Business

SYDNEY (Reuters) – AGL Energy Ltd could launch a strategic review as early as Monday as doubts grow over the Australian power producer’s plans to split into two companies, the Australian newspaper reported.

AGL was mulling its options on Sunday amid market speculation that breaking the company into retail and generation units may lack the shareholder support to go ahead, the newspaper said.

AGL did not immediately respond to a Reuters request for comment.

One option was to launch a strategic review that could boost the chances of AGL being sold off, the Australian reported, citing unnamed sources.

AGL’s board was to meet on Sunday afternoon to determine next steps, with a decision possible on Monday, the report said.

Shareholders are set to vote on June 15 on AGL’s demerger plan. The split would form AGL Australia, which would be the country’s top energy retailer, and Accel Energy, the country’s top power producer.

Technology billionaire Mike Cannon-Brookes indicated on Friday he would seek two seats on AGL’s board if the plan to split the company failed.

In a letter addressed to AGL Chair Peter Botten, Cannon-Brookes criticised the demerger plan and expressed his intention to appoint two nominees for Grok Ventures – a vehicle he owns – to the AGL board.

Cannon-Brookes, the co-chief executive of software firm Atlassian and a vocal climate activist, gained an 11.3% stake in AGL this month by converting part of his derivatives-based holding in the company. He failed in a takeover attempt with Brookfield Asset Management earlier this year.

Australian pension fund HESTA previously joined the tech billionaire in opposing the demerger, saying it did not see the split supporting decarbonisation targets laid out by the Paris climate agreement.

Accel, if the demerger goes ahead, will inherit AGL’s coal-fired power plants and the mantle of Australia’s largest carbon emitter, according to government data.

(Reporting by Samuel McKeith; Editing by William Mallard)

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By Selena Li and Lawrence White

HONG KONG/LONDON (Reuters) – HSBC is facing queries from customers about its commitment to fight climate change after a senior banker downplayed the risks, sources told Reuters, with at least one large institutional investor reconsidering whether to employ the bank for a sustainability role, according to one of the people.

The investor, which manages in excess of $100 billion, plans to seek opinions from consultants on whether HSBC Asset Management should help manage its sustainability funds in the wake of the controversial comments, said the person with direct knowledge of the matter.

Staff inside the bank have also sought reassurances about its policies amid concerns about how HSBC will be perceived by clients, two other sources said.The sources declined to be named as they were not authorised to speak to the media. A spokesperson for HSBC declined to comment.

Earlier this month, Stuart Kirk, who is global head of responsible investing at HSBC Asset Management, told a conference in London that “climate change is not a financial risk we need to worry about”, comments that prompted the bank to suspend him and conduct an internal investigation.

Kirk declined to comment when reached by Reuters.

Kirk’s presentation was met with criticism from campaigners who have been pressuring the bank and its peers in the financial services industry to play a bigger role in the fight against climate change.

It also prompted The Pensions Regulator in the U.K. to warn that any pension scheme failing to consider the impacts of climate change was “ignoring a major risk to pension savings”.

HSBC is a leading provider of investment services to such schemes.

HSBC Chief Executive Noel Quinn has said that Kirk’s comments were “inconsistent with HSBC’s strategy and do not reflect the views of the senior leadership”. Nicolas Moreau, who heads the asset management division, also distanced the bank from Kirk’s remarks.

HSBC Asset Management has received a number of inquiries from institutional clients about Kirk’s comments, one of the sources said.

Some of the institutions said they felt obligated to seek more clarity and understand HSBC’s official stance, the source added.

The possibility of HSBC Asset Management, a division that oversees some $640 billion, losing business comes as the company invests in the unit as part of a broader push to grow fee income. Over the last year, HSBC has bought businesses in Singapore and India as it seeks to expand in Asia in particular.

The unease has also rippled through the bank’s internal meetings. Employees feeling concerned raised questions to senior management during a recent town hall, two of the sources said.

Still, several industry experts have defended Kirk, saying that he had sparked a legitimate debate and that there should be room for dissenting voices in finance.

