Sustainable Finance Newsletter - Trump's industrial policy kicks off

By Ross Kerber

Aug 27 (Reuters) - This is the weekly Reuters Sustainable Finance Newsletter, which you can sign up for here.

The idea of "state capitalism" has been anathema to generations of U.S. politicians, especially Republicans. Former U.S. president Barack Obama, a Democrat, took heat after solar company Solyndra went bankrupt despite receiving a $535 million Department of Energy loan guarantee, for instance. In another case, Republican leader Mitt Romney in 2008 argued against a government bailout of the top U.S. automakers.

That was then. In the wake of U.S. President Donald Trump's deal for a 9.9% stake in computer chip manufacturer Intel INTC.O, investors now are taking stock of how companies should and will behave in what could become a new era of U.S. industrial policy.

Among other things, boards must now consider a shareholder base that includes political leaders tied to the same Washington institutions that regulate them like the U.S. Federal Trade Commission, or that buy their products like the Pentagon. They also must pay closer attention to barrages of social media messages from the current occupant of the Oval Office.

You can read more about these concerns in my main story this week, linked below. I've also put in links to our coverage of new stewardship leaders at top fund managers and an update on China's carbon market.

Please follow me on LinkedIn and/or Bluesky. You can reach me via ross.kerber@thomsonreuters.com.

Trump's industrial policy kicks off

The U.S. government's new stake in Intel INTC.O is making some investors nervous that President Donald Trump's deal heralds an era of government meddling in private industry, particularly as the arrangement followed Trump's call for the resignation of the computer chip maker's CEO.

The deal, announced on Friday, converts $11.1 billion in Chips Act grants and other government funding into a 9.9% equity stake in Intel. The company's press release announcing the deal included statements from the CEOs of Microsoft MSFT.O, Dell DELL.N and other companies praising the move.

Investors said this level of tractability was not usually associated with relations between businesses and Washington. Trump had said on social media that Intel CEO Lip-Bu Tan wanted to keep his job and "ended up giving us $10 billion for the United States."

"It sets a bad precedent if the president can just take 10% of a company by threatening the CEO," said James McRitchie, a private investor and shareholder activist in California who owns Intel shares. The statement, he said, effectively sends the message that "we love Trump, we don't want 10% of our company taken away."

You can read the full story by clicking here.

Company News

Apple AAPL.O misled consumers by advertising its Apple Watch as a carbon-neutral product, a court found. The tech company had based its claim on a project in Paraguay to offset emissions by planting eucalyptus trees.

Poland's consumer watchdog accused Netflix NFLX.O of raising fees without proper consumer consent. The streaming company said it will work to "clarify this matter" with this regulator.

T. Rowe Price TROW.O hired a veteran executive from Institutional Shareholder Services to lead proxy voting and governance engagement efforts. Rival fund manager BlackRock BLK.N also made changes to its stewardship team.

On My Radar

China aims for a nationwide carbon market to be largely established by 2030, with absolute emissions caps in some industries starting in 2027, leaders said.

Garment workers in developing countries suffer from rising global temperatures but are often left out of fashion company climate strategies that focus largely on carbon accounting, according to this commentary piece.

If all stock delistings are a tragedy, that of China Evergrande Group stands out as a special $51 billion to bust saga as told by our Clare Jim in Hong Kong.

Leave it to the Australians for a blunt take on Trump's effort to fire Fed Governor Lisa Cook. "It's another crack in the edifice of the United States and its investibility," said Kyle Rodda, senior financial market analyst at Capital.com in Melbourne.