Shell is first energy company to link executive pay and carbon emissions

Royal Dutch Shell is giving its executives a powerful new reason to care about the environment. The Anglo-Dutch energy firm said Monday that it will establish short-term carbon emissions targets starting in 2020 after coming under pressure from investors. In an industry first, it plans to link executive pay to hitting the targets. Major shareholders … Continue reading “Shell is first energy company to link executive pay and carbon emissions”

Royal Dutch Shell is giving its executives a powerful new reason to care about the environment.

The Anglo-Dutch energy firm said Monday that it will establish short-term carbon emissions targets starting in 2020 after coming under pressure from investors. In an industry first, it plans to link executive pay to hitting the targets. Major shareholders including the Church of England and Robeco have demanded that Shell do more to tackle emissions. They say its earlier goal of cutting carbon emissions by half by 2050 did not go far enough.

    Shell (RDSA) said in a statement that it would set carbon reduction goals that cover periods of three to five years. The targets will be set on an annual basis, and run to 2050.The oil company did not set out specific carbon benchmarks on Monday. And it said that shareholders would not vote on changes to executive remuneration until 2020.Read MoreClimate Action 100+, a group of 310 investors with over $32 trillion in assets under management, said in a joint statement with Shell that it strongly supported the company in taking “these important steps.” Shell made the announcement as the United Nations’ annual talks on climate change got underway in Poland.COP24: Climate conference in the heart of Poland's coal countryShell said it would be the first major energy company to link executive compensation and carbon goals. Crucially, it’s committing to cut emissions generated by both its activities and the products it sells.”That Shell has now embedded its ambition in its remuneration policy offers confidence that Shell is really committed to it,” said Corien Wortmann, chair of the pension fund ABP.Moves by major corporations to reduce carbon emissions should help governments meet targets established under the Paris Climate Agreement, which seeks to keep rises in global temperatures below 2 degrees Celsius.The UN Intergovernmental Panel on Climate Change warned in October that the planet will reach the crucial threshold of 1.5 degrees Celsius by as early as 2030, precipitating the risk of extreme drought, wildfires, floods and food shortages for hundreds of millions of people. It said companies and governments must act faster.Why the Paris Agreement won't save us from climate change Emma Howard Boyd, chair of the UK Environment Agency, praised Shell on Monday for moving to set short-term targets.”We hope that this unique joint statement between institutional investors and an oil and gas major, will inspire other leaders to take bold action,” she said in a statement. “We would encourage the rest of the sector to follow Shell’s lead.”

      Shell announced in 2016 that it would link greenhouse gas emissions to executive compensation. It isn’t the only Big Oil company to come under pressure from investors over the environment. Last year, US-based ExxonMobil (XOM) agreed to reveal the risks it faces from climate change and the global crackdown on carbon emissions.

Here’s one market Amazon can’t easily crack: Car parts

Amazon is gunning to sell more car parts. But it will run up against fierce resistance from a small army of firmly established companies already doing just that.

One of them is Advance Auto Parts. Advance has designed a vast logistics network to deliver parts to auto mechanics and do-it-yourself car owners right away. “Independent garages have got to get that car fixed as fast as possible, or you’re not going to them again,” said Charlie O’Shea, lead retail analyst at Moody’s. “They measure delivery times in hours and minutes, not days.”

    Speed isn’t the only factor separating Advance (AAP), AutoZone (AZO) and O’Reilly (ORLY) from Amazon (AMZN). These companies have sharpened their focus on service, helping guide customers through repairs and the technical auto parts market.Wall Street believes in the companies’ long-term durability: Advance and O’Reilly’s stocks have outpaced Amazon’s this year.Read More