The impact of climate risk on portfolios can indeed be exaggerated as Kirk claimed, Tariq Fancy, a former head of sustainable investing at BlackRock Inc., told Financial News in an interview on Monday.

(Additional reporting by Simon Jessop in London; Editing by Elisa Martinuzzi and Carmel Crimmins)

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By Pete Schroeder and Nivedita Balu

WASHINGTON (Reuters) -The U.S. Securities and Exchange Commission (SEC) is looking into Tesla Chief Executive Officer Elon Musk’s disclosure of his stake in Twitter Inc in early April, according to a letter the agency sent to him that month.

In the letter, now made public by the SEC, the regulator asks Musk why it appears he did not file required paperwork within 10 days of the acquisition, and also questions why, when Musk did disclose his stake, he used a form meant for passive investors while he was openly questioning Twitter’s policies around free speech.

Specifically, the SEC asked Musk to explain why he opted to initially file a “13G” disclosure form, which is meant for investors who plan to hold their shares passively instead of a “13D” form, which is for activist investors who intend influence management and policies of the company. He later amended the filing. Musk was offered a board seat shortly after his initial disclosure and has since gone on to attempt to buy the company outright in a $44 billion deal to take it private.

Spokespeople for Musk did not immediately respond to a request for comment. An SEC spokesperson declined to comment.

Separately, Twitter said in a filing Friday it was not accepting the resignation of Egon Durban, a Musk ally, from its board. Two days earlier, Twitter shareholders had blocked his re-election, but the company said he brought “unparalleled operational knowledge of the industry” and instead he would reduce his board roles elsewhere.

Outside experts had previously said Musk’s late filing and apparently improper paperwork could attract the attention of the SEC, which has sparred with Musk in the past.

But the financial consequences for the world’s richest man could be limited, as fines for such a misstep would likely rise to a few hundred thousand dollars, according to outside experts. And others were skeptical it could endanger Musk’s efforts to acquire Twitter.

“I think from that investigation standpoint, the SEC is going to have a pretty strong case that he’s violated securities laws,” said Josh White, a finance professor at Vanderbilt University who previously worked at the SEC as a financial economist. However, he added it “would be disastrous if [the SEC] said, well, this Twitter deal is on hold because Musk filed the wrong form.”

“Twitter stock price would instantly drop … I don’t think that the Commission has an interest in necessarily standing in the way of the deal.”

The SEC’s letter is dated the same day Musk disclosed a 9.2% stake in Twitter. The billionaire has been sued by investors claiming he manipulated the company’s stock price downward and profited by not disclosing his investment on time.

The Tesla Inc chief executive officer has landed in trouble with the SEC before, when the agency sued him in 2018 after he tweeted he had “funding secured” to potentially take the electric car company private at $420 per share. In reality, a buyout was not close.

However, Reuters has reported that the SEC has previously been reluctant to take Musk to court over perceived violations of the resulting settlement out of concern they might lose the case, and instead has opted to simply urge him to comply.

Shares of Tesla were up 5.75% in midday trading, while Twitter shares were up 2.2%.

(Reporting by Nivedita Balu and Sweta Singh in Bengaluru, Svea Herbst-Bayliss and Pete Schroeder in WashingtonEditing by Shinjini Ganguli and Mark Potter)

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By Siddharth Cavale and Arriana McLymore

NEW YORK (Reuters) – Major U.S. retailers that recently scrambled to restock shelves amid product shortages disclosed this week that their stores are now packed with too much merchandise, and some are even doing what was unthinkable just a few months ago: discounting unsold goods.

It’s a sign of possible more trouble to come for retailers amid soaring inflation and higher gas prices. With shoppers’ tastes quickly shifting, many retailers now find themselves with a surplus of merchandise, driving up costs.

Costco Wholesale Corp said its inventories ballooned 26% in its fiscal third quarter ended May 8 that included a “few hundred million dollars” of extra holiday merchandise and being a “little heavy” on small appliances and household items.

At Gap Inc, a 34% spike in inventories was caused by poor sales at Old Navy and longer transit times for goods, CFO Katrina O’Connell said Thursday.

