☀️☕️ Ungreener Unilever

📝 Focus

• Ungreener Unilever

📊 In the Markets

• Epic win for Epic over Google

📖 MoneyFitt Explains

• 🎓️ ESG investing vs Greenwashing

💸 Personal Finance Corner

• Investing in Bonds: Pros and Cons to Consider

📝 Focus

Ungreener Unilever 

The UK’s Competition and Markets Authority (CMA) has launched a “greenwashing” investigation into British multinational Unilever, which makes household essentials like Ben & Jerry’s, Domestos, Cif, Marmite, Rexona/Lynx, Persil, Dove and Vaseline. Greenwashing is a deceptive marketing practice that involves unsubstantiated claims about sustainable product or service attributes. 

The CMA believes the fast-moving consumer goods (FMCG) company’s "green" assertions on products may mislead consumers and is focusing the investigation into Unilever's alleged use of “vague and broad” claims, unclear recyclability statements and misleading natural imagery like green leaves to make certain items like detergent and toiletries look more environmentally friendly. 

A Greenpeace report showed that Unilever would sell 53bn non-reusable sachets containing anything from sauces to shampoo this year, breaking its commitment to switch away from single-use plastic, while The Changing Markets Foundation reported that Unilever had replaced recyclable PET bottles of washing liquid with non-recyclable pouches for refills.

..... ▷ The Unilever greenwashing investigation is part of a wider probe into greenwashing that the CMA began earlier this year.

Companies often use vague language, misleading visuals or even false claims to make themselves seem eco-friendly while providing no clear information about their environmental impact to capitalise on the growing demand for environmentally sound products.

Selective disclosure and symbolic actions are two of the main forms of greenwashing. Vague terms like "natural" or "environmentally conscious" are often used without concrete evidence, like independent certifications or data-backed claims. 

..... ▷ Worse, by focusing on image over action, greenwashing distracts from the urgent need for genuine environmental progress, delaying the adoption of truly sustainable practices.

In other words, Greenwashing can be a way for companies to continue or expand their polluting as well as related harmful behaviours, all while gaming the system or profiting off well-intentioned, sustainably minded consumers as well as ESG🎓 investors.  

..... ▷ According to a report by Bloomberg, global ESG🎓 assets are on track to exceed $53 trillion by 2025, more than a third of the $140.5 trillion in projected total assets under management. 

Third-party rating organisations like MSCI, Sustainalytics and Bloomberg assess companies on their ESG🎓 (Environmental, Social, and Governance) qualities. 

However, there is no single, unified standard or methodology behind ESG ratings. This lack of standardisation has led to concerns about greenwashing. 

To address these concerns, third-party ESG rating providers have been working to enhance transparency and standardisation in their methodologies, investing in robust data collection, analysis protocols and verification pathways to ensure the accuracy of reported data.

..... ▷ The SEC’s Division of Enforcement has a Climate and ESG Task Force which analyses disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies. 

The SEC has also adopted new rules to crack down on deceptive or misleading marketing practices by US investment funds, including those related to ESG. 

The US Federal Trade Commission (FTC) provides guidelines for environmental marketing claims. The guidelines are “voluntary” but do give the FTC the right to prosecute false and misleading claims. 

The European Anti-Fraud Office (OLAF) handles investigations that have an environmental or sustainability element in Europe, while in the UK, The Competition and Markets Authority published the Green Claims Code in September 2021.

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📊 In the Markets

After Germany's DAX and France's CAC-40 indexes briefly touched record highs, European markets softened on the US CPI report, leading the pan-European STOXX 600 index to close down 0.21% on Tuesday. 

The US Labor Department's Consumer Price Index (CPI) unexpectedly inched higher on a monthly basis in November but slightly lower on an annual basis. Core prices, excluding volatile food and energy, matched predictions with a 4% yearly increase and a 0.1% monthly uptick.

Shortly after the release, traders focused on the monthly pickup, raising concerns that inflation may be taking longer than hoped to return to the Fed's 2% target and, hence, a higher chance that the Fed would keep rates higher for longer.

But later trading saw US stocks hit yearly highs as the annual inflation data didn't materially shift expectations for a rate cut next May. 

Meanwhile, the US central bank's final policy decision of the year will be released on Wednesday, with ECB and Bank of England decisions following on Thursday.

Oracle's stock dropped 12.44% after forecasting lower-than-expected third-quarter revenue, and Google's parent, Alphabet, fell 0.58% following a loss in a high-profile antitrust trial against Epic Games. (Below)

Oil tumbled on concerns about excess supply and slowing demand despite supply risks due to escalating tensions in the Middle East. Global benchmark Brent crude futures for February sold off 3.7% to $73.24 a barrel. 

Epic win for Epic over Google

A federal jury ruled against Google in Epic Games’ lawsuit, accusing the tech giant of illegally restraining competition in the Android app market to secure profits from its Play Store.

The verdict focused on whether Google hindered Play Store rivals on Android devices, hurting consumers and software developers, with a key factor being deleted chats detailing secret deals with app makers.  

Epic alleges that Google's excessive fees led to a $12 billion 2021 profit and sought an alternative billing method to bypass Google's charges. Google plans to appeal, emphasising the Android OS's openness. 

..... ▷ Epic sees the verdict as a call for legislation to address Apple and Google's app ecosystem duopoly.

Its CEO criticised the industry's standard 30% commission fee, which is charged on the annual $200bn app market. 

..... ▷ The Fortnite publisher lost its equivalent battle with Apple in 2021 because a judge ruled that Apple made the hardware for its iOS, but Google licences out its operating system, targeting deals with manufacturers and networks. (The Apple ruling is being appealed to the Supreme Court.)