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Norway's sovereign wealth fund plans to support a shareholder proposal demanding PepsiCo conduct a biodiversity risk assessment. The fund believes that the board should account for sustainability risks and the broader environmental and social consequences of PepsiCo's operations and products. PepsiCo's board, however, argues that a biodiversity assessment is unnecessary. The proposal by Green Century Capital Management warns that PepsiCo may be exposed to unnecessary risks if it doesn't fully assess its dependency on natural systems. German asset manager Allianz Global Investors also supports the biodiversity proposal. Additionally, Norway's sovereign wealth fund will vote against the compensation of PepsiCo's executive officers and the reelection of PepsiCo's chairman and CEO. The fund believes that the roles of chairperson and CEO should be separated.

 

Reuters

Two traders in Hong Kong left Societe Generale after the French bank discovered a batch of risky bets that went undetected by the firm's risk management systems. Kavish Kataria, a trader on the bank's Delta One desk, departed last year along with team head Ken Ng after an internal review of the transactions. While SocGen didn't lose any money from the transactions, the trades could have cost the Paris-based lender hundreds of millions of dollars had an intense market downturn occurred. The lapse has raised questions about risk management at one of Europe's biggest banks. 

 

Bloomberg

Target, Walmart, and other retailers have filed objections to a proposed class-action settlement with Visa and Mastercard over credit and debit card fees. The settlement, which would cap rates for card fees for five years and give sellers more authority to offer discounts based on the use of certain cards, has been criticized by retailers who claim it does not go far enough. The retailers argue that Visa and Mastercard would be allowed to resume anticompetitive practices after a five-year pause, and that the purported benefits of the settlement are "illusory." Walmart and Target have both voiced their concerns, with Walmart stating that small local merchants have "traded away the interests of large national merchants for relief that is worthless to the members with the most at stake in this litigation." The National Retail Federation has also criticized the settlement, calling the agreed rate reduction a "drop in the bucket." A preliminary hearing in the case is scheduled for June 13th.

 

Reuters

IBM is commencing a legal battle against Swiss software company Lzlabs in the English High Court. The tech giant alleges that Lzlabs reverse-engineered its mainframe software to create its own product. Lzlabs denies the breach of terms. The trial, which will last 28 working days, will be closely watched by the tech industry. IBM has also filed legal action in Texas against Lzlabs and Texas Wormhole for alleged misuse of its intellectual property. IBM's legal team includes partners from Quinn Emanuel and leading silks from Brick Court Chambers. Lzlabs has chosen partners from Clifford Chance and leading silks from 4 New Square and 11 South Square.

 

City A.M.

Character performers at Disneyland in California have filed a petition for union recognition. Unlike their Florida counterparts, the California performers have multiple other gigs, often in Hollywood movies and TV. The performers are organizing to be represented by Actors' Equity Association, a union devoted to performers. They are seeking more consistent scheduling, health and safety concerns, and fair treatment. The California performers hope that union representation will give them a voice in decisions about issues such as ill-fitted costumes and performing in parades during rain.

 

U.S. News

Auditors are expressing significant concerns over recent proposals by the Public Company Accounting Oversight Board (PCAOB) that aim to extend their responsibilities into areas like fraud detection and cyber risk management. The proposals are part of a broader effort by PCAOB Chair Erica Williams to modernize auditing standards, which some auditors feel could fundamentally change the profession by imposing additional workload and costs, especially amid challenges in retaining skilled personnel. The PCAOB's initiatives include requiring auditors to proactively identify fraud and other illegal activities, a move that has drawn criticism for potentially necessitating legal expertise beyond the traditional scope of auditors. This proposal, in particular, has led to a split vote among PCAOB members, with concerns about escalating audit fees due to the need for additional specialist consultations. Furthermore, the PCAOB wants audit firms to disclose new metrics about their operations and to submit confidential financial statements, adding to the industry's apprehension about overregulation. While these measures are intended to enhance transparency and investor protection, they are seen by many in the auditing field as overly burdensome. Investor groups, however, support the PCAOB’s push for more stringent regulations, arguing that they would lead to greater transparency and accountability in audits, ensuring that investors get their money's worth.

 

Wall Street Journal

On Sunday, pharmacy chain London Drugs closed 79 of its stores in western Canada, “out of an abundance of caution" following a cybersecurity incident. Stores remained shuttered on Monday, though pharmacists were available to deal with customer requests. After a previous announcement advising customers to contact their local store by phone, the company said its phone lines had been temporarily deactivated “as a necessary part of its internal investigation." London Drugs has no reason to believe that customer or employee data has been impacted, a spokesperson said. The company has hired cybersecurity experts to help with containment, remediation and investigation, she added.