Similarly, Macy’s CEO Jeff Gennette this week cited an “imbalance” in inventory. “Supply chain constraints relaxed,” resulting in it receiving goods from overseas earlier “than we expected,” he said. Meanwhile, shoppers changed buying patterns, buying fewer home items while snapping up occasion-based clothing and other merchandise.

Average retail inventories in the United States are rising at a faster pace than sales growth, according to Citi research on 18 retailers’ first-quarter results as of May 22. At 11 of the 18, inventories rose by 10 percentage points more than sales did, according to Citi analyst Paul Lejuez. That is the widest gap since before the coronavirus pandemic began, illustrating a trend that began in March 2022.

During the supply-chain crisis, major retailers went on buying sprees, loading up on a range of merchandise and bulking up investments in merchandise so they would have enough goods in stock for shoppers flush with cash.

But the retailers’ moves backfired, according to executives and analysts. With inflation soaring and fuel prices jumping, shoppers retrenched quite rapidly, buying less clothing, TVs and high-margin appliances.

That scenario is prompting retailers like Walmart and Macy’s to clear out excess inventories by discounting more items and offering deeper promotions, a move that would erode margins. Walmart CEO Doug McMillon said on its earnings call that it had started “aggressive” price rollbacks to encourage sales of some higher-margin goods, including apparel.

EXCESS MERCHANDISE

As inflation lifted prices of everything from TVs to toothpaste, lower-income consumers have curbed their spending, according to Walmart and Target.

Higher-income shoppers have shown resiliency, snapping up suits, gowns and footwear and spending more on services, economic data and results from retailers that cater to more affluent households showed.

Holding excess merchandise proves expensive as warehousing costs rise. Walmart store and distribution centers had 32% more merchandise, Target had 43% more goods compared to a year earlier and Best Buy had 9% more merchandise in the first quarter, the retailers said. Macy’s said on its earning call inventories rose 17% from the same period in 2021.

Macy’s Chief Financial Officer Adrian Mitchell said on Thursday consumers’ quick shift away from “pandemic categories” and receiving items sooner than expected, due to a loosening supply chain, resulted in higher inventories. He forecasted Macy’s second-quarter gross margins to reach 2019 levels.

Some anticipate that many retailers this year will start to discount more to clear out unsold merchandise. Macy’s CFO’ warned of “an elevated promotional environment,” for example.

Data from research firm StyleSage showed mid-tier department stores, such as Macy’s and Kohl’s , stepped up price promotions in mid-May, implementing them on 57% of items.

In the clothing category, retailers put in place discounts on 36% of items as of mid-May, up from 32% in the whole of April, according to StyleSage. The average discount, however, remained steady at 12% since January.

Kohl’s offered eight promotions in the second week of May, versus three in the year-earlier period, according to research from Jane Hail Associates.

Similarly, Walmart was offering up to 65% off on top-rated items and up to 25% of on tech and home goods during the week of May 9. At the same time last year, deals for tech products were just 10% and offers on home products were only for limited items.

(Reporting by Siddharth Cavale and Arriana McLymore in New York; Editing by Vanessa O’Connell and Nick Zieminski)

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LOS ANGELES (AP) — To drive, or not to drive? This Memorial Day weekend, with surging gas prices that are redefining pain at the pump, that is the question for many Americans as a new COVID-19 surge also spreads across the country.

For Marvin Harper, of Phoenix, his family’s weekend travel plans are a double punch to the wallet. His college-age son and daughter each have a soccer tournament in Southern California and Colorado, respectively. He and his daughter will fly to Denver, rather than drive, because of the cost of fuel, while his wife and son will go to California in her SUV.

“My mother-in-law’s going with my wife and son to split that cost because it’s just too much on our household,” said Harper, as he filled up the tank of his truck at a Phoenix QuikTrip. “We can’t afford both of us to drive. That’s the bottom line … Gas prices are killing our household.”

For some, that’s exactly what’s caused them to rethink their holiday plans, making them opt for a staycation in their backyard to limit the damage to their wallets.

