Business

By James Davey, Victor Jack and Kylie MacLellan

LONDON (Reuters) -Britain’s retail industry warned the government on Friday that unless it moves to alleviate an acute shortage of truckers in the next 10 days then significant disruption was inevitable in the run-up to Christmas.

As the world’s fifth-largest economy emerges from COVID-19 lockdowns, a spike in European natural gas prices and a post-Brexit shortage of truck drivers have left Britain grappling with soaring energy prices and a potential food supply crunch.

BP had to close some of its gas stations due to the driver shortages while queues formed at some Shell stations as pumps ran dry in some places. ExxonMobil’s Esso said a small number of its 200 Tesco Alliance retail sites had also been impacted in some way.

In a rush to fill up, drivers also queued at some gas stations in London and the southern English county of Kent. Diesel ran out at one station visited by Reuters.

For months supermarkets, processors and farmers have warned that a shortage of heavy goods vehicle (HGV) drivers was straining supply chains to breaking point – making it harder to get goods on to shelves.

“Unless new drivers are found in the next 10 days, it is inevitable that we will see significant disruption in the run-up to Christmas,” said Andrew Opie, director of food & sustainability at the British Retail Consortium, the retail industry’s lobby group.

“HGV drivers are the glue which hold our supply chains together,” Opie said. “Without them, we are unable to move goods from farms to warehouses to shops.”

The next 10 days are crucial because retailers ramp up supplies in October to ensure there are enough goods for the peak Christmas season.

Hauliers and logistics companies cautioned that there were no quick fixes and that any change to testing or visas would likely be too late to alleviate the pre-Christmas shortages as retailers stockpile months ahead.

Prime Minister Boris Johnson’s government has insisted that there will be no return to the 1970s when Britain was cast by allies as the “sick man of Europe” with three-day weeks, energy shortages and rampant inflation.

‘DON’T PANIC’

As ministers urged the public not to panic buy, some of Britain’s biggest supermarkets have warned that the shortage of truck drivers could lead to just that ahead of Christmas.

Brazilian President Jair Bolsonaro said that Johnson, whom he met in New York, had asked him for an “emergency” agreement to supply a food product that is lacking in Britain, though the British embassy disputed Bolsonaro’s account.

Transport Secretary Grant Shapps said there was a global shortage of truckers after COVID halted lorry driver testing so Britain was doubling the number of tests. Asked if the government would ease visa rules, he said the government would look at all options.

“We’ll do whatever it takes,” Shapps told Sky News. “We’ll move heaven and earth to do whatever we can to make sure that shortages are alleviated with HGV drivers.

“We should see it smooth out fairly quickly,” he said.

British ministers are due to meet later on Friday in an attempt to hash out a fix.

TRUCKER VISA?

The trucking industry body, the Road Haulage Association (RHA), has called on the government to allow short-term visas for international drivers to enter Britain and fill the gap, while British drivers are being trained for the future.

“It’s an enormous challenge,” Rod McKenzie, head of policy at the RHA, told Reuters. In the short-term, he said, international drivers could help, even if it may be too late to help Christmas, and in the longer term the industry needed better pay and conditions to attract workers.

“It’s a tough job. We the British do not help truckers in the way that Europeans and Americans do by giving them decent facilities,” he said.

The British haulage industry says it needs around 100,000 more drivers after 25,000 returned to Europe before Brexit and the pandemic halted the qualification process for new workers.

Shapps, who said the driver shortage was not due to Brexit, said COVID-19 exacerbated the problem given that Britain was unable to test 40,000 drivers during lockdowns.

(Additional reporting by Gerhard Mey, Kate Holton, Michael Holden and Paul Sandle; Writing by Guy Faulconbridge; Editing by Toby Chopra nd Nick Macfie)

(Reuters) – Uber Technologies said it would start rolling out its pension plan to all eligible drivers in the United Kingdom, months after the ride-hailing service granted workers’ rights to its drivers in the country.