    Amazon’s moves into car parts

    But Amazon looms. The company started the Amazon Automotive store in 2006 and has been adding services ever since. “Amazon’s auto-part retail business is becoming too big to ignore,” MoffettNathanson analyst Greg Melich said in a report last month. It has recently accelerated efforts to sell car tires, batteries and accessories.The company struck a partnership with Sears that allows customers to buy Sears tires from Amazon and get them shipped to Sears Auto Centers around the country for installation.Amazon expanded a tie-up with Pep Boys earlier this month for a similar service at 1,000 of Pep Boys’ stores. Amazon also has an agreement with Monro Muffler Brake. “We’re pleased with the customer response to our Ship-To-Store offering,” Amazon’s director of automotive Adam Goetsch told CNN Business. Why Amazon could win the battle for holiday toy salesAmazon is adding more brands to its website and trying to get customers familiar with buying parts online. During the Black Friday and Cyber Monday stretch Amazon promoted car battery jump starters and wiper blades for the first time. They’re 30% off until December 1.Goetsch said the most popular automotive products among Amazon customers this holiday season included jump starters, wiper blades, cleanings kits, and RV accessories. That makes sense because more DIY customers are shopping online for components and accessories that they don’t immediately need to repair their cars.Amazon may want to sell more hard parts, like engines, crankshafts and flywheels. Online sales of components like brakes and fuel systems grew 29% in the past year, according to data from NPD Group and Rakuten Intelligence.”These categories have historically been challenging for the typical consumer to shop online for, but this task is getting easier,” NPD analyst Nathan Shipley said in a report.But those hard parts sales remain in Advance’s wheelhouse.

    Lightning-fast delivery

    Advance may seem like an unlikely company to thrive in the digital era, but the old-school car shop has taken steps to prepare for Amazon’s encroachment. Advance has close to 6,400 stores — some of them under banners like Carquest and Worldpac — and 54 distribution centers that put them close enough to its customers to make same-day or next-day delivery a snap. It has also built larger “hub” stores in higher-traffic markets that keep more items in stock. The company makes around 58% of its sales to technicians at garages, service stations and auto dealers, who often don’t know what parts they’ll need until the day begins. Rapid delivery is critical. Advance Auto Parts has bult out a rapid logistics network to meet customers’ parts needs.”There’s a huge need for inventory availability and quick delivery out there,” said Seth Basham, who covers the industry at Wedbush Securities. Although Amazon is looking to find retail partners, it would need to acquire an auto parts seller with similar distribution capabilities to be able to match Advance’s same-day network.”You’re not going to use Whole Foods to deliver auto parts to a garage. A brick-and-mortar presence is critical here,” O’Shea said.

    Auto parts experts

    Advance offers expert solutions in a complex auto parts market, something Amazon can’t provide. Staffers consult with customers to find the right products, and Advance offers training classes and posts on YouTube to help DIYers with repair jobs. Amazon is known for its variety, but Advance sells a wider range of national brands, private-labels, and original equipment from manufacturers.”The garage owners love this model,” O’Shea said. “You need somebody that has deep knowledge and knows the parts catalog backwards and forwards.”Adding to its advantage, Advance has close relationships with auto parts suppliers. Many manufacturers are wary of selling through Amazon because they worry that it would help the company learn the business and one day take it over. Why Amazon's HQ2 might be better for New York than for VirginiaAnalysts say carrying hundreds of thousands of different parts is ill-suited to a company without deep experience in the field. Amazon might have trouble stocking and selling bulky physical components and batteries — new engines, brakes, and exhausts — which are specific to a car’s make and model. On the other hand, selling car parts and batteries make up 65% of Advance’s total sales.But the company will need to keep adjusting its prices to keep up with Amazon’s relentless focus on providing value. A MoffettNathanson analysis found that Amazon’s prices were 29% lower than traditional competitors on 30 top-selling items. Advance risks losing its edge with such a wide pricing gap.

    A new Walmart deal

    But Advance should get a lift from its newest partner: Walmart (WMT).Advance struck a deal last month with the world’s largest retailer for a specialty store page on Walmart’s website. It believes the tie-up will allow it to increase its visibility online and reach more DIYers. Advance may see selling through Walmart as safer ground than Amazon. “I don’t know that Walmart wants to start manufacturing auto parts,” O’Shea said.

