🌎 The ESG reset

Thursday, June 2, 2022 by Snacks
Green, washed (Mike Kemp/Getty Images)

Green, washed (Mike Kemp/Getty Images)

Green, washed (Mike Kemp/Getty Images)

Green, washed (Mike Kemp/Getty Images)

Yesterday’s Market Moves
Dow Jones
32,813 (-0.54%)
S&P 500
4,101 (-0.75%)
11,994 (-0.72%)
$29,570 (-6.97%)

Hey Snackers,

Vegas chapels are all shook up after Authentic Brands, the licensing company that controls Elvis’ name and likeness, ordered them to stop using Elvis impersonators in ceremonies — a major hit to Sin City’s $2B/year wedding biz. Less “Burning Love,” more “Crying in the Chapel.”

Stocks ticked down to kick off the month, as investors keep rate-driven recession fears top of mind. US job openings dropped by 455K in April, but there’s still a massive gap between open positions and available workers (nearly 5.5M more jobs).


1. Deutsche Bank’s under investigation over greenwashing allegations as the ESG investing boom implodes

Green-washed up… More trouble at Germany’s biggest bank: for the second time in a month, authorities raided scandal-plagued Deutsche Bank’s Frankfurt HQ. This time it was to investigate allegations that DWS, an asset-management subsidiary of DB, has been “greenwashing” (aka: misleading investors about its environmental, social, and corporate governance — or ESG). In the fall-out, the CEO of DWS said he’d step down.

  • ESG, meet SEC: The Securities and Exchange Commission began investigating DWS last year after an ex-employee said it fudged ESG info to woo investors (last week the SEC fined BNY Mellon $1.5M for misleading ESG claims).

Sustainable investment, unsustainable pace... ESG investing has exploded as investors demand socially responsible investment options. But ESG claims are unregulated and have been criticized as arbitrary. One example: the S&P’s ESG index includes oil giant Exxon, but not EV pioneer Tesla. Some have dismissed ESG investing as a “virtue bubble.” Now it may be bursting:

  • Going (less) green: BlackRock, an ESG pioneer (and the world’s biggest money manager), backtracked and said it would support fewer “constraining” climate proposals.
  • The rise of “anti-ESG”: Billionaires Peter Thiel and Bill Ackman recently backed Strive, an asset management firm that specifically avoids politics.

This could be a Great Green Reset… the ESG strategy seems to be falling out of favor: after outperforming the S&P 500 in last year’s bull market, ESG funds are underperforming the S&P in this year’s downturn. But sustainable investment as a concept isn’t going anywhere: investors have already parked $41T in ESG funds. Instead, future ESG investors might seek more realistic forecasts — and play by stricter rules. Meanwhile, the SEC plans to keep cracking down on misleading ESG claims, though it still hasn’t standardized ESG criteria.


2. iRobot updates the Roomba’s “brain,” betting its OS can be a differentiator in the crowded smart-home space

Sounds like a sci-fi thriller... actually a vacuum company. iRobot is the publicly traded consumer robot biz famous for Roomba (aka: the popular self-driving vacuum). Its sales soared for a while during the pandemic as homebound and hygiene-conscious adults ordered smart vacuums to clean up after their kids. But iRobot's US revenue growth has been slowing. Now:

  • New brain: iRobot just revamped its robo-vacuum operating system to lay the foundation for a more sophisticated understanding of your home life. iRobot Genius, its AI platform for smart vacuums and mops, is now iRobot OS.
  • Features include the ability to identify and dodge phone chargers, stray T-shirts, and dog poop. With computer vision iRobot’s newest vac can also understand specific commands like "clean under kitchen table." Also: preferences like extra sweeps during pet-shedding season and fewer sweeps for the guest room.

Competing for Fluffy's approval... Roomba isn't the only one: last year Amazon rolled out a $1K Alexa-powered robot named Astro (aka: a 10-inch tablet on wheels). Smart-device adoption has surged thanks to speakers from Amazon and Google, along with thermostats, security cams, and light dimmers. iRobot's vacuums work with Alexa, Google Assistant, and Siri voice commands — but it may not be enough to win in the increasingly crowded market.


Intelligence is useless without context… at least in the smart-home space. iRobot’s CEO told The Verge that the primary differentiator of a home robot is intelligence (aka: software brain vs. hardware body). Key to that is context — a deep understanding of your home and habits. Think: air purifiers understanding when a room is empty before going into noisy turbo mode (iRobot’s working on it). In the future, we’re picturing showers that turn on at your preferred temp when you wake.

What else we’re Snackin’

  • Out: Meta COO Sheryl Sandberg, Zuck’s #2 and one of the most powerful people in tech, is leaving the company after 14 years. Sandberg helped turn Facebook into a multibillion-dollar biz.
  • Booked: Delta said sales have snapped back to pre-pandemic levels, which is helping to offset soaring fuel costs. The airline canceled 700 flights last weekend, previewing a turbulent summer for the flying public.
  • Hip: GM’s Buick unveiled a sleek "Wildcat" EV concept as it plans to go electric-only by 2030. Legacy automakers are trying to shake their old-school image with flashy electrified models for younger buyers.
  • $17: Seattle will be the first US city to set a minimum wage for app-based delivery drivers. The new "Pay Up Bill" is meant to stabilize income for gig workers with unpredictable schedules.
  • WFW: Elon Musk fired off an email to Tesla employees, demanding they either get back to the office or leave the company. Elon’s been letting some staff work remotely, but says the option is “no longer acceptable.”

Snack Fact of the Day

A third of Americans who earn $250K+/year live paycheck to paycheck — and many are millennials


  • OPEC meeting. Weekly jobless claims. Platinum Jubilee weekend starts in the UK.
  • Earnings expected from: CrowdStrike, Hormel, Okta, Asana, The Duckhorn Portfolio, Samsara, Zumiez, Duluth Trading Co., and Lands’ End

Authors of this Snacks own shares of Exxon, GM, Google, Tesla, Delta, Amazon, and Apple

ID: 2227541

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