In March, Uber had reclassified its more than 70,000 drivers in Britain as workers following a Supreme Court ruling. Uber had also said it would offer guaranteed entitlements, including holiday pay, a pension plan and limited minimum wage.

On Friday, the Silicon Valley company said it would contribute 3% of a driver’s earnings into a pension plan, while drivers can choose to contribute a minimum of 5% of their qualifying earnings.

Britain’s GMB union represents Uber’s drivers in the country, and has the right to negotiate on behalf of the workforce.

Uber and GMB also urged other ride-hailing companies like Ola, Bolt and Addison Lee to offer similar benefits to their drivers.

“I am extending an invitation to work with operators such as Bolt, Addison Lee and Ola to create a cross-industry pension scheme. This will enable all drivers to save for their futures whilst working across multiple platforms,” said Jamie Heywood, an executive for Uber’s northern and eastern European region.

Uber’s drivers will be auto-enrolled in a pension scheme provided by NOW: Pensions and managed by workplace solutions provider Adecco, the company added.

(Reporting by Carolyn Cohn in London and Sabahatjahan Contractor, Shubham Kalia in Bengaluru; Editing by Anil D’Silva)

By Sarah Young, Conor Humphries and Tim Hepher

LONDON/TOULOUSE (Reuters) – Jetmakers see strong demand for airliners even as the industry braces for tough new environmental measures, but some financiers have raised doubts over forecasts that the $150 billion industry will return to pre-COVID growth in just a few years.

Lessors and underwriters of securities that finance aircraft purchases met in London this week to survey COVID damage and contemplate the impact of moves to combat climate change through regulation and new technology.

Some speculated that the industry’s deepest fear could come true: These trends might shorten the operational lifespan – and hurt the valuations – of even the most modern aircraft.

If confirmed, that could upend assumptions that have made the dollar-based jet industry an investor hot spot for a decade.

BOEING FORECAST

After trimming forecasts at the height of the pandemic, Boeing last week increased its 20-year demand forecast, citing the swift U.S. economic recovery. Once a pandemic travel slump disappears by around 2024, it said annual demand growth would resume a long-term trend of 4%-5%.

At a London conference of the leasing industry, which buys around 60% of global jet output, Boeing downplayed fears of a structural contraction of business and leisure travel.

“With business travel, I think it’s hard for me to believe that it won’t be back to where it was,” said Darren Hulst, Boeing vice president for commercial marketing.

Airbus, laying out its vision for more sustainable flying at a two-day company conference in Toulouse, was more cautious ahead of its own outlook update expected in November.

“We are still scratching our heads trying to best factor in all the things that have changed recently in the world and in our sector,” said Chief Executive Guillaume Faury.

Climate concerns will have “an impact, a significant impact, but the demand remains very strong and we have seen this all around the world,” he added.

DEMAND SCEPTICISM

But at the Airline Economics and Airfinance Journal conferences, which both attracted just a small fraction of the 2,000 or so delegates who usually attend, many participants believed the industry would see slower growth than Boeing and some suppliers have forecast, at least in more mature markets.

One senior aerospace executive said that COVID-19 had cost the industry five years of growth in the short term. And post-COVID, long-term growth could be slower than historical trends notably because of pressure from environmental measures.

Some analysts agree. “It will take a long while for people to get back to the comfort that they had in 2019 about international travel,” said Peter Morris, chief economist at Ascend by Cirium, which provides data analytics to the industry.

“I think we’d be more cautious” than Boeing, he said.

REGULATION AND ASSET VALUES

In the background, delegates fretted whether environmental regulation and faster technological change shorten the lifespan – and undermine the valuation – of the most popular jets.

The COVID crisis has already hit the values of Airbus and Boeing’s most popular mid-life planes, the A320ceo and the 737NG, as airlines seek newer jets to save fuel in an increasingly competitive and tightly regulated market.

That generation of jets “might need a price reckoning,” said Simon Clements, executive vice president at Novus Aviation Capital, referring to resale valuations that drive the sector.

An even bigger question is whether the current generation of short-haul jets – the 737MAX and the A320neo – may face shorter service lives as urgent efforts to address climate change hasten the arrival of technology that is more sustainable.

