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North American Edition
24th September 2021
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Reinsurers underplay climate risk by up to half, S&P estimates
S&P Global Ratings calculates that reinsurers could be underestimating their exposure to natural catastrophes by between 33% and 50%. “Unmodelled risks and the inherent difficulties in attributing extreme events to climate change create the risk that climate change may not be fully reflected in reinsurers’ catastrophe modelling, particularly in the short term,” said Dennis P. Sugrue, S&P Global Ratings credit analyst. “We believe that those companies that take a more proactive approach to understanding and adapting their exposure to climate risk will be better protected against future capital and earning volatility linked to climate-related losses.”
Japanese apparel firms in dilemma over Xinjiang cotton
Major Japanese apparel makers and other companies are in a dilemma over Xinjiang cotton, considered one of the best cottons in the world, but also seen as symbolizing China's repression of ethnic minority Uighurs, mostly Muslim, in the Xinjiang Uyghur Autonomous Region. In May, it was learned that the United States had blocked imports of shirts for Fast Retailing's Uniqlo casual wear chain, alleging that they were made from Xinjiang cotton. Though Fast Retailing rejected the allegations, new US rules require firms to provide evidence that there has been no trade whatsoever with the Xinjiang Production and Construction Corps, a Communist Party of China-affiliated economic and paramilitary organization in the region, at any stage of the marketing channel after production. Users of Xinjiang cotton face a dilemma. They are criticized by U.S. and European NGOs and investors for low awareness of human rights if they continue using the cotton, but they may be forced out of the Chinese market if they stop using it. In fact, a boycott campaign targeting a well-known international apparel maker has spread in China. In April, sportswear maker Asics lost its sponsorship of a major marathon race in China after a long silence on the question of Xinjiang cotton.
Nike sales miss estimates amid supply chain disruption
Nike has posted first-quarter sales that missed Wall Street estimates as production and shipping delays hobbled the company’s efforts to meet strong demand for shoes and athletic wear. Global sales for the quarter ended August 31st rose 12% to $12.2bn, after adjusting for currencies, missing analysts’ expectations of $12.5bn. Net income grew to $1.87bn, or $1.16 per share, compared with $1.52bn a year earlier. Since mid-July, the company has been working through factory shutdowns in Vietnam, where it produces roughly 50% of its footwear and 30% of its apparel. Facilities have been closed as the government tries to tamp down the spread of COVID-19. About 80% of Nike’s footwear factories in southern Vietnam and roughly half of its apparel factories in the area remain closed. Shipping times from Asia to North America, meanwhile, worsened in the quarter, doubling to 80 days due to port and rail congestion and labor shortages. 

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Starbucks claims workers lack right to unionize at store level
Starbucks workers shouldn’t have the right to vote for a union on a café-by-café basis, the coffee chain has argued to the National Labor Relations Board (NLRB). “The facts and the law do not support holding individual and separate elections,” Starbucks attorney Alan Model said in his opening statement at a hearing held by the agency amid efforts by workers in Buffalo, New York, to organize. He argued that, because of similarities among the stores, any labor vote should include employees at all 20 of the company’s Buffalo-area locations, meaning the union would need backing from a majority of participating workers across the region in order to win. His comments follow August petitions by employees at three Starbucks locations in the Buffalo area to join Workers United, an affiliate of the Service Employees International Union. The union has signaled it has support at additional stores but isn’t currently seeking elections there. The campaign calls itself “Starbucks Workers United.” In order to overcome the labor board’s usual presumption that an election among just one location’s employees is legitimate, companies employ strategies like “centralizing the control of labor relations” among various locations to prove that a larger voter pool is more appropriate, said Mark Pearce, who was chairperson of the NLRB under President Barack Obama.
Canada's fossil fuel workers want Trudeau to keep retraining pledge
Workers in Canada’s fossil fuel sector say they expect re-elected Prime Minister Justin Trudeau  to keep his promises to retrain them for roles in a clean-energy economy as the country restates its commitment to reach net-zero greenhouse gas emissions by 2050. Canada will need around C$10bn ($7.8bn) over 10 years to retrain fossil fuel workers, according to oil worker advocacy group Iron & Earth. Luisa Da Silva, executive director of Iron & Earth, said Canada could lose the skilled talent that will be critical to a clean energy economy if the government does not prioritize transition funding, which the 2015 Paris Climate Agreement identified as important to ensure no workers are left behind as the world decarbonizes. He is skeptical about government action after past pledges failed to materialize. "At what point do these stop being promises and start being actions? These are people's livelihoods on the line," said Da Silva.