      The Walmart partnership is key because it will bring Advance into Walmart’s 2,500 auto care centers around the country. Leveraging Walmart’s store footprint will help Advance expand same-day delivery as competition intensifies and Amazon finds ways to speed up parts delivery.”The biggest challenge Advance faces is still the online channel. That’s the concern investors have out there,” Basham said. “How quickly do solutions by online players develop to become more material threats?”

Trump says China will cut tariffs on American cars

US President Donald Trump says China has agreed to cut tariffs on cars it imports from the United States.

Trump made the announcement in a tweet late Sunday in the United States, saying Beijing will “reduce and remove” the tariffs, which currently stand at 40%. He didn’t specify when the change would happen or what the new tariff level would be. Chinese Foreign Ministry spokesman Geng Shuang declined to comment Monday on Trump’s statement, referring questions to “the relevant authorities.” The Chinese Commerce Ministry, which typically makes announcements regarding tariffs, didn’t respond to a faxed request for comment.

    Trump’s tweet comes after he and Chinese President Xi Jinping agreed on Saturday to hold off on further tariffs in the trade war between the two countries for the time being. But the Chinese government has made no mention of cutting car tariffs as a result of the meeting between the two leaders in Buenos Aires.Four big differences that could endanger Trump and Xi's trade dealXi announced in a speech in April that China would cut tariffs on imported cars this year. His government followed through on that promise three months later, reducing them from 25% to 15%. Read MoreBut just days later, it imposed new additional tariffs of 25% on American-made passenger vehicles, one of the groups of products it targeted early in the trade war with the United States.The move has hurt the profits of major automakers like BMW (BMWYY) and Daimler (DDAIF), the owner of Mercedes-Benz. The German companies both ship SUVs to China from manufacturing plants in the United States. Shares in BMW jumped more than 6% on Monday morning in Frankfurt following Trump’s tweet, while Daimler’s stock leaped more than 5%.Tu Le, the head of research firm Sino Auto Insights, highlighted the lack of specifics in Trump’s tweet.

      It’s unclear whether the tariffs on US cars will be eliminated entirely or just reduced, Le said, adding that there’s no information on the time frame for the changes or which types of vehicles would be affected. If the tariffs are removed altogether, it would be “much more advantageous” for the German carmakers rather than US brands, he said.

Trump says China is now open to Qualcomm-NXP deal. But Qualcomm has paid $2 billion to walk away

Last summer a major merger between American chip maker Qualcomm and rival NXP fell apart, a victim of tension between the United States and China.

Now President Donald Trump says that China is willing to approve it. One problem: It might be too late. Both sides have already walked away from the deal. Qualcomm even paid a $2 billion penalty for doing so.Trump and Chinese President Xi Jinping met in Buenos Aires Saturday, and Trump told reporters that Xi said he would reconsider China’s prior decision to withhold approval of the planned $44 billion merger between Qualcomm and NXP.

    “If that deal came back to him, he would most likely approve it quickly,” Trump said. “Which is a big thing.”California-based Qualcomm (QCOM) confirmed in July it was terminating its proposed takeover of Dutch counterpart NXP (NXPI) after China failed to grant it regulatory approval. Read MoreQualcomm and NXP had waited for regulatory approvals for nearly two years before Xi’s administration let the clock run out. The takeover had been approved in eight other jurisdictions, including the European Union and South Korea, since it was announced in October 2016. It is not clear if the companies will pursue a merger again. Qualcomm moved ahead with a stock buyback of about $30 billion that it had promised shareholders should the NXP deal fall apart. In July, it paid NXP a $2 billion breakup fee.China’s official statement after the meeting between Xi and Trump did not mention Xi’s willingness to consider approving a $44 billion deal for Qualcomm to purchase NXP if the deal was put before him again.Qualcomm did not respond to requests for comment from CNN Business, and NXP declined to comment.The dissolved deal was one of the most visible repercussions of the escalating trade war between the United States and China, the world’s two largest economies.The trade dispute was instigated by Trump, who is displeased with the United States’ trade deficit with China. The dispute escalated, with both countries slapping hundreds of billions of dollars in tariffs on each other’s goods. Trump and Xi met for two hours over dinner during the G20 summit in Argentina. The meeting came days after Trump pledged to hike tariffs on $200 billion worth of Chinese goods, even as he expressed optimism about a forthcoming deal with Xi.

