#VirginGroup

Telstra’s CEO should close down operations to be on the right side of history

Telstra CEO Andy Penn has suggested that climate change will be the “defining challenge” of the decade but proclaims he doesn’t want to be drawn into the government policy debate. 

He has called for “more urgent action on climate as changing weather patterns deliver more frequent bushfires, floods, droughts and storms” at an American Chamber of Commerce lunch yesterday. 

What a pity that the UNIPCC’s March 2018 report on weather extremes (with respect to anthropogenic induced global warming) contradicted Mr Penn:

“…There is low confidence in observed trends in small-scale phenomena such as tornadoes and hail because of data inhomogeneities and inadequacies in monitoring systemsin some regions droughts have become less frequent, less intense, or shorter, for example, in central North America and northwestern Australia. There is limited to medium evidence available to assess climate-driven observed changes in the magnitude and frequency of floods…low confidence for the attribution of any detectable changes in tropical cyclone activity to anthropogenic influences..low confidence in projections of changes in extreme winds.. low confidence in projections of changes in monsoons…low confidence in wave height projections…overall low confidence because of inconsistent projections of drought changes…low confidence in projected future changes in dust storms…low confidence in projections of an anthropogenic effect on phenomena such as shallow landslides.”

Never mind what the scientists ‘actually’ think. Just run the narrative of the activists instead to prevent Extinction Rebellion nutcases from super glueing themselves to the lobby entrance. FNF Media could indulge you on what the scientists actually think of the IPCC. For those interested please see the link here. Spoiler alert – it is exceedingly critical.

Mr Penn said that businesses and individuals should become aware of their carbon footprints. He admitted Telstra is one of the biggest consumers of electricity in the country as data storage needs explode by up to 50% per annum.

If it is such a massive concern, Penn should put Telstra’s shareholder money where its mouth is and charge customers extortionate fees for data storage and data usage such that he can force them to lighten their evil digital-driven carbon footprint. That way he can slow his electricity consumption. Then, Telstra can await all of those woke customers fleeing Vodafone and Optus in droves to sign up for inferior service for more money. Not quite sure what shareholders would think of that…

Even better he could suggest to the board that they close the business for good for the sake of the planet. After all, by going the whole hog he can sleep safe in the knowledge that his kids and grandkids will know he was on the right side of history (the standard alarmist playbook) before we’re swept away by the rising sea levels. Think of all that energy saved.

Unfortunately, we’ve seen this vacuous corporate virtue signalling tokenism before. Who could forget the comments made by Josh Bayliss, the CEO of Virgin Group? He said,

“It’s definitely true that right now every one of us should think hard about whether or not we need to take a flight.”

Why didn’t he close down the airlines in the portfolio? Instead of waiting for his customers to grow a conscience via flight shaming and do the right thing why not force their choice? The obvious answer is that it’s hypocritical in the extreme.

The International Air Transport Association (IATA) has already positioned behind the flight shaming movement to do its bit for climate change. In a two page flyer, it covered the idea that we reckless passengers must consider our carbon footprint but at the same time help the U.N. raise $40bn in taxes, sorry ‘climate finance,’ between 2021 and 2035.

The Carbon Offsetting & Reduction Scheme for International Aviation (CORSIA) is the vehicle which the UN’s International Civil Aviation Organization (ICAO) intends to liberate us from our sins and help fund the waste so endemic in the NY based cabal. Wherever the UN is involved expect a sinister agenda behind the virtue.

All airlines have been required to monitor, report and verify their emissions on international flights since Jan 1, 2019. Operators will be required to buy “emissions units” from the UN. If one asked the UN would it prefer emissions to be cut or taxes to be raised, it would select the latter every time.

Still, the easiest way to gauge public fear on climate change is not via a biased think-tank poll but monitor individual consumption patterns. It isn’t just population growth, because it isn’t growing  at these rates. Three examples:

  1. Aircraft demand – In 2019, Boeing reported airlines will need around 44,000 new commercial aircraft worth $6.8 trillion by 2038, vs. 43,000 planes worth $6.49 trillion estimated in 2018. There are currently 25,830 commercial airliners in service.
  2. Smartphones – estimated that the number of global mobile subscriptions could be 13.8 billion in 2025 and 17.1 billion in 2030. The number of global mobile subscriptions has already reached 6.7 billion in 2013. Smartphones will grow from 6.3bn units in 2020 to 12.1 billion by 2030.
  3. Energy Consumption  – the U.S. Energy Information Administration (EIA) projects that world energy consumption will grow by nearly 50% between 2018 and 2050. Energy consumed in the buildings sector (including residential and commercial structures), increases by 65% between 2018 and 2050, from 91 quadrillion to 139 quadrillion Btu. Rising income, urbanization, and increased access to electricity lead to rising demand for energy.