Any shortening of the roughly 25-year life cycle used by valuers to depreciate assets could affect future sales.

“We are getting a lot of questions about will that mean you’re going to not be able to use the MAX, and the neo for 25 years?” said Phil Seymour, president of consultancy IBA.

Already the average age of jet retirement for the industry as a whole has dipped from around 30 years in 2008 to just over 25 years last year, according to Ascend by Cirium’s Rob Morris.

Leasing models now assume an aircraft retains 10% of its original value after 25 years, but that could be shortened to 20 years if valuations shrink, Seymour said.

British low-cost airline easyJet this month said it was reducing the assumption for the time jets stay in its fleet to 18 years from 23. But its chief executive told Reuters this was an accounting matter rather than a verdict on jet lifespans.

Bond investors, hungry for yield, appear to be willing to accept the risks, said Marjan Riggi, managing director, Kroll bond ratings. “Every time an aviation deal goes out there, it is snapped up just like that,” she said.

(Writing by Conor Humphries; Editing by Cynthia Osterman)

By Timothy Gardner

WASHINGTON (Reuters) -U.S. oil majors Exxon Mobil Corp and Chevron Corp have failed to meet a core transparency standard set by the Extractive Industries Transparency Initiative, a global anti-corruption body on which the companies have board seats, EITI said on Wednesday.

Exxon and Chevron have declined to publicly disclose taxes and other payments they have made to governments in the countries where they operate that are not EITI members, the group said in a spreadsheet detailing member company adherence to its standards.

Norway-based EITI, founded two decades ago, has about 55 country members. It implements voluntary global standards to promote open and accountable management of oil, gas and mineral resources to prevent corruption in all resource-rich countries.

Countries that Exxon has operated in that are not EITI members include Qatar, Pakistan and India, according to its company website. Non-EITI countries that Chevron has operated in include China and Angola.

ConocoPhillips, which is not on the EITI board, is another member that does not disclose payments to countries not in EITI, the group said. It has had operations in countries including Libya, Malaysia and China.

Exxon spokesperson Casey Norton said Exxon complies with all laws that are in effect today.

Chevron “supports efforts to promote revenue transparency that do not competitively disadvantage impacted companies and their shareholders,” spokesperson Sean Comey said.

Conoco spokesperson Dennis Nuss said the company had no comment.

EITI’s release, based on publicly available information, could add pressure to the companies, already under fire from shareholders, activists and lawmakers for greenhouse gas emissions driving climate change.

It also highlights a widening governance rift between U.S.-based oil majors and those in Europe, which are widely seen to be doing better on climate and transparency.

European-based companies BP, Shell and Total all publicly disclose their taxes and payments to non-EITI countries, the group said.

EITI published the data for the first time since the standards were introduced in 2018, after pressure from civil society groups including Publish What You Pay-US (PWYP-US) and Oxfam America.

It is not mandatory that the companies, which as EITI members make annual payments to help fund the group’s management, follow the group’s standards.

But EITI Board Chair Helen Clark said in July, without elaborating, that the board’s oversight committee would consider consequences for companies not meeting the group’s expectations, possibly in October.

Clark said on Wednesday that publication of the companies not following expectations will help EITI members “engage in dialogue to improve corporate accountability and transparency.” She said work remains to clarify the expectations, “but our hope is that it will encourage a ‘race to the top’ to meet or exceed them.”

The U.S. Securities and Exchange Commission is set to consider in April implementing a measure of the 2010 Wall Street reform law known as Dodd Frank that would require disclosures from energy and mining companies on payments to all foreign governments.

PWYP-US said the U.S. companies supporting EITI were getting the reputational benefit of EITI participation without meeting the basic expectations for membership.

EITI’s company members and particularly those on its board must ensure that group’s credibility is not weakened by companies that are not being transparent, said Carly Oboth, PWYP-US interim director.

“Otherwise, it will be clear that this global transparency initiative has become a victim of corporate capture,” Oboth said.

