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Green investors to step up pressure on U.S. utilities after court ruling

By Reuters_News

18:57, 1 July 2022

People hold signs as they protest against U.S. Senator Joe Manchin (D-WV) as they blockade the Grant Town Coal Waste Power Plant in Grant Town, West Virginia, U.S., April 9, 2022.
People hold signs as they protest against U.S. Senator Joe Manchin (D-WV) as they blockade the Grant Town Coal Waste Power Plant in Grant Town, West Virginia, U.S., April 9, 2022.

By Ross Kerber

- Activist investment leaders who have urged U.S. companies to cut carbon emissions said on Friday they expect more such efforts following a milestone U.S. Supreme Court ruling on Thursday that diminished the power of federal environmental regulators.

By constraining the U.S. Environmental Protection Agency's authority to regulate greenhouse gas emissions from coal- and gas-fired power plants, the court put responsibility on investors looking to slow climate change, said Andrew Behar, chief executive of the nonprofit group As You Sow, a which often files shareholder resolutions.

Investors will likely launch more engagements with companies ahead of the 2023 annual meeting season, Behar said, adding that executives lately have been more receptive to suggested changes.

"All the models say climate change will be bad for business," Behar said in an interview. The court's ruling, he said, means that "corporations have even more responsibility to their stakeholders" to limit emissions.

Climate issues have gained new attention from top asset managers and executives as investors pour new cash into funds that use environmental, social and governance (ESG) metrics to pick stocks.

For instance among top U.S. utilities this year, Duke Energy DUK.N vowed to cut more emissions and Southern Co SO.N agreed to disclose more emissions details as part of deals with investors, according to As You Sow.

Via e-mail a Duke representative said "we and many of our stakeholders share the view that we can take a leadership role in tackling greenhouse gas emissions associated with our business."

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Southern did not immediately comment.

Mindy Lubber, president of Ceres, a Boston climate advocacy group that works with asset managers and others, said having invested heavily in clean power technologies like solar panels and battery storage, utilities won't likely change course whatever regulations are limited by the court's decision.

"Everything is not going to stop and go backwards just because of the Supreme Court ruling," Lubber said. Rather, utilities could face tougher requests from shareholders next year such as calls for more specific emission cut schedules or reviews of their lobbying activities, she said.

Thursday's ruling reduced the power of officials to use the landmark Clean Air Act anti-pollution law. It is likely to have implications beyond the EPA as it raises new legal questions about any big decisions made by federal agencies.

For instance the ruling could also spell trouble for an effort by a U.S. Securities and Exchange Commission to force companies to disclose their emissions, legal experts said.

Investors have looked to standardized disclosures as a way to pressure heavy emitters.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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