 

Bloomberg

KFC Malaysia has temporarily shut local outlets, citing challenging economic conditions. The move came following media reports that the closures were due to boycotts over the fast food chain's perceived links to Israel. Some Western fast-food brands in Malaysia, a majority-Muslim country, as in some other Muslim nations, have been targeted over Israel's military offensive in Gaza. "QSR Brands and KFC Malaysia has taken proactive measures to temporarily close outlets as means to manage increasing business costs and focus on high engagement trade zones," QSR Brands (M) Holdings Bhd, which operates KFC and Pizza Hut franchises in Malaysia, said in a statement, which did not address the media reports and did not specify how many stores were affected. Local media has reported that more than 100 stores were temporarily closed. Staff from the affected outlets were offered the opportunity to relocate to areas with higher customer engagement, QSR Brands said.

 

Reuters

Consumer sentiment deteriorated near the end of April, according to the latest reading from the University of Michigan. Its consumer sentiment index for the month was downwardly revised to 77.2, from a preliminary reading of 77.9, the level that a Bloomberg survey economists expected it to hold at. The decrease by the headline index came as the current economic conditions index fell to 79.0 in April from 82.5 in March, while the index of consumer expectations dipped to 76.0 in April from 77.4 in March. "Different parts of the population exhibited offsetting changes this month," said Surveys of Consumers Director Joanne Hsu. "Republicans posted notable declines in sentiment this month, whereas Democrats and Independents did not. Sentiment for younger consumers rose, in contrast to middle-aged and older adults whose sentiment changed little or fell."

 

Market Watch

RTT News

Bloomberg

Last year, world leaders, corporate executives, and academic experts gathered at Britain's Bletchley Park for the world's first global AI Safety Summit. Now, the second AI Safety Summit, co-hosted by Britain and South Korea, will address the limitations and regulation of artificial intelligence. Martha Bennett, a senior analyst at Forrester, believes it will be difficult to move beyond the broad agreement reached at the first summit. The focus has shifted from existential risk to the resources needed for AI's development, such as data and electricity. Experts warn against relying solely on scientific breakthroughs and lucrative financing efforts for AI's future. Questions around copyright, data scarcity, and environmental impact are also expected to be discussed. However, some key attendees have declined invitations to the virtual event in Seoul. Despite the lower attendance, the summit aims to build on the momentum of Bletchley Park and make progress in AI safety and innovation.

 

Reuters

The U.S. National Highway Traffic Safety Administration (NHTSA) has opened an investigation into two fatal crashes involving Ford's Blue Cruise partially automated driving system. The crashes, which occurred in Texas and Philadelphia, resulted in the deaths of three people. The NHTSA will evaluate how Blue Cruise performs driving tasks and its driver monitoring system. Ford is cooperating with the investigation. The National Transportation Safety Board (NTSB) is also investigating the San Antonio crash and plans to issue safety recommendations. Blue Cruise allows drivers to take their hands off the steering wheel on highways, but Ford emphasizes that it is not fully autonomous and drivers must remain attentive. Both NHTSA and NTSB have previously investigated crashes involving automated driving systems.

 

Detroit Local News

Techcrunch

Bloomberg

Forbes

The Globe and Mail

Ahead of the release of Kraft Heinz's first-quarter results this Wednesday, new chief executive Carlos Abrams-Rivera talks to the Wall Street Journal about his commitment to making the company's products healthier, in part by cutting back on sodium and sugar levels. In Heinz ketchup, for example, the company is testing hops, a natural preservative, in place of sodium, adding more tomatoes for sweetness, and making the condiment with less heat, also for sweetness. Mr Abrams-Rivera said it will take time to make the firm's products healthier: “It’s not a one-year thing, it’s not a one-moment thing. You have to bring consumers along with this journey."

 

Wall Street Journal

U.S. House and Senate negotiators have reached a deal to increase air traffic controller staffing and funding to help prevent runway close call incidents. However, the retirement age for airline pilots will not be raised from 65 to 67. The House of Representatives previously voted in favor of raising the retirement age, but the Senate Commerce Committee rejected the proposal. Congress is working on a new $105bn, five-year deal for the Federal Aviation Administration (FAA). The Senate is expected to vote on the proposal this week. 

 

Reuters

Unionized hotel workers in the U.S. and Canada are planning a multi-city rally on May Day to demand significant pay raises. Talks will be held with Marriott International, Hilton Worldwide Holdings, and Hyatt Hotels Corp to secure new contracts for about 40,000 workers. The workers aim to reverse pandemic-era staffing and service cuts and seek higher wages. Hotel revenue per available room in 2023 reached a record high, but staffing per occupied room is down since 2019. Negotiations are set to take place during the summer.

 

Reuters

U.S. police departments have reported a year-over-year increase in sworn officers for the first time since the COVID-19 pandemic and the police killing of George Floyd. According to a survey by the Police Executive Research Forum, more officers were hired in 2023 than in any of the previous four years, and fewer officers resigned or retired. However, large departments are still below their staffing levels from January 2020. Many departments are struggling to attract and retain officers, despite offering incentives such as higher pay and signing bonuses. Changes in application requirements and hiring processes are being considered, but lowering standards is not supported. The survey also showed a decrease in resignations and retirements, attributed partly to a shift in public officials' views on public safety departments.

 

U.S. News