      After the meeting, Trump said they had reached an “incredible deal.”Trump said the United States would be “holding back on tariffs, and “China will be getting rid of tariffs.”

Qatar is pulling out of OPEC to focus on gas

OPEC is losing one of its oldest members.

The small, gas-rich state of Qatar said Monday that it will leave the oil cartel on January 1 after nearly 60 years. The country’s state oil company, Qatar Petroleum, made the announcement in a series of tweets. “The withdrawal decision reflects Qatar’s desire to focus its efforts on plans to develop and increase its natural gas production,” Saad Sherida Al-Kaabi, the country’s newly-appointed minister of state for energy affairs, was cited as saying in one of the tweets.

    Qatar has been under a diplomatic and economic embargo by its Arab neighbors, including OPEC members Saudi Arabia and the United Arab Emirates, for the past 18 months. In response, Qatar has been increasing gas production, the mainstay of its economy. OPEC has no role in the global market for natural gas. And Qatar made no reference to the dispute with other Gulf states in its announcement, emphasizing plans to cement its position as the world’s leading supplier of gas. Its exports currently account for about 30% of global demand. Read More”Achieving our ambitious growth strategy will undoubtedly require focused efforts, commitment and dedication to maintain and strengthen Qatar’s position as the leading natural gas producer,” Al-Kaabi said.Qatar’s newly appointed energy minister, Saad Sherida Al-Kaabi. He announced on Monday that Qatar will be withdrawing from OPEC in January.

    Marginal OPEC producer

    Qatar is a marginal player in OPEC when compared to some of the cartel’s biggest producers, such as Saudi Arabia and Iraq. It pumps about 600,000 barrels of oil a day out of more than 27 million from all OPEC members.But the surprise move comes at a critical time for OPEC. Its members and other major producers are due to meet in Vienna this week to discuss cutting production to boost oil prices. .m-infographic–1543839745973 { background: url(//cdn.cnn.com/cnn/.e/interactive/html5-video-media/2018/12/03/OPEC_production_375px.png) no-repeat 0 0 transparent; margin-bottom: 30px; padding-top: 150.79787234042556%; width: 100%; -moz-background-size: cover; -o-background-size: cover; -webkit-background-size: cover; background-size: cover; } @media (min-width: 640px) { .m-infographic–1543839745973{ background-image: url(//cdn.cnn.com/cnn/.e/interactive/html5-video-media/2018/12/03/OPEC_production_780px.png); padding-top: 58.20512820512821%; } } @media (min-width: 1120px) { .m-infographic–1543839745973{ background-image: url(//cdn.cnn.com/cnn/.e/interactive/html5-video-media/2018/12/03/OPEC_production_780px.png); padding-top: 58.20512820512821%; } } <!– Concerns about oversupply have sent oil prices plunging. US crude futures hit a four-year high above $76 a barrel in early October. They are now trading at around $53 a barrel.”The decision by Qatar to withdraw from OPEC does come as a surprise, but is unlikely to have a significant impact on the oil market,” Economist Intelligence Unit analyst Peter Kierna said.How low can oil prices go before Saudi Arabia starts hurting?

