‘Historic moment’ for climate justice: UN decision puts green transition in focus
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Today’s top stories
The UK is set to join an 11-member Asia-Pacific trade bloc, with accession talks for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership expected to be wrapped up by the end of the week.
The Bank of England has urged pension funds to prepare for a bond market shock more than twice as severe as they previously tested against to avoid a repeat of last year’s gilt market turmoil.
Sergio Ermotti has returned as UBS chief to steer the Credit Suisse takeover. Separately, a US congressional committee said CS had violated a 2014 plea deal with the government for its role in helping wealthy Americans evade tax.
For up-to-the-minute news updates, visit our live blog
Strap in and prepare for a bumpy ride.
That was the message to investors today from Legal and General Investment Management, the UK’s largest asset manager, which said markets were failing to price in the risks of climate change. Delaying the shift to a low-carbon economy could leave global equities a third lower than in a rapid transition, it said, with a quarter of companies that currently issue investment-grade bonds facing downgrades if a net-zero world was not achieved by 2050.
The warning is timely. It comes on the day the UN voted to clarify the legal obligations of countries to protect their populations from climate change and as the UK, labelled “strikingly unprepared” for global warming by a parliamentary committee, prepares a policy blitz around energy and net-zero goals.
The UK climate change committee’s report, one in a series of critical assessments of the government’s performance, identified multiple failures, including slow progress in cutting water consumption and leakage and the lack of a clear strategy to protect agriculture. Much more needed to be done to build in resilience against weather extremes, on everything from homes to transport, communications and energy systems, the report stated.
The government’s “energy security day” tomorrow is expected to include news on subsidies for green aviation fuel made from household waste; funding details for a new body called Great British Nuclear; an easing of onshore wind development; tweaks to oil and gas windfall taxes; and changes to green levies on electricity bills and the way prices are set. There could also be more news on green finance such as encouraging the uptake of “green gilts” — bonds that finance projects contributing to reducing emissions.
The green transition is also preoccupying policymakers in Brussels.
France wants to treat nuclear energy as equivalent to renewables so it counts towards the EU’s target of producing 40 per cent of energy from such sources by 2020. Countries such as Germany and Austria, however, said this would undermine efforts to expand solar, wind and other renewable sources. Nuclear power plants generated about two-thirds of France’s electricity output in 2022.
Negotiations are also continuing on the EU’s response to the US Inflation Reduction Act, with agreement close on allowing European battery makers to access US subsidies. The IRA had stipulated that battery components — cobalt, graphite, lithium, manganese and nickel — must come from countries with a US free trade agreement, sparking fears that European companies could lose out. The US separately yesterday signed a battery deal with Japan to help reduce supply chain dependency on China.
Today’s resolution at the UN, passed by consensus without a vote, means the International Court of Justice, its top legal body, will assess the legal obligations of countries to protect their people from climate change.
The move, which could increase the risk of litigation for those failing to adhere to existing laws and treaties, was described as a “historic moment for international climate justice”. It follows a long campaign led by Vanuatu, a Pacific island nation at risk from rising sea levels.
Need to know: UK and Europe economy
UK chancellor Jeremy Hunt suggested to a parliamentary committee that the Treasury would find new money to settle the current wave of strikes, in a significant concession to public sector workers. Hunt said yesterday he would put more money into the NHS to fund a new deal for health workers.
UK supermarket prices rose at a record 17.5 per cent in March, adding £837 to the average household’s annual bill, according to new sector data. Brits are increasingly turning to discount outlets such as Lidl and Aldi and buying cheaper own-label brands.
Ukraine’s tariff-free access to the EU has caused a grain glut in neighbouring countries, undercutting local producers and leading to complaints that Brussels is paying farmers too little compensation.
Need to know: Global economy
Chief economics commentator Martin Wolf says monetary policy alone is not solely to blame for the banking crisis. It’s a fallacy to suppose there’s a simple solution to the failings of our financial systems and economies, he argues.
Europe’s markets may be moribund but the Middle East is enjoying an IPO boom. Regulatory reforms and a privatisation push combined with political stability and rising energy prices are driving the listing frenzy and private deals.
China significantly expanded bailouts to developing countries relating to its Belt and Road Initiative, according to a new study, the first known attempt to capture the amount of its rescue lending.
North Korea is to restart diplomatic activity after three years of Covid isolation. Our visual storytelling team investigates the country’s oil smuggling activities.
Democratic Republic of Congo finance minister Nicolas Kazadi tells the FT that DRC must export more products and fewer raw materials. His country plans to double copper production and boost output of cobalt, coltan, gold and lithium. Watch the interview.
Need to know: business
Elon Musk and more than 1,000 tech experts called for a six-month “pause” on the development of advanced artificial intelligence systems such as OpenAI’s GPT to halt a “dangerous” arms race. Big Tech companies are cutting staff dedicated to AI ethics even as they start to become widely adopted in consumer products.
Alibaba is to split off logistics, cloud and local services from its main ecommerce business following an official campaign to pressure China’s tech giants to break up their empires. The move prompted a surge in Chinese tech shares this morning.
There is state pressure of another kind in Russia, where western groups leaving the country now have to pay a donation to the state, leaving them open to accusations they are funding Moscow’s war effort.
UK retailer Next warned of a “difficult year” ahead as persistent inflation hits profits.
It’s time to stop companies getting away with making consumers sick, writes commentator Anjana Ahuja. New research has shown that just four industrial sectors — tobacco, fossil fuels, ultra-processed food and alcohol — contribute to at least a third of all global deaths.
The World of Work
As more and more organisations shift to “self-service” software for things like travel and HR, a huge amount of “shadow work” is being grafted on to people’s duties without reward. We’re all secretaries now, writes columnist Sarah O’Connor.
Three years after hybrid or remote working took off, do we know yet if it’s a drain or a boost to productivity? Some may take the view that Elon Musk was right to order staff back to the office, but hybrid working helps keep staff and lowers office costs, writes columnist Pilita Clark.
Rising numbers of adults are revealing a diagnosis of neurodiversity at work and companies have a legal duty to make reasonable adjustments for them. But what’s the best way to do it? Listen to the new Working It podcast.
Some good news
“Finnish happiness is a skill. A skill that can be taught.” That’s at least according to Visit Finland, which on the back of its newly acquired status as “the world’s happiest country”, is offering a four-day masterclass to bring out your inner Finn.
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