Laura Dena and her sons would typically go to Southern California around Memorial Day weekend to escape Arizona’s scorching heat. This year, because it takes at least $100 to fill up her truck, they’re staying home.

“It’s really frustrating,” said Dena while waiting in line in 90-degree heat for a pump at a Costco in Phoenix. “It’s upsetting, but there’s not much we can do. We have to pay the price.”

The average gas price in the U.S. on Thursday was $4.60 per gallon, according to AAA figures. In California, it topped $6. The high price of oil — largely because many buyers are refusing to purchase Russian oil because of its invasion of Ukraine — is the main cause of the steep gasoline prices.

Rising prices coincide with a COVID-19 surge that has led to case counts that are as high as they’ve been since mid-February, and those figures are likely a major undercount because of unreported positive home test results and asymptomatic infections.

Still, 2 1/2 years of pandemic life has many people hitting the road or taking to the skies, despite the surge. AAA estimates that 39.2 million people in the U.S. will travel 50 miles (80 kilometers) or more from home during the holiday weekend.

Those projections —- which include travel by car, plane and other modes of transportation like trains or cruise ships — are up 8.3% from 2021 and would bring Memorial Day travel volumes close to 2017 levels. The estimates are still below pre-pandemic 2019 levels, a peak year for travel.

About 88% of those 39.2 million travelers — a record number — are expected to go by car over the long weekend even as gas prices remain high, according to AAA spokesperson Andrew Gross.

In California — despite being home to the nation’s highest gas prices — the state’s nonprofit tourism agency also predicts a busy summer for the Golden State, beginning this weekend.

Ryan Becker, Visit California’s spokesperson, said his agency is seeing a lot of “pent-up demand” because of the pandemic: “I want to get out, I want to travel. I’ve had to put my anniversary trip on hold, I’ve had to put my 40th birthday trip on hold.”

Outdoorsy, an online rental marketplace for RVs and camper vans, is noticing that its renters have changed their plans over the course of the pandemic. Early on, people would rent an RV to travel cross-country safely to visit family. Now, they’re back to using the RVs as a cost-effective way for a vacation tethered to nature.

“I think everyone needs a vacation, I really do,” Outdoorsy co-founder Jen Young said. “Have we ever lived through a more stressful, challenging — mentally and physically and spiritually — time in our lives?”

Others shrug off the stress of the added travel costs because it’s out of their control. At a Chevron station in the Glassell Park neighborhood of Los Angeles, Ricardo Estrada tried to guess how much the $6.49 a gallon price would run him in total for his Nissan work van.

“I’ll go with between 60 and 70 bucks,” the heating and air-conditioning technician speculated, eyeing the display as the price went up and up.

Estrada — just missing his guess when the pump registered $71.61 for 11 gallons of regular grade — has been forced to raise his business fees for customers to overcome the gas prices. He’ll be working over the holiday weekend but has a vacation planned in Arizona next month.

He’s flying, but only because of convenience, not cost.

But with airline tickets prices up, too — AAA found that the average lowest airfare for this weekend is 6% higher than last year — that’s not a sure bet, either.

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Tang reported from Phoenix. Associated Press video journalist Terry Chea in San Francisco contributed to this report.

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ATLANTIC CITY, N.J. (AP) — This summer is a crucial one for Atlantic City as it tries to recover lost business during the third year of the coronavirus pandemic, and casinos and non-gambling resorts are putting millions into renovations and new attractions to compete for visitors.

Casinos and non-gambling companies are making big investments in what they hope will be a corner-turning season with customers more willing than in the previous two years to visit Atlantic City attractions amid the still-not-over pandemic.

“This is a really important summer for Atlantic City,” said Phil Juliano, senior vice president of Bally’s casino, which opened a 360-degree rotating bar and a part of an indoor-outdoor beer garden on Thursday. The projects are part of $100 million the company is investing in the property.

He said Atlantic City was showing signs of growth in early 2020, only to have those hopes dashed by the coronavirus pandemic which closed the casinos for 3 1/2 months in March, and led to operating restrictions for more than a year afterward.