(Reporting by Timothy GardnerEditing by Marguerita Choy, Steve Orlofsky, David Gregorio and Cynthia Osterman)

By: Jessica Camus, Chief Corporate Affairs Officer, Diginex

Jessica Camus, Chief Corporate Affairs Officer,  Diginex

Growing awareness around sustainability and social responsibility has led to a greater emphasis on Environmental, Social and Corporate Governance (ESG) in financial services. With ESG funds in the US alone capturing more than $50 billion of new money in 2020 – more than double the previous year – it’s hardly surprising that ESG reporting is now considered an industry standard that all companies should follow. 

But many businesses, especially those at earlier stages, don’t often have the resources needed to source, analyse, and present the data necessary for this reporting. There is technology now available, to help address these challenges and enable all companies, regardless of their size and maturity, to share the insight into their ESG practices investors now demand. 

 Sustainability credentials now longer a “nice-to-have”

Concerns around issues such as climate change and diversity mean ESG credentials have become more influential in an investor’s decision-making processes. No longer considered as niche impact investments or small stand-alone funds, ESG investing is now very much mainstream – and it’s paying off. In 2021, for example, 90 percent of European investment manager Candriam’s net sales came from ESG products, compared with between 50 and 60 percent over the previous three years. As a result, its total assets rose by more than 7 per cent in the first six months of the year, boosted by net inflows into its ESG-focused funds.  

Indeed, with strong ESG practices reflecting lower investment risk and resulting in significant improvement in operational performance, ESG is now imperative for businesses of all sizes. Today, under rising pressure from consumers and regulators, businesses are increasingly required to showcase their ESG efforts, adhering to industry reporting frameworks in order to remain compliant with regulations as well as enhancing their reputation for sustainability and social awareness. 

The requirements of this reporting can be a significant undertaking, though, especially for Small and Medium Enterprises (SMEs), many of whom have limited time and financial resources. 

 Challenges in ESG reporting for SMEs 

Producing an ESG report can take months to complete. Many companies just don’t have that time available when it could be better spent focusing on their growth and operations. Matters are complicated further by a general lack of knowledge around ESG reporting. As a relatively new concept, there is as yet, no single standardised and universally recognised approach. Knowing where to start, who to talk to, and how to identify and report on the issues that stakeholders care most about can be overwhelming. 

Most companies will therefore employ external consultants to identify and analyse their ESG data and compile an investor-friendly report. But this can cost tens of thousands of pounds – entirely unaffordable for many SMEs. Given that consumers, investors, and stakeholders are all holding business to account over their ESG practices, this means these SMEs will find it difficult to secure funding and retain customers. Additionally, investors who don’t have access to these reports will lack the insight needed to identify the potential returns on a sustainable business – ultimately limiting the pool of companies they may want to invest in. 

Fortunately, SMEs now have technology options available to address these challenges – creating meaningful and insightful ESG reports that will not only benefit their growth prospects but also increase the number of opportunities for the wider investment community. 

Leveraging technology to fast -tack reporting  

Removing significant barriers to ESG reporting that many SMEs are unable to access. Achieving this requires approaching processes for ESG reporting with a more technology-centric mindset. This not only helps automate and validate the data gathering process but also significantly reduces the price point needed to produce an ESG report. 

Technology such as blockchain can be an effective tool in managing the ESG reporting process. The blockchain’s immutable nature makes it easier to accurately audit and verify the data to ensure it’s accurate. This way, it’s possible to ‘cut out the middle man’ in the form of the external consultant, sourcing high-quality data at a fraction of the time and money it would take using traditional manual processes. 

However, to effectively use any technology, the SME needs to understand what needs to be measured. This materiality assessment will underpin any ESG report produced, identifying the factors that stakeholders value as well as what competitors in the same industry are measuring.  This is a fundamental part of the ESG report and should be the first step that any company takes when starting its ESG journey. 

