The war on ESG

It’s working. While ESG bonds continue their upward trajectory globally and across Europe, in America they’re getting hammered by politics. ESG proponents howl that the Republican Party’s attacks are meant to mollify financial backers led by Big Oil while making hay on cultural issues with a far-right base, but the war is bearing empirical fruit. Companies sold only $6 billion of bonds last quarter to pay for projects that help the environment, achieve a social goal, or improve their governance. That’s down more than 50% from the same time last year, according to data compiled by Bloomberg. Moreover, some states are barring external asset managers that oversee public pension funds from considering ESG criteria. That could be making skittish borrowers even less interested in ESG debt.

But there’s more to the downdraft, and it’s less about politics than greed. Money managers are increasing their scrutiny of some ESG bonds, fearful of being swept away on the rising tide of greenwashing. That’s particularly an issue for sustainability-linked bonds, which can reward companies for meeting environmental goals by, say, cutting their required interest payments, or punish them for failing to do so. Proceeds of debt offerings can often be used for anything the company wants, instead of being tied to a particular projects. “Before, ESG could do no wrong,” said Andrew Poreda, a senior research analyst at Sage Advisory Services. “Now there’s more skepticism.” —Margaret Sutherlin and David E. Rovella

For many years, US banks saw credit losses fell to record lows. Now, after a year of high inflation and dwindling household savings, Americans are once again falling behind on payments. The four biggest US lenders wrote off a combined $3.4 billion in bad consumer loans in the first three months of 2023, a 73% increase from a year earlier. While inflation has declined this year, the damage was already done: Some Americans are turning to buy-now, pay-later apps for everyday items. Here’s your markets wrap.

Fox News agreed to settle Dominion Voting System’s $1.6 billion defamation lawsuit alleging the cable channel defamed it by airing falsehoods—echoed by Donald Trump and his adjutants—that it helped rig the 2020 presidential election. Fox, run by Australian billionaire Rupert Murdoch, agreed to pay $787.5 million.

Ron DeSantis has a plan to outmaneuver Trump to the nomination: Push Florida and the GOP further to the right. In that state, where the party has a tight grip on power, DeSantis’s moves to limit education, ban books and almost outlaw abortion are part of broader transformation, one that’s changing the state into a far-right nirvana. Though some in the GOP now fear that’s something that won’t work so well come 2024.

Business is booming in India’s $117 billion education industry and new colleges are popping up at breakneck speed. Yet thousands of young Indians are finding themselves graduating with limited or no skills, undercutting the economy at a pivotal moment of growth.

For a second day, Ukraine said its crop shipments through a safe-passage corridor agreed to last year remained suspended, adding to uncertainty about future supplies from one of the world’s breadbaskets. Kremlin leader Vladimir Putin visited two areas of occupied Ukraine Tuesday just as it’s become clear Russia failed to gain much ground in a winter offensive that killed thousands of its forces. Despite doubts from allies, Ukrainian forces are preparing to mount an offensive of their own, one Kyiv hopes will provide a decisive breakthrough.

Top-ranking Sudanese army officials appeared to contradict each other about whether the military would abide by a 24-hour cease-fire as heavy fighting rocked Khartoum for a fourth day. Nearly 200 people have been killed and 1,800 wounded as rival leaders have fought for government control, setting back hopes of a return to civilian rule after a 2021 coup.

European Union negotiators agreed on a final version of a €43 billion ($47.2 billion) plan to make Europe a key player in a global race to ramp up the production of semiconductors. Meanwhile over at Apple, they’re racing to build a trove of software and services for its upcoming mixed-reality headset, seeking to win over potentially wary consumers with apps that use the device’s novel 3D interface.

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

Where are the most millionaires in the world? New York City came out on top again in an annual ranking, with a total of 340,000. But it’s 2023, so the real question is which city took home the title for most billionaires.

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