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The Morning Risk Report: Fund Managers, Regulators Wrestle Over Plans to Tighten ESG Rules
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ESG funds have boomed in recent years, exceeding $350 billion in net assets in 2021 in the U.S., as investors look to fund companies that are addressing climate change and other issues. But murky disclosures and lax standards are driving regulators to tighten the rules.
Proposed regulations from the Securities and Exchange Commission would establish a common benchmark for how sustainable investment products are labeled, marketed and reported. That could lead to investors pulling cash from funds that don’t appear to be taking the standards seriously.
“In the short term, these rules, if adopted, may result in a decrease in total assets invested in funds that purport to be sustainable,” Mindy Lubber, chief executive of nonprofit sustainability advocacy group Ceres, wrote in a letter to the SEC. “We believe that ultimately, they would bolster confidence in climate and other ESG investment products.”
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Content from our Sponsor: DELOITTE
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Why Cloud Investments May Not Be Living Up to the Hype
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The COVID-19 pandemic accelerated many organizations’ push to embrace the cloud. Now it’s time to become more strategic, according to recent research. Read More ›
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WSJ Risk & Compliance Forum
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Sign up for the next WSJ Risk & Compliance Forum on Nov. 16 for discussions on the critical issues facing corporate risk & compliance professionals, including keeping up with sanctions, screening for forced labor, and proposed U.S. rules on climate change and cybersecurity. Register here.
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Crypto Criminals Laundered $4 Billion Through DeFi Exchanges, Cross-Chain Bridges, Report Says
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Criminals have used decentralized-finance exchanges and so-called coin-swap services to launder more than $4 billion worth of illicit crypto assets since the first quarter of 2020, a new report from blockchain analytics firm Elliptic Enterprises Ltd. said.
The report, published Tuesday, found that since early 2020 about $1.2 billion of stolen crypto from DeFi protocols or exchange thefts has been swapped using decentralized exchanges. Another $1.2 billion of illicit crypto assets have been laundered through coin-swap services, which allow users to trade assets within and across different blockchains without opening an account and are particularly popular with criminals and Russian online forums, the report said.
Elliptic added that these sorts of cross-bridge transactions–in which users can exchange cryptocurrency from one blockchain network to another without going through a centralized service like an exchange–are emerging as facilitators of money-laundering. The firm said in an earlier report that at least $540 million has been laundered through RenBridge, a blockchain bridge that enables cross-chain transactions.
—Mengqi Sun
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The Minerva Symphony tanker, which sails under the Greek flag, and the terminal of the Caspian Pipeline Consortium, left, in the Black Sea near Novorossiysk, Russia, in 2021. PHOTO: /ASSOCIATED PRESS
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The European Union has advanced work on a price cap for Russian oil under an approach that keeps the U.S.-led effort on track, but holds off on final approval.
EU member states are set to agree on a two-stage approach to the international price cap on Russian oil, which is being developed within the Group of Seven industrial economies. EU officials are preparing legislation needed to implement the measure, but will hold off approving it until the rest of the G-7 is ready, diplomats and officials said.
The EU approach reflects concern among some member states about the proposal, which would place a maximum price on what can be paid for Russian seaborne oil. Hesitation is greatest in EU members with large shipping sectors, including Greece, Cyprus and Malta.
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The Biden administration is preparing new export controls on semiconductors and the machines to make them, the latest push in its effort to deny China the ability to make the fastest, most cutting-edge circuitry possible, according to people familiar with the situation.
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European Union lawmakers backed legislation to create a common standard for charging smartphones and other portable electronics in a move that will effectively ban the sale of new products in Europe that use Apple Inc.’s proprietary Lightning charger port.
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Lawyers for Trevor Milton are anchoring the Nikola Corp. founder’s defense against securities-fraud charges on the testimony of a Harvard professor, seeking to persuade jurors that the former chief executive’s allegedly misleading tweets and podcast interviews didn’t move markets.
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Former President Donald Trump’s lawyers urged the Supreme Court to weigh in on the FBI’s search of his Mar-a-Lago home, opening the door for the top U.S. court to address the unprecedented investigation.
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A wrecked Russian armored vehicle and tank on a road between Lysychansk and Lyman, Ukraine. PHOTO: MANU BRABO FOR THE WALL STREET JOURNAL
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Ukrainian forces accelerated their advance into Russian-held areas of the southern Kherson region as Western officials played down the likelihood of Russia using nuclear weapons in retaliation for its military defeats.