“This is an interesting summer: You have inflation, you still have COVID and high gas prices, but you also have pent-up demand,” Juliano said. “People are coming out again, and we need that.”

The Atlantic City casino industry is vital to southern New Jersey’s economy, said Christina Renna, president and CEO of the Chamber of Commerce Southern New Jersey.

“As we continue to rebuild and recover from the COVID-19 pandemic, the industry’s growth and prosperity is more important than ever before,” she said.

Atlantic City enters the summer amid some encouraging signs — and some concerning weaknesses. The casinos’ collective revenue and profitability are up this year, but not all the casinos have surpassed the levels they were operating at in 2019 before the coronavirus pandemic hit.

On Saturday, the Showboat hotel, the former casino, will open its $1.5 million indoor go-kart track, even as it works to build a $100 million year-round indoor water park, private financing for which was secured on Thursday, owner Bart Blatstein said.

He said his go-kart course is “another non-gambling amenity in a market where only 8% of visitors are families. It’s a way to bring in a new market.”

Resorts is working on a multi-million dollar renovation of its rooftop outdoor pool, including a retractable roof and party areas that should be ready in late June. On Friday, Resorts will open Coral Lounge, a new under-the-sea-themed pop-up bar.

The Ocean Casino Resort is in the midst of $85 million worth of projects, including the completion of over 460 hotel rooms and suites; a new sportsbook and lounge, and multiple new food and beverage outlets. It also will offer bicycle rentals outside its main entrance this summer.

Hard Rock will spend $20 million this year on renovations including adding 70 slot machines and seven more table games; renovating its convention space, beach bar and employee areas.

Caesars casino will start work this year on a new theater and resident show due to open in the first quarter of 2023. The project will incorporate the facade of the former Warner Theatre from 1929, which is currently part of the casino’s exterior facing the Boardwalk.

Also planned for Caesars in 2022 is a new restaurant, opened by a hospitality company involving actor Robert De Niro that also will renovate hotel rooms there. Caesars Entertainment is partnering with Nobu Hospitality for a project to be called Nobu Hotel Atlantic City.

Tropicana is adding eight new food and beverage outlets this year and Harrah’s will open three casual dining outlets.

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Follow Wayne Parry on Twitter at www.twitter.com/WayneParryAC

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TOKYO (AP) — Japan will open its borders to foreign tourists in June for the first time since imposing tight pandemic travel restrictions about two years ago, but only for package tours for now, the prime minister said Thursday.

Beginning June 10, Japan will allow the entry of people on tours with fixed schedules and guides, Prime Minister Fumio Kishida said.

Tourists from areas with low COVID-19 infection rates who have received three vaccine doses will be exempt from testing and quarantine after entry.

Japan this week is hosting small experimental package tours from four countries, Australia, Singapore, Thailand and the United States. That experiment, which involves only 50 people who received special visas, not tourist visas, is to end May 31.

After facing criticism that its strict border controls were xenophobic, Japan began easing its restrictions earlier this year and currently allows entry of up to 10,000 people a day, including Japanese citizens, foreign students and some business travelers.

Japan will double the cap to 20,000 a day from June 1, which will also include package tour participants, said Makoto Shimoaraiso, a Cabinet official in charge of pandemic measures.

The scale of the package tours and other details will be finalized after officials evaluate the results of the current experimental tours, he said.

It will take some time before foreign visitors can come to Japan for individual tourism, Shimoaraiso said.

Japan’s tourism industry, hit hard by the border controls, is eager for foreign tourism to resume. COVID-19 infections have slowed in Japan since earlier this year and the government is gradually expanding social and economic activity.

Kishida said during a visit to London earlier this month that he planned to ease the border controls as early as June in line with the policies of other Group of Seven industrialized countries, but gave no further details.

Foreign tourist arrivals fell more than 90% in 2020 from a record 31.9 million the year before, almost wiping out the pre-pandemic inbound tourism market of more than 4 trillion yen ($31 billion).

