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Fusion power has always been something studied in physics classes, but in reality it has always been out of reach. Until now, perhaps. The Biden administration said yesterday that US scientists achieved an energy gain from a fusion reaction for the first time. Tuesday’s announcement undoubtedly makes 2022 the biggest year in energy in my lifetime. As Gillian mentioned on Monday, the possibility of fusion as a source of clean energy (or broadly any energy source that does not come from Russia) will immediately draw investors. We will be watching this space closely.
I wanted to begin today with a bit of breaking news. The Climate Bonds Initiative, a non-profit organisation that promotes investments to combat global warming, said today one out of every $4 issued in green bonds this year was not actually green. This means a whopping $106.2bn of the market was not green (by CBI’s standards) because there was not enough information about the issuer or the use-of-proceeds lacked real ambition, CBI said. The problematic deals were mostly issued from China, the US and Germany.
In today’s newsletter, Tamami tells us how K-pop fans are emerging as a powerful force for sustainability. My item dampens today’s party with taxes (sorry) and the sustainable investing fight at US technology giants over their tax disclosures. Please read on. (Patrick Temple-West)
K-pop fans unleash their power on Korean streaming services
K-pop fans are famous for their ability to coalesce around an artist or group to push their favourite singers to the top of the music charts. They are now deploying their organising prowess to pressure corporations to do more on climate change.
In October, the South Korean National Assembly held a seminar about how to make the K-pop industry more sustainable, following pressure from K-pop fans to reduce carbon emissions from major music streaming services in Korea. Speaking at the seminar, Naver, the Korean tech giant that owns music streaming service Vibe, called for national expansion of renewable energy to meet demand by industries.
Action had first ramped up in July, when the K-pop fan-led climate group Kpop4planet launched a campaign called “Streaming Heating Melting”, which demands streaming services use more renewable energy to reduce their reliance on fossil fuels. The campaign later delivered a petition from more than 10,000 fans to five streaming companies in September.
Korean streaming platforms “lag behind in comparison to other global music streaming services, such as Apple Music which has already achieved 100 per cent renewables,” 20-year-old campaigner at Kpop4planet Da-yeon Lee told Moral Money. Greenpeace’s 2021 report on climate actions and commitments gave an ‘F’ grade to Kakao, a Korean internet company which operates the country’s largest streaming service, Melon. In a similar assessment, Apple received an ‘A+’.
Streaming companies can’t afford to ignore some of their most active users. Most of these companies which received the petition have engaged with the campaign in some form, whether officially or unofficially, Kpop4planet said.
Lim Dong-a, executive officer of the environment programme at Naver, a Korean tech giant that owns a music streaming service Vibe, said that the company values the perspective of the digital-native generation. Last summer Naver became the first Korean information technology company to join the global RE 100 initiative, which commits corporate members to use 100 per cent renewables.
It’s not the first time that K-pop fans have engaged in activism. In support of the Black Lives Matter movement ignited by George Floyd’s death in 2020, K-pop fans acted en masse to block racist and offensive posts online. In the same year, fans stunned an arena in Tulsa, Oklahoma, after they booked up tickets to a Donald Trump rally that they had no plans to attend.
Next year, the campaign is planning to expand its activism to the wider music and fashion industries. It will aim to set an example for low-carbon emission practices at concerts and festivals and also bring its scrutiny to the fashion sector — which has faced allegations of workers’ rights violations and poor sustainability measures. Even with the popular band BTS on hiatus for required military duty, K-pop climate activism shows no sign of slowing down in 2023. (Tamami Shimizuishi, Nikkei)
Corporate tax bills rise up the ESG agenda
The US technology giants have traditionally been the darlings of environmental, social and governance (ESG) investors. They have relatively low carbon emissions, and — though they have increasingly faced fire for labour or human rights concerns — technology companies remain the largest holdings in the world’s biggest ESG funds.
But Big Tech has been a little too good at playing tax arbitrage. The UK and other European countries have fought for years to try to get the major US tech players to pay them more in taxes. With 136 countries fighting for a global minimum effective corporate tax rate, US technology companies are squarely in the crosshairs.
The fear of higher tax bills has investors worried, and demands for greater tax transparency from tech giants are growing louder.
On Friday, Cisco disclosed that more than a quarter of its shareholders supported a shareholder proposal demanding country-by-country tax reporting. More than 20 per cent of shareholders voted in favour of a similar proposal at Amazon earlier this year.
And on Tuesday, Microsoft faced a fresh tax transparency challenge. Danish pension fund AkademikerPension sponsored the petition, which alleges that investors do not have enough information about Microsoft’s vulnerability to tax reform. Norway’s pension fund has already voiced its support for this proposal. At its annual meeting on Tuesday, Microsoft did not announce the vote totals for the shareholder proposals it faced, but it will be required to publish this information by the end of the week.
The company said in a statement that it supports new tax transparency requirements, and that it will comply with additional reporting requirements as they come into force.
Tax payments as a regulatory disclosure issue emerged as a topic at a Securities and Exchange Commission meeting on Thursday, when chair Gary Gensler said investors have started asking for more tax information and that more details from companies “could benefit investors.”
As countries in the OECD push for tech company taxes, investors need to be kept abreast of all the changes, Ryan Gurule, policy director at the tax transparency FACT coalition, told Moral Money after he presented at Thursday’s SEC meeting.
“Companies are going to get hit,” he said, and it would be helpful to have more corporate tax information to determine “what constitutes sustainable tax practices” that won’t get companies in trouble.
The Microsoft results will be a crucial test. (Patrick Temple-West)
Please read the FT editorial on Tuesday’s fusion announcement. “Proponents of generating clean energy from nuclear fusion, the reaction that powers the Sun, have had to live for decades with the taunt that a commercial fusion plant always seems to lie 30 years in the future,” our editors write. “But the chances that the timescale might become considerably shorter rose with the official announcement on Tuesday that, for the first time, the energy output from an experimental reactor had exceeded the input.”
How effective is your company at combating climate change? The FT and data provider Statista are currently compiling the 2023 editions of Europe’s Climate Leaders and Asia-Pacific Climate Leaders — two surveys listing the businesses that have gone furthest in reducing their carbon emissions intensity. If you think your company might be eligible, please click through to the Europe and Asia-Pacific calls for entries, where you can find details of how to participate.
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