    A setback for OPEC

    Qatar is the first Middle Eastern country to pull out of OPEC, which was founded in 1960. Other countries have come and gone — Indonesia left in 2009 before rejoining for less than a year in 2016. Gabon rejoined in 2016 after an absence of more than 20 years. “It’s a disappointment for OPEC because they’ve been trying to attract members,” said Robin Mills, CEO of Qamar Energy, a consultancy firm based in Dubai. .m-infographic–1543840590902 { background: url(//cdn.cnn.com/cnn/.e/interactive/html5-video-media/2018/12/03/OPEC_3_map_375px.png) no-repeat 0 0 transparent; margin-bottom: 30px; padding-top: 92.5531914893617%; width: 100%; -moz-background-size: cover; -o-background-size: cover; -webkit-background-size: cover; background-size: cover; } @media (min-width: 640px) { .m-infographic–1543840590902{ background-image: url(//cdn.cnn.com/cnn/.e/interactive/html5-video-media/2018/12/03/OPEC_3_map_780px.png); padding-top: 58.20512820512821%; } } @media (min-width: 1120px) { .m-infographic–1543840590902{ background-image: url(//cdn.cnn.com/cnn/.e/interactive/html5-video-media/2018/12/03/OPEC_3_map_780px.png); padding-top: 58.20512820512821%; } } <!– OPEC has recently been expanding in Africa, with Congo and Equatorial Guinea signing up. “If you add those up, [the production] is equal to Qatar’s so it’s kind of lost the equivalent [output] of those new members,” Mills added.Oil fell below $50 a barrel for the first time in over a year

      The 15 OPEC members collectively supply about 44% of the world’s crude oil. The cartel aims to monitor the market and decide to raise or lower oil production in order to maintain stable prices and supply.Qatar has been a member of OPEC since 1961. It said the organization was aware of its decision to withdraw.

Stock markets will close on Wednesday to honor George H.W. Bush

US financial markets will be closed on Wednesday to honor the memory of former President George H.W. Bush, who passed away late Friday at the age of 94.

The White House said Saturday President Donald Trump would declare December 5th a national day of mourning for the country’s 41st president. “He and the First Lady will attend the funeral at the National Cathedral in Washington, D.C.,” the statement said. The New York Stock Exchange said it will suspend normal trading on Wednesday. “The exchange will observe a minute of silence to honor President Bush on Monday. As per our tradition, we will close the markets in observation of the Day of Mourning,” spokesperson Kristen Klaus said.

    The Nasdaq will also close for the day.The stock exchange will observe a moment of silence on Monday “and plans to be closed on December 5, the national day of mourning designated by President Trump,” Nasdaq spokesman Will Briganti said. Read More

      The NYSE has traditionally closed for all or part of its session for the funeral of a US president, including in 2004 following the death of Ronald Reagan and in 1994, when it closed for the full day for Richard Nixon’s funeral.Bush’s death was announced by his son, former President George W. Bush, who praised his father as “a man of the highest character.”

These companies are leading the fight against climate change

The world has only until 2030 to stem catastrophic climate change. Can global companies be part of the solution?

A report published Monday by the UN Intergovernmental Panel on Climate Change said that “rapid, far-reaching and unprecedented changes in all aspects of society” are needed to avoid disastrous levels of global warming.While often seen as culprits, some businesses are setting a positive example.

    The companies with the best track records tend to be consumer brands, according to reports from corporate transparency advocate CDP, public opinion consultancy GlobeScan and think tank SustainAbility.

    Unilever

    Read MoreUnilever (UL) is the global corporate leader in environmental sustainability, according to a survey of experts conducted by GlobeScan and SustainAbility.The owner of brands including Ben & Jerry’s and Dove will ensure that all of its agricultural materials come from sustainable sources by 2020. It says it will do so by working with farmers to reduce environmental harm.It has also agreed to eliminate single use plastic packaging in the United Kingdom, where possible, by 2025.The consumer goods giant wants to become carbon positive by 2030. That means it will eliminate the use of fossil fuels, and support the generation of more renewable energy than it consumes.

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      U.N. calls for urgent action on climate 03:17″They created a very strategic plan that still is in many ways the best in class. They created these ambitious, clear plans that focus on what they really need to do — on packaging, chemical production, food production,” said Chris Coulter, co-CEO of GlobeScan.Unilever has found itself under pressure over plastic. Earlier this year, the company was named by the Break Free From Plastic campaign as one of the firms most responsible for plastic pollution in India, the Philippines and Indonesia. Unilever has acknowledged it must “go much further, much faster, in addressing the challenge” of plastic waste.

