Will Bezos deliver in the fight against climate change?
Written by Juan Palenzuela, Associate
Edited by David Gaffney, Partner
Good morning, Ten billion dollars is a lot of money. It could help solve many global issues. With that premise in mind, Amazon chief executive Jeff Bezos yesterday launched the Bezos Earth Fund, committing $10 billion to fight climate change. Bezos hopes to grant charitable donations to institutions researching and ultimately helping to diminish climate change. It is a noble idea – as well as an eye-watering sum of money – and one that should be welcomed. Besides the direct impact of the fund, this type of initiative puts pressure on those within the business community that have not yet taken action to do so. Personally, I believe that these actions are sincere. In the past, Bezos has boldly articulated his concerns regarding climate. But it is also true that he will have a hard time reconciling those views with the nature of the business that made him his fortune. Back in June, Amazon removed its minimum order spending requirement of $25 for Prime members in the US. Whereas before members had to bundle up smaller goods to qualify for free express shipping, Amazon now allows and effectively encourages Prime members to buy and ship individual low-cost items separately. The environmental impact resulting from that could be severe, but is difficult to estimate. A 2013 research paper from MIT suggested that online shopping could actually produce a smaller carbon footprint compared to bricks-and-mortar shops, depending on a variety of factors and only if online retailers such as Amazon optimise supply chains and minimise packaging. More importantly, however, Amazon’s removal of the minimum spending threshold for free deliveries is another symptom of a wider truth: the company is increasingly rooted in the fast and out of control consumption of cheap goods. It will take global scale resources and deft policymaking initiatives to genuinely shift that culture and mitigate its contribution to climate change. Would Bezos be supportive of progressive policies that fundamentally impact Amazon’s business model? That’s the real $10 billion dollar question.
Dozens of people were forced to spend the night in shelters as severe flood warnings remain in place across the UK. The extreme weather, caused by storm Dennis, has so far flooded hundreds of homes, particularly in South Wales, Herefordshire, Worcestershire and Shropshire. Andrew Sabisky, briefly a government adviser in 10 Downing Street, resigned last night after a scandal erupted over comments he had made in the past about compulsory contraception, race, and eugenics. Sabisky said he had "wanted to help the government not be a distraction” and had therefore decided to stand down. In a statement issued yesterday, the EU’s industry commissioner Thierry Breton rejected Facebook’s latest proposal for the regulation of online content, arguing that it was for Facebook to adapt to Europe’s standards, not the other way around. The company has been criticised for failing to assume more responsibility for data privacy and illegal material on its platform.
Business and economy
The coronavirus, Covid-19, has continued to disrupt trade. Last week, Barcelona’s Mobile World Congress was cancelled and yesterday the Beijing Motor Show was pulled too. In a rare instance, Apple reported a demand and revenue warning because of the virus. It is the first time a large American firm has recognised the impact that a virus-led slowdown can have on its profitability. A radical downsizing plan was announced by HSBC yesterday as it warned of the impact that social unrest in Hong Kong and the coronavirus outbreak has had on its business. As part of the plan, HSBC suggested that it plans to cut around 35,000 jobs in both Europe and the US, with the ultimate goal to cut annual costs by $4.5bn. It is the bank’s most radical overhaul since the 2008 global financial crisis. Nissan’s recently appointed chief executive set out a new vision to turn around his business in a meeting with investors. The new strategy includes cuts to executive pay and deep restructuring plans in the US in particular. He told shareholders that he was committed to stepping down if the plan fails. Nissan’s share price and dividends have been heavily affected in the last year, following the ousting of Carlos Ghosn in 2018.
Columns of note
Writing for the Financial Times, John Thornhill explains how the Apple watch has been mercilessly exposing the traditional watchmaking industry by offering a radically different type of functionality and a very different kind of style. In an industry driven by luxury over function, traditional Swiss watchmakers may be losing to Apple on their own terms. In The Times, shadow culture secretary Tracy Brabin MP argues that the future of the BBC should be decided on a non-partisan basis and that there is a growing importance for stakeholders to declare their beliefs. After all, Brabin argues, the BBC in some way binds the country together, and the decision to radically change it should not by any means be taken lightly.
Source: The Times
What happened yesterday?
Equity markets across the globe edged slightly higher after a fresh stimulus was announced by the People’s Bank of China to counter the impact of the coronavirus outbreak. In Europe, the announcement countered the negative sentiment around Germany’s slowdown. The Bundesbank recently said there are no signs of a pick up in growth in the first quarter, as it warned of the impending hit to factory activity from the coronavirus. Nonetheless, the Dax added 0.29% to 13,783.89, alongside a rise of 0.27% for the French Cac-40 to 6,085.95, while the FTSE Mibtel was up by 1.04% at 25,102.51. The pan-European Stoxx 600 was up 0.34% at 431.98. In the UK, the impact of China’s announcement was also positive. The FTSE 100 gained 0.33% at 7,433.25. Markets in the US were closed due to the Martin Luther King Jr. holiday.
What's happening today?
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Did you know?
After serving as the 18th president of the United States, Ulysses S. Grant lost all his money in a Ponzi scheme.
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