Today’s ESG Updates
- Hardware Stocks Retreat: Despite continued strength in chip manufacturing, investors pulled back amid concerns the sector had become overheated.
- Oil & Gas Firms Push Back on EU Regulations: Industry groups criticized the Commission’s approach, while the EU signaled it will assess the impact of current rules before considering revisions, but the new regulatory decisions seem too harsh.
- AliExpress Fined Under the Digital Services Act: The platform was hit with a €500M+ penalty after regulators found shortcomings in its risk-detection and compliance systems.
- Australia Faces Snow Shortage: Unseasonably warm temperatures have left ski resorts with limited snowfall, disrupting the country’s winter tourism season.
Semiconductor companies are under financial pressure
PHLX Semiconductor Index is up by 65% this year but is down 18% this month alone and is swinging more than 3% in half of the month’s sessions. Even record profits are not enough to impress, as TSMC is trading down following its 77% earnings beat, while Samsung is down sharply even with a 19x rise in operating income.
S&P 500 semiconductor companies are expected to see 133% growth in second quarter earnings and account for 44% of the total earnings gain of the index. Yet no buyers are willing to pay even the highest price. Volatility has been inflated by leveraged ETFs and retail options activity to levels that “rhyme” with the March 2000 peak. The South Korean regulator has decided to step in and ban single-stock leveraged funds linked to Samsung and SK Hynix.
“This chip demand for AI is not a forever scenario,” says one portfolio manager. This trend raises the question of how sustainable and realistic the new, overly ambitious construction plans across the whole sphere of AI are.
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Further reading: Chipmakers head for big profit gains, but will it be enough?
Klimado – Navigating climate complexity just got easier. Klimado offers a user-friendly platform for tracking local and global environmental shifts, making it an essential tool for climate-aware individuals and organizations.
EU implements strict regulations on oil and gas
With its methane emissions tracing legislation coming into effect at the start of next year, the EU is becoming extremely harsh with fossil fuel exporters. Oil and gas companies threaten to reroute their shipments rather than risk sanctions from Brussels. Brussels’ answer to that is a three-year grace period for fines, coupled with the conviction that there will be enough profits to keep the pipelines open.
The Iran war disturbed the flow of goods in the Hormuz Strait, and the EU had to spend an additional €62 billion on energy supply during just 100 days. American LNG and jet fuel flooded the European market in record quantities. Venture Global, an American exporter, even signed long-term contracts all across the Balkans despite Washington’s fierce objections to the new laws. The Commission is sure that no company will give up such a promising market because of the bureaucracy.
Some experts do not share this view. The IEA warns that half of the crude imports to the EU will fail to comply with the legislation. Lobbyists claim that no company will dare ship non-compliant cargo, when even Eurogas admits “a lot of non-compliant gas” will reach Europe.
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Further reading: EU bets fossil fuel lobby is crying wolf over supply shock warnings
Related Articles
Here is a list of articles selected by our Editorial Board that have gained significant interest from the public:
AliExpress slapped with an unprecedented fine
The European Commission has hit Alibaba’s AliExpress with the biggest fine under the bloc’s Digital Services Act so far: €550 million ($629 million). This penalty surpasses the largest previous fines by far, including those against Elon Musk’s X (€120 million) and Temu (€200 million).
The platform with 193 million European users was accused of having underestimated staffing needs in its risk-detection department. Fake toys, hazardous cosmetics, and counterfeit goods remained on sale there for weeks despite the company’s “brand authorization” program, which was described as easily bypassed. At the same time, penalized sellers kept operating with few issues.
Alibaba called the decision “disproportionate” and said it will appeal. The company argued that it has made “significant, proactive enhancements,” but the Commission still gave AliExpress an October deadline to implement changes, with the next check planned for December. EU digital policy chief Henna Virkkunen said that one in five Europeans shopped from AliExpress, Shein, or Temu every month. Products that are illegal and unsafe are unfair to companies that follow the regulations.
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Further reading: AliExpress hit with $629 million EU fine over sales of illegal, counterfeit products
Australia lacks snow for ski season
Australia’s alpine resorts have just experienced a July weekend that resembled spring break, rather than the middle of winter. Mount Hotham has registered 12°C, breaking a 31-year-old record by more than three degrees. The temperature recorded in Falls Creek was 13°C. The skiers in t-shirts were met with no snow—night temperatures on several peaks registered above the freezing point, which is an anomaly in winter.
The warning from climatologists that the future of the Australian ski resort industry was limited is coming to reality. The survival of ski resorts these last few days has only been possible because of the snow-making machines working day and night without a break. Otherwise, there would be no skiing.
According to the Bureau of Meteorology, the warm weather will continue into the week, with only the possibility of some snow flurries before the temperatures rise further. It is a bad omen for a multi-billion-dollar industry that relies on winter weather conditions.
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Further reading: Australian ski resorts smash July climate records with temperatures 12C above average
Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — In the Cover Photo: A computer chip. Cover Photo Credit: Brian Kostiuk