      Patagonia

      The outdoor apparel company is big on the environment. Founded by surfers and rock climbers in California, Patagonia makes clothes using organic cotton and recycled fabrics, including polyester, nylon and wool. The company has made headlines with its “Don’t buy this jacket” campaign, which was meant to discourage customers from purchasing too many Patagonia products. Patagonia pledges 1% of sales to the preservation and restoration of the natural environment.It’s also a certified “B Corporation,” meaning it’s legally required to consider the impact of decisions on its workers, customers, suppliers, community and the environment.

      Nestle

      The mega food producer has stepped up efforts to police its supply chain after criticism of its use of palm oil, which is often produced on land previously covered by forests. Nestle (NSRGF) has committed to using 100% responsibly sourced palm oil by 2020, and to blacklist companies that do not comply with its policies. It will use satellite technology to ensure no deforestation is taking place in its supply chain. “At the scale they are, the largest food company on the planet, they have been able to manage some of those issues and be part of the solution,” said Coulter.An electric vehicle charging stations at Ikea.

      Ikea

      The Swedish retailer has invested €1.7 billion ($2 billion) into renewable energy projects. It plans to build 416 wind turbines and has already installed around 750,000 solar panels on Ikea buildings.Ikea has also said it will ban single-use plastic products from its shops and restaurants by 2020.The company wants to purchase 100% renewable energy by 2020, and use only renewable and recycled materials in its products by the same year. It plans to make its home deliveries emissions free by 2025.Solar panels at the Tesla car factory.

      Tesla

      Tesla (TSLA) says its mission is to “accelerate the world’s transition to sustainable energy.” The electric-car maker has a code of conduct for suppliers, which includes a pledge to work to avoid harm to the environment, responsible management of all waste and efficient use of water and energy resources.Tesla CEO Elon Musk said Tuesday on Twitter that the UN climate report’s findings are a reminder of “why it’s important to accelerate advent of cars powered by electricity made from solar power.”

      A reminder of why it’s important to accelerate advent of cars powered by electricity made from solar power https://t.co/sbjSZOeF4c

      — Elon Musk (@elonmusk) October 9, 2018

        Unlike other companies praised for helping the planet, Tesla doesn’t disclose many details of its environmental practices.”No one really knows about Tesla and its strategy, because it is so opaque,” said Coulter. “But it’s a company with a purpose to disrupt the fossil fuel industry — it gets the points.”

Patagonia got $10 million in GOP tax cuts. The company’s donating it for climate change awareness

Patagonia, the outdoor company that specializes in premium outerwear and environmental awareness, is making a big statement about climate change. A $10 million statement, to be exact.

Patagonia CEO Rose Marcario posted a letter on LinkedIn Wednesday announcing the company will be donating $10 million it saved in recent tax cuts to environmental programs, and named President Trump’s recent denial of a dire climate change report as a main reason for the move. Marcario explained the company saved the money as a results of “last year’s irresponsible tax cut” — referring to tax cuts enacted by the Trump administration.

    “Our home planet is facing its greatest crisis because of human-caused climate disruption,” she wrote. “…Far too many have suffered the consequences of global warming in recent months, and the political response has so far been woefully inadequate—and the denial is just evil.”She says the money will go toward “groups committed to protecting air, land and water and finding solutions to the climate crisis.”Read MoreOn Monday, President Trump shrugged off a wide-ranging nonpartisan climate change assessment produced by his own administration, saying, “I don’t believe it.” The report warns that, if left to continue unabated, climate change will cause “substantial damages to the US economy, environment, and human health and well-being over the coming decades.”

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      Former CEO of Patagonia creates national park 03:08Patagonia is no stranger to wading into the increasingly large intersection of partisan politics and scientific activism. Before November’s midterm elections, the company officially endorsed two Democratic candidates, the first political endorsements in the company’s history. Jacky Rosen, who ran for Senate in Nevada, and Senator Jon Tester who ran for re-election in Montana, both won their races.

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        Trump scales back Utah national monuments 04:20

          The company also threatened legal action against President Trump and his administration in 2017, when Trump decided to shrink the size of Utah’s Grand Staircase-Escalante National Monument and Bears Ears National Monument.The company changed its website and sent out messages on its social media channels to display a back background with the statement, “The President stole your land.” That lawsuit is ongoing.

