Good morning. In a gray four-story office building above a nightclub with a black door here, a company founded by a Turkish sock and underwear magnate has transformed into one of the world’s largest shipowners transporting Russian oil.

The firm, Beks Ship Management, has bought 37 ships since 2021, many of them aging oil tankers. Companies such as Beks are a critical element in Russia’s attempts to keep supplying oil around the world and fund its war in Ukraine.

• On the outside: Many evade Western sanctions by operating outside the usual industry standards, often forgoing insurance with the P&I Clubs, the global networks that insure some 90% of the world’s commercial shipping.
   
• Safety concerns: The vessels are frequently aging, some 20 years old or more, and have changed owners multiple times, raising safety and environmental concerns. Shipping analysts say there are growing questions about whether the tankers are properly surveyed, and whether Moscow would pay out in the event of an accident. Russia has said it is pushing for its insurance system to be internationally recognized.
   
• Russia adapts: The fleet is still sailing, however, and, along with other shipping companies, is helping Russia adapt to the West’s sanctions, setting up a global stalemate.

Why ESG ratings are all over the map.

Tesla could be a poster child for the confusion surrounding ESG ratings. Should the carmaker have a high ESG score because it makes electric vehicles, a low one because of some of its labor practices and autopilot risks, or a middling one that averages things out?

Different ratings companies give different answers and therein lies the problem: Many investors look to ESG scores as an easy way to compare firms based on their environmental, social and governance practices, but so far they have largely failed to deliver that.

• Supply-Chain Sustainability Benefits Investors, Study Finds

Hawaiian Electric knew of wildfire threat, but waited years to act.

During the 2019 wildfire season, one of the worst Maui had ever seen, Hawaiian Electric concluded that it needed to do far more to prevent its power lines from emitting sparks.

Nearly four years later, the company has completed little work. Now, it is facing scrutiny, litigation and a financial crisis over indications that its power lines might have played a role in igniting the deadliest U.S. wildfire in more than a century.

• Hawaii Fires Turn a Safe Investment into a Big Risk

• The U.S. auditing watchdog is trying to remake itself, but it isn’t easy.
   
• Digital asset companies will have to collect and transmit data on cryptocurrency transfers under new rules from the U.K.’s financial regulator, as the country implements a law intended to stop the movement of digital assets for illicit activity.
   
• Brighthouse Financial said some of its policyholders’ personal data, including Social Security numbers and zip codes, were compromised in a cybersecurity incident at a third-party vendor.

Why are the Maui wildfires so devastating?

A confluence of powerful downslope winds, an existing moderate to severe drought and invasive grasses helped fuel wildifres that tore through the Hawaiian island of Maui, said Daniel Swain, a climate scientist at the University of California, Los Angeles.

A decline in farming is also raising the risks of wildfires. Here’s a look at some of the contributing factors behind the deadly blazes. 

• Canadian Wildfires Force Evacuation in Far North

• A sluggish economy, higher interest rates and the expiration of pandemic-era life support for ailing companies is forcing more businesses in Europe to declare bankruptcy.
   
• A World War II-era ship rusting atop a tiny, teardrop-shaped reef in the South China Sea has become the center of a new round of tensions between the Philippines, a U.S. ally, and China.
   
• The European Union’s gas-storage levels are on the brink of hitting their pre-winter target more than two months early, a boost for the bloc’s economy after energy ties with Russia were all but severed last year. Meanwhile, Russia’s economy has reached its speed limit.

• Costs to ship goods from Asia to the U.S. are turning sharply upward.
• Plant-based plastics, the more eco-friendly option, are seeing a surge in production and use.
• 🎧 Listen to a former crypto-exchange founder, Charlie Shrem, advocate for more compliance​ among crypto companies. 

• Ozempic and Wegovy are tilting the scales of Denmark’s economy.
   
• “Barbie,” Greta Gerwig’s blockbuster rom-com about a doll that becomes a human and enters the real world, is facing its own real-world problems: censor boards in parts of the Muslim world.
   
• A cargo ship became the first civilian vessel to safely travel from Odesa to the southern Black Sea, defying a Russian blockade of Ukraine’s largest ports and setting a possible precedent for future shipments.
   
• Despite a national housing shortage, tens of thousands of empty residential lots in Chicago, Detroit, Pittsburgh and elsewhere are beyond the reach of developers or kept vacant by owners because of legal and government obstacles that cities are now trying to knock down.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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