ESG is maturing and becoming a standard for businesses everywhere. With less time and resources spent on their ESG data collection, allows many smaller businesses to access new funding opportunities. Likewise, investors can ramp up on their sustainability – focused investments by accessing higher quality data. By enabling any business, regardless of its size, to produce meaningful reports leveraging innovative technology, ESG reporting becomes more democratised for businesses, investors and society at large to benefit.

By Hilary Russ

(Reuters) -McDonald’s Corp said on Tuesday it will drastically cut the use of plastic in the more than 1 billion children’s toys it sells globally each year by the end of 2025.

The change involves swapping out a plastic figurine of Batman, for example, for one made with a dozen cardboard pieces that kids can put together themselves.

More toys will also be made from recycled or plant-based plastics, McDonald’s said. The changes will allow the Chicago-based company to cut its use of virgin fossil fuel-based plastic for Happy Meals by 90% compared with 2018.

McDonald’s is one of many restaurant chains aiming to reduce environmental harm from packaging and other products.

Burger King, a unit of Restaurant Brands International Inc, said in 2019 that it would stop giving out free plastic toys and that customers could return existing ones to be melted down and used as trays and other items.

Stephanie Feldstein, population and sustainability director at the Center for Biological Diversity, said in a statement that if McDonald’s really wanted to be more sustainable it should reduce the amount of beef it serves and “stop nibbling around the edges of sustainability.”

McDonald’s, which started selling Happy Meals in 1979, shifted to more sustainable toys in the UK, Ireland and France in 2018.

Some similar toys will soon make their way to the more than 100 other countries where Happy Meals are sold.

In the United States, McDonald’s is already using some sustainable toys, including books and Pokemon collectible cards.

More such toys will hit the U.S. market in January, said Amy Murray, vice president of global marketing enablement. The revamped Happy Meals will not cost franchisees more money, she said.

(Reporting by Hilary Russ; editing by Richard Pullin and Bill Berkrot)

By Tim Hepher

TOULOUSE, France (Reuters) – Airbus <AIR.Pa> is in talks with several potential customers for a new A350 freighter while seeing signs of demand for smaller A320 passenger jets in Europe, its sales chief said on Tuesday.

With e-commerce booming, Airbus formally began marketing a proposed freight variant of its A350 passenger jet in July, taking aim at Boeing’s tight grip on the global cargo market.

“We are in a number of very encouraging discussions,” Chief Commercial Officer Christian Scherer told reporters in Toulouse, where the European planemaker is based.

“It is available for sale and is selling,” he added.

Boeing has for years dominated the market for purpose-built freighters, even as its European rival grabbed the crown as the world’s largest maker of passenger jets.

Boeing is preparing to launch its own new freighter, a cargo version of its upcoming 777X jetliner, industry sources say.

Freighters can sell for higher prices than passenger planes and help to prop up depressed production for wide-body models at a time when long-haul travel is weak, industry experts say.

While demand for wide-body passenger jets remains stagnant, demand for smaller planes used in regional and domestic markets is rising.

“Demand is coming back,” Scherer said. “We need to be very careful – we are not out of the woods and we are still in a very fragile environment – but Europe is rallying quite nicely at this moment.”

Airbus plans to increase production of the medium-haul A320neo family, which competes with Boeing’s 737 MAX, to a record 63 a month from 40 now, surpassing pre-crisis levels.

It has said it is also looking at pushing output as high as 75 a month, but such levels have drawn concerns about supply chains from engine makers like France’s Safran.

Scherer defended the existing production commitments, which he said were justified by contracts with airlines even after an industry shakeout brought about by the coronavirusus crisis.

“If anything in my world I am challenging them to be steeper,” he said.

Airbus is talking to Hungary’s Wizz Air over a sale of at least 100 more narrowbody jets, Reuters reported earlier this month.

Among other European prospects, British Airways parent IAG has reopened a fresh competition between Airbus and Boeing for narrowbody jets, revisiting a large provisional order for 200 MAX jets that was never finalised, the sources said.

Finnair is looking at a narrowbody purchase but a formal tender has yet to be launched.

Air France-KLM in July said it had launched a tender to extend the medium-haul fleets of Dutch unit KLM and the French and Dutch arms of low-cost subsidiary Transavia.

