Week 46: From Climate Pledges to Tesla Turmoil

Dear all,

Free drinks and a pledge to stop drinking! Sounds weird? It is, but I pledge! You also get an anti-union Tesla EV as bonus!

I’m reading news about upcoming COP28 in the UAE. Reports of various kinds related to dire, or let me put it this way, a more and more desperate situation we are in,?are replacing each other on the margins of media outlet announcements. I write ‘margins’ since most global media outlets have sections on climate, green, or sustainability; some even have moral money sections, implying that all other money is not really moral.

This disposition in the media landscape simply indicating that climate and sustainability-related content is a topic in itself and not really integrated in the rest. It is a ‘section for people who care about that’. Media does not take sides. Media reports. Well, I can imagine editorial meetings where editors prioritise news headings to drive traffic for their media house and how ‘we have not met one single climate pledge that was made in 2015 in Paris’ sort of does not fit on the front page.

It is not only depressing, but media editors also must take responsibility for the masses and not scare them. I remember a discussion with one of the Swedish journalists several years ago when she, over coffee, told me that the direction from the editor is that 7 out of 10 pieces must be positive.

I was numb for couple of hours after that. It appears to be far better to publish these depressing pieces under section ‘climate’ for tree huggers and people who like saving the world. Real news like the latest one on China and the US kissing and making out again is the real deal.

Big headings, front pages, congress on their feet applauding Head of the Communist party in China, Xi, for his words, ‘we are big market, and we are friends’ .

Ovations in the US Congress. “Xi told business leaders in San Francisco: ‘The number one question for us is, are we adversaries or partners?’ If the US and China saw each other as rivals, he warned, ‘it will only lead to misinformed policymaking, misguided actions and unwanted results’.

Now we know. These two countries run the world circus. They decide for the rest of us. The dynamics where two biggest polluters in the world kiss and make out for the sake of business is indeed great. We need to take heat down; wars and geopolitical tensions are indeed creating a lot of uncertainty and pain for the most vulnerable people around the world and are certainly not good for business.

However, this kissing and making out does not necessarily mean anything positive for the fight against climate emergency. I have not seen one single heading where editors have chosen a heading like something like this: ‘China and US make empty climate pledges, since 2014’. And then a subheading: ‘The US is the biggest oil producer in the world and China launches one new coal power plant per month’. This is a fact. We know it, media knows it, and no-one seams to read what was pledged before. Here you can find pledge the US and China made in 2014 .

This is what is says: “The US intends to achieve an economy-wide target of reducing its emissions by 26%-28% below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28%. China intends to achieve the peaking of CO2 emissions around 2030 and to make best efforts to peak early and intends to increase the share of non-fossil fuels in primary energy consumption to around 20% by 2030. Both sides intend to continue to work to increase ambition over time.”

And under section 7, the last bullet is saying “agreed on a joint peer review of inefficient fossil fuel subsidies under the G-20”.

I have not seen one single article published by any media outlet on this or the outcome of this rather monumental review, since fossil subsidies, among other things are killing the transition to renewable energy systems in developing countries as well as in some developed countries. Globally, fossil fuel subsidies were $7 trillion or 7.1 percent of GDP in 2022 , reflecting a $2 trillion increase since 2020 due to government support from surging energy prices.

A couple of days ago, in a new pledge (this one from 2023) just ahead of COP28, the gospel sounds like this; “The US and China will back a new global renewables target and work together on methane and plastic pollution, they said in a joint statement on Wednesday after a meeting to find common ground ahead of COP28 talks in Dubai later this month. Climate envoys John Kerry and Xie Zhenhua, meeting in Sunnylands, California, from Nov. 4-8, agreed to revive a bilateral climate working group that will discuss areas of cooperation, the joint statement said, though differences remain on issues like phasing out fossil fuels.”

Beautiful. And now you can see the reality of pledges. This one is in for China .

And this one is for the US .

Now we move to Semi-God Elon. This time it’s not about rockets and space travelling or X. Now it is about something far more interesting. As we know, ESG investors around the world care about human rights, labour rights and all possible human rights declarations they can refer to on their webpages. It looks good and in the investor relations presentations when they present how they work, these commitments are like solid concrete blocks. ‘We are fully committed to this and that.’

Well, looking behind the curtains is not always easy and not always so obvious as it is now. Especially in relation to Tesla. Tesla was among 39 companies added to the S&P 500 ESG index effective May 1 as part of an annual rebalancing. This means that Tesla is a big holding in zillions of investments funds around the world, carrying the banner of ESG or Sustainability. Latest developments in Sweden would urge some of these deeply committed ESG investors to take a good look on Tesla. Thus, that is far from being a case as it looks.