United Airlines employee lawsuit challenge over vaccine mandate
Six United Airlines employees have sued the carrier over its COVID-19 vaccine mandate for all U.S. staff. The suit, filed in federal court in the Northern District of Texas, claims that reasonable accommodations have not been made for those seeking religious and medical exemptions. The employee group alleges that United has made it difficult for employees to seek such accommodations and effectively terminates those who secure them. The Wall Street Journal observes that the legal challenge is indicative of the difficult decisions organizations face as they develop and enforce new policies around COVID-19 vaccinations. “Plaintiffs do not dispute the important goal of stopping COVID-19’s spread, but it does not override United’s obligations under federal law. And it certainly does not allow United to effectively terminate all employees who requested an accommodation,” they wrote. “We’re reviewing this complaint in greater detail but at this point, we think it’s without merit,” an airline spokeswoman said.
California sued over solar power installer rule
The California Solar and Storage Association has filed a lawsuit against the state over a new requirement that installers be “certified electricians.” The case asks the Superior Court of California in San Francisco to overturn the rule change and allow the current training standards to remain in place for those who install increasingly popular solar panels and battery systems. “This is devastating to California's solar industry and the state's ability to build a clean energy future,” Bernadette Del Chiaro, executive director of the association, said. “What they're saying is, this stuff is so dangerous that only certified electricians can do it. We don't have any evidence, a shred of evidence, that there's a problem.” The rooftop solar industry is also fighting with utility companies in California over the compensation that consumers receive for the electricity their systems provide to the electric grid. Utilities want to add more fees while cutting the credit consumers receive, known as net metering, by as much as 80% from the current dollar-for-dollar benefit. The net metering issue is under review by the California Public Utilities Commission.
Grubhub trial win must be reconsidered
A California federal judge has been instructed to reconsider her ruling that Grubhub was correct to treat a delivery driver as an independent contractor rather than as an employee. A unanimous three-judge panel of the 9th U.S. Circuit Court of Appeals said that because a strict classification standard adopted by the California Supreme Court in 2018 was retroactive, the federal judge must apply it in a 2015 lawsuit brought by former Grubhub driver Raef Lawson.  Grubhub was supported by business groups including the U.S. Chamber of Commerce, which said in an amicus brief that the Chicago-headquartered firm and other "Internet platforms" are not employers because they don’t direct how work is performed but merely connect workers with customers.
Texas challenges EEOC guidance on transgender worker protections
Texas Attorney General Ken Paxton is seeking to block Biden administration guidance requiring that employers allow transgender workers to use bathrooms and dress in a manner aligned with their gender identity. Paxton said states should be able to place the rights of employers over "subjective views of gender," and that the EEOC guidance puts many women and children at risk. His complaint follows a separate challenge by 20 other Republican-led states.
Coinbase abandons lending product after SEC pushback
Coinbase will no longer press ahead with its lending product after the Securities and Exchange Commission (sec) told the company it couldn't do so without registering the activity under investor-protection laws. Coinbase is still seeking “regulatory clarity for the crypto industry” but won't offer the product, the company wrote in a blog post. Separately, a group of investor advocates wrote to SEC Chair Gary Gensler earlier this week stating that many cryptocurrency projects are flouting investor-protection rules and deserve more scrutiny.
PwC chair: Climate change is biggest global problem in 80 years
Climate change is the most formidable challenge humanity has had to face since World War II and will require a similar level of individual mobilization and collective cooperation, according to PwC chairman Robert Moritz. Speaking at Climate Week NYC, he added: "We need 8bn people to make this a personal cause...The reality is, when you look at the numbers, when you look at the academic studies, at least our research would say we don’t necessarily need to double the efforts, triple the efforts, we actually have to fivefold the increase of the change we need to do to decarbonize the world that is going on right now."
The risks of trying to be funny in the workplace
Research has found that women are seen as more likeable and competent than men after similar failed attempts at humor, write Dr. Taly Reich, an associate professor of marketing at the Yale School of Management, and Dr. Sam J. Maglio, an associate professor of marketing and psychology at the Rotman School of Management and the University of Toronto Scarborough. When bad jokes are told in the workplace, observers are more likely to give the benefit of the doubt to a woman than to a man, the research suggests. “Even when jokes go south, people think that women are being more attentive to their audience than are men,” the authors write.

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