So good luck trying to get people to feel awkward about their individual carbon footprints. They’ll be to busy charging their mobile devices while booking the next overseas holiday to the Maldives.

IATA caves to the climate change cabal to fill the UN coffers

The International Air Transport Association (IATA) has got behind the movement to do its bit for climate change. In a two page flyer, it covered the idea that we reckless passengers must consider our carbon footprint but at the same time help the U.N. raise $40bn in taxes, sorry ‘climate finance,’ between 2021 and 2035.

The Carbon Offsetting & Reduction Scheme for International Aviation (CORSIA) is the vehicle which the UN’s International Civil Aviation Organization (ICAO) intends to liberate us from our sins and help fund the waste so endemic in the NY based cabal. Wherever the UN is involved expect a sinister agenda behind the virtue.

All airlines have been required to monitor, report and verify their emissions on international flights since Jan 1, 2019. Operators will be required to buy “emissions units” from the UN. If one asked the UN would it prefer emissions to be cut or taxes to be raised, it would select the latter every time.

But why? Passengers don’t seem to demand airlines flight shame them before they board. On the contrary, many carbon offset schemes exist among airlines but hardly any passengers elect to pay them. Note the world’s largest offset program below.

In its 2017 Annual Report, Qantas boasted,

We have the world’s largest airline offset program and have now been carbon offsetting for over 10 years. In 2016/17, we reached three million tonnes offset.”

Carbon calculators tend to work on the assumption of 0.158kg CO2/passenger kilometre.

In the last 10 years, Qantas has flown around 1 trillion revenue passenger kilometres. While the literature in the annual report denotes one passenger offsets every 53 seconds, the mathematical reality is simple – 2% of miles are carbon offset. So that means that 98% of people couldn’t care less.

Perhaps more embarrassing is that The Guardian noted in Jan 2018 that,

Qantas [was the] worst airline operating across Pacific for CO2 emissions

Kind of a massive load of hot air when you do the maths!

Which begs the question, why does the IATA feel compelled to intervene in ramping up the costs of travel when passengers aren’t calling for it? IATA’s job is to keep airlines flying and support the growth where it forecasts a doubling of air travel by 2030. Airlines have been ordering Boeing 737 MAX & Airbus A320neo short-haul jets as well as long-range B787 & A350 in huge numbers to take advantage of fuel efficiency that helps lower operating costs.

By IATA’s own admission, global air travel in totality is only 2% of man-made CO2 emissions. That is to say that all air travel is responsible for 0.00003% of CO2 in the atmosphere. Big deal! What is the point of taxing an industry where the footprint is so minuscule?

Take Josh Bayliss, CEO of Virgin Group. He said,

“It’s definitely true that right now every one of us should think hard about whether or not we need to take a flight.”

Why doesn’t he close down the airlines in the portfolio? Instead of waiting for his customers to grow a conscience via flight shaming and do the right thing why not force their choice? The obvious answer is that it’s hypocritical in the extreme.

Airlines operate on about 70% capacity load factor break even so if Virgin flights end up being half full thanks to flight shaming he’ll only end up having his fleet of jets spewing more or less the same CO2 per flight which will ultimately put the airline out of business.

It is all too stupid. IATA joins the growing list of bodies petrified to talk in hard numbers about true impacts. When the 22,000 pilgrims that fly each year to UN COP summits around the world to kneel at the altar of the IPCC practice what they preach, CM may start to feel concerned Until then, CM will keep calling the climate hoax out. Deeds, not words, IATA!

Go woke, go broke

Yet another example of why CM has cancelled his FT subscription. Where is the critical reporting? This article by Pilita Clark doesn’t critique the ridiculous movement by corporates to virtue signal but falls in line with the stupidity.

Maybe the best metaphor for the woke corporation is parsley. It often looks nice as a garnish but 99.9% of us push it to the side of the plate and leave it to be thrown away.

Corporate hypocrisy is everywhere.

Take Josh Bayliss, CEO of Virgin Group. He says,

“It’s definitely true that right now every one of us should think hard about whether or not we need to take a flight.”