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KYIV, Ukraine (AP) — Moscow pressed the West on Thursday to lift sanctions against Russia over the war in Ukraine, seeking to shift the blame for a growing food crisis worsened by Kyiv’s inability to ship millions of tons of grain and other agricultural products because of the conflict.

Britain immediately accused Moscow of “trying to hold the world to ransom” and insisted there would be no sanctions relief.

Ukraine is one of the world’s largest exporters of wheat, corn and sunflower oil, but the war, including a Russian blockade of its ports, has prevented much of that production from leaving the country, endangering the world food supply. Many of those ports are also now heavily mined.

Kremlin spokesman Dmitry Peskov tried to put the blame for the crisis squarely on Western sanctions.

“We accuse Western countries of taking a series of unlawful actions that has led to the blockade,” he said in a conference call with reporters.

Russia itself is also a significant exporter of grain, and Peskov said the West “must cancel the unlawful decisions that hamper chartering ships and exporting grain.”

His comments appeared to be an effort to deliberately muddy the waters, by lumping the blocking of Ukrainian exports in with what Russia says are its difficulties in exporting its own products.

Western officials have dismissed those claims. U.S. Secretary of State Antony Blinken noted last week that food, fertilizer and seeds are exempt from sanctions imposed by the U.S. and many others — and that Washington is working to ensure countries know the flow of those goods should not be affected.

With the war grinding into its fourth month, world leaders ramped up calls for solutions this week.

“This food crisis is real, and we must find solutions,” World Trade Organization Director-General Ngozi Okonjo-Iweala said at the World Economic Forum meeting in Davos, Switzerland, on Wednesday.

She said about 25 million tons of Ukrainian grain is presently in storage and another 25 million tons could be harvested next month.

European countries have tried to ease the crisis by bringing grain out of the country by rail — but trains can carry just a small fraction of what Ukraine produces, and ships are needed to do the bulk of the exports.

At the same time, the Russian Defense Ministry proposed Wednesday to open a corridor to allow foreign ships to leave Black Sea ports and another to allow vessels to leave Mariupol on the Azov Sea.

Mikhail Mizintsev, who heads Russia’s National Defense Control Center, said 70 foreign vessels from 16 countries are now in six ports on the Black Sea, including Odesa, Kherson and Mykolaiv. He did not specify how many might be ready to carry food.

Ukraine expressed skepticism about the Russian proposal.

Speaking in Davos, Ukrainian Foreign Minister Dmytro Kuleba said the country was ready to agree on safe corridors in principle — but that it was not sure if it could trust Russia to abide by any agreement.

The issue, he said, was “how to make sure that at night or early in the morning, Russia will not violate the agreement on the safe passage and its military vessels will not sneak into the harbor and attack Odesa.”

British Foreign Secretary Liz Truss said Thursday that Russian President Vladimir Putin was “trying to hold the world to ransom” by demanding that some sanctions be lifted before allowing Ukrainian grain shipments to resume.

“He’s essentially weaponized hunger and lack of food among the poorest people around the world,” Truss said during a visit to Sarajevo.

She added: ”What we cannot have is any lifting of sanctions, any appeasement, which will simply make Putin stronger in the longer term.”

The World Food Program has pushed to get wheat out of Ukrainian ports while also making room for the harvest of grain that has recently been planted.

“It needs to be a continuous flow, it cannot be a few ships full,’’ said WFP spokesman John Dumont. “They are planting now. Where are they going to put that wheat when it is harvest time at the end of June and July? There is no place for it to go.”

On the battlefield, the General Staff of the Ukrainian military said Thursday that the Russian forces continued attempts to press their offensive in several sections of the frontline Ukraine’s eastern Donbas region. That industrial heartland of coal mines and factories is now the focus of fighting after Russia suffered a series of setbacks and war forced to pursue more limited goals.

Military officials said Russian forces continued their efforts to gain a foothold in the area of Sievierodonetsk, which is the only part of the Luhansk region in the Donbas under Ukrainian government control. They also said Russia also launched missile and airstrikes at infrastructure facilities across the country.

