Investors at risk from China’s distant-water fishing practices, Planet Tracker warns
According to Planet Tracker’s latest report, financial institutions are “unknowingly exposed” to environmental and social harm through their investments in China’s distant-water fishing fleet.
Though China catches the most seafood of any nation, Planet Tracker’s research reveals that the Chinese distant-water fleet is in a precarious financial state despite generous government support; the fleet generates an average gross margin of just 14%.
According to the think tank, climate change threatens the fleet’s profitability and sustainability, with reduced biomass in its most lucrative fishing grounds. Moreover, the World Trade Organization (WTO) agreement on fisheries subsidies, introduced in 2022, adds further strain to the fleet could unintentionally push the fleet into increasing illegal, unreported and unregulated fishing and labour abuse.
Planet Tracker recommends an ambitious transition funded by the Hai Feng (ocean abundance) sovereign bond to address these challenges. The blue bond aims to finance 100% monitoring and traceability onboard the Chinese distant-water fleet and could help mitigate risks, support ocean health, and secure long-term profit.
Scope 3 emissions rise for fashion giants despite SBTi targets
Fashion Revolution’s latest report, What Fuels Fashion?, ranks 250 of the world’s largest fashion brands and retailers (with a turnover of $400m or more) based on their climate- and energy-related actions.
The report revealed that 47% of major fashion brands now have SBTi-validated targets in place, representing a 13% increase from the 34% of brands last year. However, of these 117 brands, only 105 disclose their progress, with only 56 reporting emissions reductions.
Credit: Fashion Revolution
Of the 250 brands, only four (ASICS, H&M, Marks & Spencer and Patagonia) disclose their emissions reduction targets in line with the United Nations’ goal of a 44% absolute emissions reduction by 2030.
Material production and raw material processing are responsible for approximately 68% of the sector’s Scope 3 emissions, and the industry is producing at unprecedented levels, with global consumption expected to rise by 63% by 2030. The ‘fast fashion’ industry is a significant driver of waste, with mounds of clothes ending up in landfills or incinerators, disproportionately impacting the Global South which lacks the resources to manage it.
The report also highlights fashion’s reliance on fossil fuels, with synthetic fibres accounting for 1.35% of global oil consumption. If the industry continues production on this scale, nearly 73% of textiles will be made from fossil fuels by 2030.
Although Fashion Revolution’s report illustrates the fashion industry’s widespread environmental impact, it also represents a roadmap towards a net zero future. It identifies key areas to ensure progress including improving transparency, transitioning to renewables, reducing production and phasing out the use of synthetic materials derived from fossil fuels.
Hefty greenwashing fine down under
In a landmark case for the financial services industry, the Australian Securities and Investments Commission (ASIC) has fined Mercer Superannuation AUD11.3 million ($7.7 million) for greenwashing. According to ASIC, this is the first case of its kind to be brought in front of the Australian Federal Court.
ASIC discovered that Mercer’s Sustainable Plus options were marketed as excluding investments in companies involved in carbon-intensive fossil fuels like thermal coal. However, these options were found to include investments in 15 companies engaged in the extraction or sale of carbon-intensive fossil fuels, such as AGL Energy, BHP, Glencore, and Whitehaven Coal.
In a statement, Mercer accepted the decision and apologised, noting that it had “undertaken a comprehensive review of our internal marketing processes and procedures” and assured that members’ funds would not be used to pay the penalty.
This outcome underscores the importance of genuine and transparent sustainability practices, signalling to investors and professionals that greenwashing will not be tolerated. Not only can penalties directly impact companies financially, but their impact on brands’ reputations can add a further negative dimension.
Wells Fargo’s diversity debacle
A U.S. judge has ordered Wells Fargo to face a lawsuit for allegedly deceiving shareholders by falsely promoting its diversity efforts while conducting fake interviews with non-white and female candidates it had no intention of hiring. Arguments that there was insufficient proof have been rejected by the judge, who stated that there is enough direct and indirect evidence to show that the San Francisco-based bank intended to defraud shareholders about its hiring practices.
Shareholders challenged 11 statements by the bank claiming the success of a 2020 policy requiring that at least 50% of candidates for high-paying jobs be from disadvantaged groups. Evidence included interviews with former employees, a whistleblower email, and the sudden retirement of a senior manager implicated in the fake interviews.
Wells Fargo stated it would continue to defend against the lawsuit and noted that previous investigations by the Department of Justice and the Securities and Exchange Commission (SEC) had closed without action. The bank reiterated its dedication to diversity, equity, and inclusion, while the lawsuit is set to proceed in the Northern District of California.
The spotlight continues to shine on the fourth-largest U.S. bank, which since 2016 has faced many complaints and public criticism over its business practices, and remains under a Federal Reserve cap on asset growth. This news is unlikely to help their case to lift this cap, but some say it could be removed as early as 2025.