Elon does not like unions. Tesla has long fended off efforts to unionize its workforce around the world. But in Sweden, the EV maker is facing its first-ever labour action. And Swedish workers of all stripes are banding together to boycott Tesla. These actions could have ripple effects for the company globally.

Tesla refused to engage in negotiations on a collective agreement; Swedish union IF Metall realised its strike warnings on October 27. With opposition to Tesla’s anti-union attitude growing, other Swedish unions are taking solidarity action to protect the right to collective bargaining.

Unions in Norway are set to join the protest. As part of a solidarity action that began on November 7, the Swedish Transport Workers' Union stopped offloading Tesla cars at four of the country's main ports. A complete blockade of the loading and offloading of Tesla cars in all Swedish ports could come into effect on November 17.

The Electrical Workers' Union is joining the solidarity action; as of November 17, its members will not provide any service for the brand at Tesla's 12 workshops or 213 charging stations in Sweden. The Real Estate Workers' Union has announced a blockade as of November 17 and will not clean Tesla’s four workplaces.

The latest union to join the action against Tesla is the Swedish Union for Service and Communications Employees, SEKO, who will stop delivering post and parcels to Tesla. Support is now coming from Norway. Norwegian union Fellesforbundet warns it will block Swedish Teslas coming to Norway. IF Metall has been trying to negotiate a collective agreement for its members who service and repair Tesla vehicles at TM Sweden AB for years.

Despite the union's efforts, Tesla is refusing to sign an agreement, saying that it does not fit the company's business model. When negotiations stalled, IF Metall launched industrial action on October 27 in 12 Tesla-owned garages, subsequently adding another 20 that also service Tesla cars. A brief return to the negotiating table on November 1 yielded nothing, and IF Metall reports of Tesla using strike breakers to ensure business as usual.

Let’s see how this drama evolves. Certainly bankers, making money on sustainable investments in Tesla are not going to be joining union members trying to get basic protection which sustainable investments should contribute to…

Tesla has over 120,000 workers globally and production in the US in Fremont, California; Austin, Texas; Sparks, Nevada; and Buffalo, New York. The company has a strong anti-union position. Tesla controls around 60% of the EV market in the US, and Detroit and foreign automakers in the South are racing to catch up.

Tesla workers make about $55 an hour, compared to $66 to $71 an hour at Detroit’s Big Three, according to industry estimates. Workers have attempted to organize at Tesla at least three different times. But the company, led by Elon Musk, has been difficult for unions to break into because of weak protections for labor organizing in the United States; Tesla’s aggressive tactics; and Tesla’s strategy of granting factory workers stock options, a rarity in the auto industry.

Unionization in the US is much harder than in other countries. Over 30 supporters of a nascent union at its Buffalo facility was fired this year, just days after the organizing effort was announced. European countries have sectoral bargaining, where unions and employers negotiate over contracts for entire sectors of the economy or classes of workers.

In the US, however, individual employers and unions bargain over contracts. CNN reports that “It’s a real uphill battle to unionize in the US,” according to Risa Lieberwitz, a professor of labor and employment law in the Cornell University School of Industrial and Labor Relations. At least 30% of workers need to sign union cards to unionize a workplace before the National Labor Relations Board oversees a union vote. Workers are often persuaded against voting in favor of a union by companies, and “union-avoidance” consultants are hired to dissuade employees and weaken unionization efforts. Even if there is a majority in favor of a union, negotiations on pay, benefits and other areas can go on for years.

And in other news:

• There’s a growing business in recycling the 90% of solar panels that would otherwise end up in a landfill.
• To prevent forest fires, build cities with more… wood? An entrepreneur in Washington state has a plan to reduce wildfire risks, promote low-carbon buildings and boost the local economy, all at the same time.
• The climate scientist who would be president. Claudia Sheinbaum, a recognized climate expert, is campaigning to succeed Mexico’s current president, a strong backer of fossil fuels. Will she cut emissions if she wins?
• To meet climate goals, Gulf countries will have to overhaul everything. When Dubai hosts the COP28 climate conference, the tension between Gulf countries’ net-zero targets and reliance on fossil fuels will be front and centre.
• The US and China are inching closer on climate. Progress at the COP28 climate conference gathering in Dubai will depend greatly on the world’s two biggest emitters and the veteran negotiators representing them.
• The bankers are back for COP28. Big-name finance chiefs are expected to turn out in force for the next UN climate summit.
• A startup is battling Big Oil for the $1 trillion future of carbon cleanup. Climeworks is a pioneer in carbon-capture technology. Can it grow quickly enough to make an impact in the climate fight?
• Tracing nature’s DNA to help companies measure biodiversity impacts. The cutting-edge science could be an accountability breakthrough — or the new vanguard of greenwashing.

That’s all for this week!

Best regards,

Sasja