Ukrainian troops announced the liberation of several towns, while Moscow sought to prevent an encirclement of its forces in the east and south of the country. Soldiers posted footage of themselves unfurling the Ukrainian flag over Davydiv Brid and claimed the liberation of Starosillya, Arkhangelskoye and Velyka Oleksandrivka.
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Bringing inflation down from 40-year highs is likely to take time and will require a slowdown in economic growth and reduced demand for workers by employers, a Federal Reserve official said Tuesday.
Those efforts are showing tentative signs of progress, said Fed governor Philip Jefferson, in his first public remarks since taking office in May.
But Mr. Jefferson said he remains concerned that higher prices could change consumer expectations around inflation in a way that makes further price increases self-fulfilling.
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The derivatives-based investment strategy that tipped the U.K.’s pension sector into crisis started with good intentions: Help companies fulfill promises they made to employees to pay a steady income through retirement.
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The Organization of the Petroleum Exporting Countries and its Russia-led allies are preparing for a potentially contentious meeting on Wednesday, when they gather in-person for the first time in years to discuss a production cut of up to 1.5 million barrels a day that not all players support, OPEC officials said.
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The protests that have gripped Iran for three weeks started over a headscarf, but are morphing into a broader movement fueled by middle-class anger over the country’s collapsing economy.
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North Korea’s latest missile launch over Japan represents a major escalation that returns Pyongyang to a pattern of provocation it hasn’t used in years, testing how much international resolve can be summoned to thwart it.
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World trade in goods is set to slow more sharply than previously expected next year, possibly easing inflationary pressures but raising the risk of a global recession, a new forecast shows.
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Google’s settlement with Arizona comes after the company suffered other legal setbacks last month. PHOTO: ANNEGRET HILSE/REUTERS
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Alphabet Inc.’s Google will pay the state of Arizona $85 million to settle a 2020 lawsuit in which the search giant was accused of deceiving users by recording their locations even after they tried to turn off the company’s tracking on their smartphones and web browsers.
The outcome of the case “proves no entity, not even big tech companies, is above the law,” Arizona Attorney General Mark Brnovich said in a prepared statement.
Google denied any wrongdoing. A company spokesman said the case is based on outdated product policies that were changed years ago.
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Elon Musk was set to be deposed this week as part of preparations for trial. PHOTO: SUSAN WALSH/ASSOCIATED PRESS
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Elon Musk has offered to close his acquisition of Twitter Inc. on the terms he originally agreed to, a sudden and unexpected comedown for the billionaire entrepreneur that could end a monthslong battle he has waged to get out of the $44 billion deal.
Should the parties agree to do so, the proposal would enable them to avert a high-stakes trial set to begin soon and potentially finalize the deal within days. It would represent a major victory for the social-media company.
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Bridgewater Associates founder Ray Dalio stepped down as co-investment chief of the largest U.S. hedge fund firm, nearly five decades after he started it in his Manhattan apartment.
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The Menlo Park, Calif., headquarters of Meta Platforms, which is rethinking how it uses space in offices. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Meta Platforms Inc. plans to shrink some of its offices as many of its employees continue to do their jobs from home, the latest big company to reassess its real estate in the hybrid-work era.
The social-media giant will rearrange some office layouts, clustering desks and teams together to effectively put employees in closer proximity, the company’s top real-estate executive said in an interview. The goal, he said, is to make the spaces more dynamic.
“One of our jobs is to recalibrate our space,” said John Tenanes, vice president of global facilities and real estate at Meta. “We’re creating a smaller venue, and for the same amount of folks, but it’s a smaller venue and we’re hoping that really drives a life in the building: more energy, more activity.”
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Apple Inc. suppliers added manufacturing operations close to the Cupertino, Calif.-based tech company in fiscal 2021, a sign of how the pandemic and geopolitics are beginning to reshape supply chains.
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Shell PLC Chief Executive Ben van Beurden said he expects to see additional taxes on the oil-and-gas industry as a way of helping to protect consumers from higher energy prices, and warned that a price cap on Russian oil being pushed by Western governments would be difficult to implement.
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Micron Technology Inc. has agreed to invest as much as $100 billion to build a semiconductor-manufacturing campus in upstate New York, adding to a wave of chip-making plans in the U.S. as Washington tries to boost domestic manufacturing of those critical components.
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Amazon.com Inc. is halting hiring in its core retail division through the end of the year, making it the latest big tech company to pull back on hiring as it contends with economic headwinds.
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Macy’s credit-card data early in the year revealed cracks in shopping trends, executives said, so they cut back on some merchandise orders.
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