new sanctions were applied against the two groups, as well as IRISL's Chinese subsidiary E-Sail Shipping, because the groups allegedly helped Iran develop ballistic missiles in defiance of UN sanctions. There is a period of 180 days before the sanctions go into effect to ensure that customers shipping humanitarian goods are not adversely impacted. US government officials are hoping the sanctions will dissuade other companies and countries from doing business with Tehran, reports the Financial Times (11 December, Sevastopulo, Bozorgmehr). The sanctions are the latest weapons wielded by the United States, which is employing a maximum-pressure campaign to get Iran to replace the 2015 nuclear deal jettisoned by Donald Trump. The United States has offered to open up talks for a new agreement, but Iran said it will not come to the table while under sanctions. Brian Hook, the top State Department official for Iran, said the United States will continue to apply pressure on Iran until an agreement is reached. "We've said we're not going to stop doing sanctions until we have a comprehensive deal," Hook said.

From "US Hits Iran's Biggest Airline and Shipping Group with Sanctions"
Abstract News © 2019 Information, Inc.

Nestlé has agreed to sell its US ice cream arm to a joint venture it has with private-equity firm PAI Partners for US$4 billion, reports the Wall Street Journal (11 December, Chaudhuri). Nestlé has been working to improve profit margins at the division but has seen its US market share decline in recent years, dropping to 15 percent last year from 19.3 percent in 2010.

From "Nestlé to Sell US Ice Cream Business"
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Saudi Arabian oil company Aramco surpassed Apple to become the world's most valuable company Wednesday, reports the Associated Press (11 December). Aramco hit the landmark when its shares jumped 10 percent in its stock market debut. The shares' rally on the Saudi exchange brought the state-owned company's total value to US$1.88 trillion. Just 1.5 percent of Aramco is listed, but it has raised a record US$25.6 billion. Despite the success of the sale, the kingdom’s decision not to list the company on a larger foreign exchange points to concerns that a global flotation would raise. Listing shares outside Saudi Arabia would open up the company to greater disclosure rules and expose it to foreign laws at a time when the country is under scrutiny for its role in regional conflicts as well as for the killing of dissident journalist Jamal Khashoggi. Crown Prince Mohammed bin Salman plans to use the money raised from the sale of a sliver of the kingdom’s crown jewel to diversify the country’s economy and fund major national projects that create jobs for millions of young Saudis entering the workforce.

From "Saudi Stock Offering Creates World's Most Valuable Company"
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EU states have rejected a set of rules governing which financial products can be called “green” and “sustainable,” reports Reuters (11 December, Guarascio, Ekblom). The decision overturned a deal struck just last week by EU lawmakers and the Finnish presidency of the bloc, which was hailed as a compromise that could establish a global standard on green bonds and other financial products. Britain, France, the Czech Republic, Hungary, Poland, Slovakia, Romania, Bulgaria, and Slovenia opposed the deal at a meeting of EU diplomats, fearing it would prevent investments in nuclear and coal projects from being labelled as green. The setback came on the same day the European Commission unveiled plans to make the bloc greener and drastically cut carbon emissions.

From "EU States Reject Green Finance Law"
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As violent demonstrations in Iran dominate the headlines, a large-scale security breach quietly flew under the radar, reports the New York Times (11 December, Fassihi, Bergman). Millions of Iranian bank customer accounts were exposed in the breach, which took place last month. In total, details have been published on social media of some 15 million debit cards attached to Iran's three largest banks. Almost 20 percent of Iran's entire population is estimated to have been affected by the breach.

From "Iran Banks' Customer Accounts Exposed Online"
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YouTube announced that it will now take down videos that lob insults at people based on race, gender expression, sexual orientation, or other “protected attributes," reports the Associated Press (11 December, Lerman). YouTube is further cracking down on inflammatory speech by prohibiting even veiled threats of violence. Politicians, video creators, and viewers alike have all criticized the Google-owned company for the material it allows on the site, with some accusing the video platform of fostering hate speech and extremism. Matt Halprin, the company’s vice president of trust and safety, said YouTube has been re-examining its policies and guidelines for two years in a bid to allow free speech while cracking down on hateful speech. YouTube also announced it would take action against channels that have been found to repeatedly harass people in videos.

From "YouTube Cracks Down on Racist, Sexist, and Similar Insults"
Abstract News © 2019 Information, Inc.

US corporations with market capitalizations of less than US$2 billion have been slower than larger companies to appoint more women to their boards of directors, reports Reuters (11 December, DiNapoli). An annual study from the National Association of Corporate Directors (NACD) found that the percentage of women on the boards of small companies with market capitalizations from US$300 million to US$2 billion rose to 17 percent in 2019 from 13 percent in 2017. The percentage of women on the boards of companies in the Russell 3000, accounting for most of the US stock market, rose to 19 percent from 15 percent over the same time period, according to the report, prepared by NACD with data provider Main Data Group. Barton Edgerton, a researcher at NACD, said the evidence suggests that smaller companies "are bringing the overall average down." Proxy advisers and asset managers have long pushed companies to introduce diversity to their boards by adding women.

From "Small US Companies Slower to Add Female Directors to Their Boards: Study"
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Gottlieb Keller, the longtime general counsel for the Swiss pharma giant Roche, is set to step down from his position on 31 March after more than 11 years as the company's top lawyer. Claudia Böckstiegel, the current legal head of Roche's diagnostics division, will step up as the new general counsel, according to Law.com (10 December, Bantz). Keller played a significant role in several high-profile cases for Roche, including the New Jersey Supreme Court’s decision in 2018 to update its standard on the admissibility of expert evidence in products litigation. Keller also led Roche through two successful acquisitions during his tenure. His successor, Böckstiegel, joined Roche in 2001 as legal counsel for Roche Diagnostics in Mannheim, Germany, but relocated to Roche's Switzerland headquarters three years ago.

From "General Counsel for Swiss Pharma Giant Roche Is Stepping Down"
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