Luhansk Gov. Serhiy Haidai said Russian bombardments killed three people in and around the eastern city of Lysychansk, which is a key focus of fighting.

Talks to end the fighting stalled long ago, but each side has continued to try to stake out a negotiating position.

Peskov, the Kremlin spokesman, said Thursday it expects Ukraine will recognize the existing situation. That appeared to signal the Kremlin’s hopes that Ukraine should recognize the Russian control of southern Ukrainian cities like Kherson and Melitopol and other areas north of Crimea, which it seized in 2014, in addition to areas of the Donbas it has grabbed.

Russia has previously demanded that Ukraine recognize the Russian sovereignty over the Crimean Peninsula and acknowledge the independence of Russia-backed separatist regions in the Donbas.

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Becatoros reported from Kramatorsk, Ukraine.

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Follow AP’s coverage of the war in Ukraine: https://apnews.com/hub/russia-ukraine

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By Katanga Johnson and Ross Kerber

WASHINGTON/BOSTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) on Wednesday will propose rule changes aimed at stamping out unfounded claims by funds on their environmental, social and corporate governance (ESG) credentials, and enforcing more standardization of such disclosures.

The proposal will outline how ESG funds should be marketed and how investment advisors should disclose their reasoning when labeling a fund, according to people who have spoken to the SEC on the measures.

The proposal would also mandate that investment funds with terms such as “ESG,” “sustainable” and “low-carbon” in their names disclose the criteria and underlying data used to support the label, the people said.

While the new rules will affect all funds, their target is ESG funds which drew a record $649 billion globally through Nov. 30, up from $542 billion and $285 billion in 2020 and 2019, respectively, according to Refinitiv Lipper data.

Regulators and activists have become concerned that U.S. funds looking to cash in on the popularity of ESG investing may be misleading shareholders over their products’ underlying holdings, a practice known as “greenwashing.”

“We are hopeful that the new rule will require fund managers to follow basic naming guidelines. This will help to eliminate confusion and misleading marketing,” said Andrew Behar, president of climate activist group As You Sow, who has discussed the potential rules with the SEC.

He said market participants have to date exploited a loophole in the current rules when naming funds.

SEC Chair Gary Gensler has said that when it comes to sustainability-related investing, asset managers might confuse investors with conflicting names or certain terms or criteria they use.

Industry groups warn, however, that the agency’s aim to standardize ESG labels could reduce investor choice.

“We object to actions that would … substitute a regulator’s judgment about investment strategy for that of professional fiduciaries,” said Janay Rickwalder, a spokeswoman for the Investment Adviser Association, adding that her group has discussed the matter with the SEC on these themes.

(Reporting by Katanga Johnson in Washington and Ross Kerber in Boston; Editing by Richard Chang)

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PARIS (AP) — Several hundred climate protesters disrupted a TotalEnergies shareholders meeting in Paris and blocked the entrance to the gathering Wednesday to denounce the oil and gas giant’s stake in Russia despite Moscow’s war in Ukraine.

TotalEnergies tweeted that due to activists impeding access to the meeting, “it unfortunately won’t be possible for our shareholders to join us.” It said interested viewers could follow the meeting on the company’s website.

Protesters representing Greenpeace, Friends of the Earth and other environmental organizations denounced TotalEnergies for its huge presence in Russia as well as an oil pipeline project in Uganda and Tanzania that the protesters denounced as a “climate bomb.”

TotalEnergies, a subsidiary of Total, published in March its “principles of conduct” in Russia, which said the company would “gradually suspend its activities in Russia” and strictly comply with European Union sanctions “no matter what the consequences on the management of its assets in Russia.”

The statement said TotalEnergies does not operate oil or gas fields or liquified natural gas plants in Russia but has numerous stakes in various Russian companies. It said the company continues supplying Europe with liquefied natural gas from a plant in Russia’s Yamal Peninsula to honor long-term contracts “as long as Europe’s governments consider that Russian gas is necessary.”

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Follow AP’s coverage of climate issues at https://apnews.com/hub/climate and of the war in Ukraine at https://apnews.com/hub/russia-ukraine

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