(Reporting By Tim Hepher in Toulouse; Editing by David Gregorio)

(Reuters) -Hong Kong’s Cathay Pacific Airways Ltd said on Monday it had lowered its passenger capacity forecast for the remainder of the year to 13% of pre-COVID levels, down from an earlier 30% target for the fourth quarter as travel restrictions linger.

The airline said it continued to target cash burn of less than HK$1 billion ($130 million) a month for the rest of the year.

Hong Kong lacks a domestic aviation market and has some of the world’s toughest pandemic-related travel restrictions.

The city requires fully vaccinated travellers from destinations considered “high-risk”, including the United States and Britain, to spend three weeks in hotel quarantine.

Cathay last month said its target of reaching 30% of pre-COVID passenger capacity in the fourth quarter hinged on quarantine rules for passengers and crew being relaxed.

Passenger numbers in August were better than in previous months because of strong student traffic from China to the United States and Britain but were 95.3% below the same month in 2019, the airline said.

Cathay said the cargo market strengthened in August, with freighter demand ramping up to peak season levels.

Air cargo accounted for 80% of the airline’s revenue in the first half of the year due to the pandemic-related hit to passenger demand.

($1 = 7.7875 Hong Kong dollars)

(Reporting by Jamie Freed in Sydney; Editing by Tom Hogue and Gerry Doyle)

By Ron Bousso

LONDON (Reuters) – Royal Dutch Shell plans to start producing low-carbon jet fuel at scale by 2025, in an attempt to encourage the world’s airlines to reduce greenhouse gas emissions.

Aviation, accounting for 3% of the world’s carbon emissions, is considered one of the toughest sectors to tackle due to a lack of alternative technologies to jet fueled-engines.

Shell, one of the world’s largest oil traders, said it aims to produce 2 million tonnes of sustainable aviation fuel (SAF) by 2025, a ten-fold increase from today’s total global output.

Produced from waste cooking oil, plants and animal fats, SAF could cut up to 80% of aviation emissions, Shell said.

Shell, which at present only supplies SAF produced by others, including Finnish refiner Neste, said on Monday it wants green jet fuel, which can be blended with regular aviation fuel with little need to change plane engines, to make up 10% of its global aviation fuel sales by 2030.

SAF accounts for less than 0.1% of today’s global aviation fuel demand, which reached around 330 million tonnes in 2019, investment bank Jefferies said.

Growing the market faces several hurdles, primarily due to the cost of SAF, which is currently up to 8 times higher than regular jet fuel, and the limited availability of feedstock.

Shell said it wants others to follow its lead.

“We also expect other companies to add to it with their own production plants,” Anna Mascolo, head of Shell Aviation, told Reuters.

The United States said last week it wants to cut aircraft greenhouse-gas emissions by 20% by the end of the decade by significantly boosting SAF usage.

Graphic – Global aviation emissions: https://graphics.reuters.com/SHELL-AVIATION/dwvkrdawmpm/chart.png

NEW PRODUCTION

Anglo-Dutch shell, which aims to reduce emissions from fuels it sells to net zero by 2050, is in the midst of a large overhaul aimed at producing more low-carbon fuels such as biodiesel and SAF, as well as hydrogen.

Shell plans to build a biofuels processing plant at its Rotterdam refinery with an annual capacity of 820,000 tonnes, with SAF set to make up more than half of the output. The plant is expected to start production in 2024.

In a new report on the decarbonisation of aviation published together with Deloitte, Shell called for the sector to cut its emissions to net zero by 2050.

The International Air Transport Association, representing most of the world’s airlines, aims to halve emissions by then.

Reducing emissions to net zero can be achieved by using more low-carbon fuel and offsetting the remaining emissions through carbon credits.

Shell is also developing synthetic aviation fuel made from hydrogen and recycled carbon.

“Sustainable aviation fuel, whether bio SAF or synthetic SAF, remains the single biggest solution,” Mascolo said.

(Reporting by Ron Bousso; Editing by Alexander Smith)