Why doesn’t he close down the airlines in the portfolio? Instead of waiting for his customers to grow a conscience and do the right thing why not force their choice? The obvious answer is that it’s hypocritical.

Airlines operate on about 70% capacity load factor break even so if Virgin flights end up being half full he’ll only end up spewing more or less the same CO2 per flight and go out of business. British Airways, EasyJet and Ryanair will welcome Virgin’s virtue signaling. Go woke, go broke.

Qantas has the world’s largest carbon offset program yet only 2% of passengers elect to pay. That’s the extent of the belief in global warming.

Blackrock’s chief Larry Fink said his asset manager needs to do more than just make money yet it only backed 10% of the climate related shareholder proposals. Why? Supposedly because they would crush profits. All talk, little walk.

BP surprisingly helped prevent a carbon tax it openly launched support for. A fossil fuel company trying to undermine a carbon tax? Wow. Who’d a thunk?

UK shadow chancellor John McDonnell has said Labour would seek to delist companies from the London Stock Exchange that didn’t meet their climate change commitments. In order to meet that, will that mean a child daycare company will be burnt at the stake for not brainwashing kindergarten kids? Will there be a minimum pot plant to child ratio?

How would regulations impact the myriad of different businesses that would trigger being dumped from the LSE? What standard would be applied? CM is betting corporates jus need to “file” a governance statement on climate change which no one will read. As long as 100% of companies file, nothing will happen.

Pretty easy to avoid too. Companies could list on Nasdaq or the Singapore exchange to avoid the regulations and still raise capital. Did you think of that Mr McDonnell? No because it is all about being woke and there are plenty of alternatives to dodge stupid policy. Capital is global.

Pilita Clark closes her article by saying,

“Yet the climate debate is shifting and I am willing to bet that companies failing to match their green claims with solid action face far greater risks than they ever have before.”

Like much of the climate religion, few hard facts are ever presented except the date we are all supposed to die. Even then that is an ever-shifting goal post. We can be assured that when 2028 arrives all of a sudden we’ll have another 12 years to do something. A bit like the joke where a patient asks his doctor how long he has to live and is given an extension so he can pay his bill.

The ever-growing tide of the “woke” corporation is going to thwart ingenuity and entrepreneurship. It is corporate suicide to pander to this nonsense. It is not for companies to bang on about their wonderful commitments. Customers and shareholders can decide for themselves. Maybe if companies listened to both groups they would find profits go up. People are growing sick and tired of being told what to do. How to think.

The world is littered with corporate wokeness backfiring. The irony is much of it is self-inflicted. By trying to create false images of virtue, the results have been disastrous.

P&G had to write off billions from its Gillette brand for the toxic masculinity campaign. Before the campaign Gillette was ranked 7th out of 45 health and grooming brands. After, rock bottom.

There is almost a wave of corporate fear twisted by a minority of social activists like Sleeping Giants which create false narratives about public perceptions of evil companies. There is a flip side.

Chick-fil-A was established by Southern Baptists. They don’t ram their Christian beliefs at all in the restaurants. Activists tried to boycott the fast food outlet because one of the directors personally didn’t support same-sex marriage. Guess what, store numbers have doubled and revenues tripled over the last decade.

Chick-fil-A states it’s mission is, “To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A.”

Chick-fil-A is notable by its closure on Sundays, Thanksgiving and Christmas. So people are well aware ofthis corporate backing its religious beliefs.

There is a difference between founding a company on certain beliefs and concocting them to ride a wave of hijacking social movements. Customers are aware of the difference.

Virgin Group can wax lyrical about its concerns in trying to save the planet but the only woke thing would be to shut down. Pushing the guilt back on its customers shows how hypocritical the airline is.

To be honest it gets tiring waiting in corporate lobbies watching flat panel TVs advertising all of the wonderful community things they do. 99% of the transaction with any corporate will be driven by the ability to deliver goods and services, not supporting tree planting. It is not to diminish charity or good intentions, rather to cut back on acting as though they’re angels to avoid being put on an imaginary naughty step that doesn’t exist.

Perhaps CM should recommend a portfolio of non-compliant ESG companies. When the market sells off, all the passive money in ESG compliant names should well underperform those that don’t. Perhaps an asset manager should establish an ETF with a basket of companies that just provide product or service rather than garnish it with lashings of corporate virtue. Here is betting it would be a contrarian winner.