More police raids at Deutsche Bank spell trouble for its new CEO

Christian Sewing has been chief executive of Deutsche Bank for less than eight months, but he’s already facing a major test of his ability to turn a page on the bank’s troubled past.

German authorities searched the bank’s offices in Frankfurt for a second consecutive day on Friday as part of an investigation into potential money laundering. The scale of the legal threat posed by the investigation remains unclear. But a lengthy — and costly — probe could make it harder for Sewing to overhaul the struggling lender and further delay the return to healthy profits.

    Prosecutors in Frankfurt are looking into whether Deutsche Bank (DB) helped customers set up offshore companies in tax havens, while failing to report suspicious transactions. Both the bank and prosecutors said the probe is related to the Panama Papers, a 2016 leak of confidential documents that exposed international money laundering networks and shell companies.Read MoreThe investigation covers events that happened as recently as this year, according to prosecutors. On Friday, a source with knowledge of the situation said that authorities had searched Sewing’s office. Deutsche Bank headquarters raided in Panama Papers probeShares in Deutsche Bank have plummeted nearly 6% since the raids commenced, at one point dropping below €8 ($9.10) to reach a new all-time low.Deutsche Bank said in a statement that it would cooperate with investigators. “As far as we are concerned, we have already provided the authorities with all the relevant information regarding [the] Panama Papers,” it said.Germany’s biggest bank employs roughly 95,000 workers and has assets worth €1.4 trillion ($1.6 trillion). It’s one of 29 lenders designated by the Bank for International Settlements as playing a significant role in the global financial system.Yet it has struggled to turn a profit in recent years amid questions about its business strategy, and the heavy financial burden of past misconduct. Deutsche Bank has spent over $19 billion on legal costs since 2008, including $7.2 billion on a settlement with the US government in January 2017 over claims that it packaged and sold toxic mortgages. Sewing, a retail banking veteran who took over as CEO in April, has used his first months in the job to accelerate an overhaul of the bank, which has closed hundreds of branches, cut thousands of jobs and slashed costs.He struck a positive tone when the bank published its third quarter financial report in October, writing in a letter to employees that “what we’ve achieved so far this year makes me optimistic.”Europe's big banks are back in business and beating forecasts”The prospects are good,” he added. “The past few months have proven how much corporates, institutional investors and private clients are willing to work with us and how good and stable our client relationships are.”New potential legal issues, however, threaten to ensnare Sewing in the same pattern of negative headlines and higher legal costs that hobbled his predecessors.

      Sewing has claimed meaningful progress on cost reductions. But the bank’s stock price has continued to decline, with losses reaching nearly 50% so far this year.The CEO said in October that Deutsche Bank was on track to produce its first annual profit since 2014. That’s one thing that could help restore the faith of investors.

Fed reportedly probing Goldman’s role in Malaysian scandal

Goldman Sachs could be in big trouble for its involvement in a Malaysian investment fund scandal, and investors are getting antsy.

The Federal Reserve is stepping up its probe of Goldman Sachs’ compliance systems, according to Bloomberg. Two former Goldman Sachs executives allegedly bribed foreign officials and helped launder money through the Malaysian sovereign wealth fund 1Malaysia Development Berhad, the US Justice Department alleged in indictments a month ago. One of them has pleaded guilty.

    In recent weeks, representatives from Goldman Sachs met with the Fed and defended the bank’s internal controls, according to Bloomberg’s report Friday. Goldman would not comment on the report and a spokesperson for the Fed would not confirm the investigation.”It is the Federal Reserve’s policy not to confirm or deny the existence of investigations. We refer criminal violations to the Department of Justice as necessary,” the Fed spokesperson said. The Justice Department declined to comment. Read MoreBut Goldman (GS) shares closed down 2% on the day, and have lost 16% of their value since its involvement in the scandal was first reported by the Wall Street Journal on November 1. Bank of America downgraded Goldman Sachs’ stock from a buy to neutral rating Friday.If Goldman was involved — or even if employees were able to short-circuit compliance systems -— the company could be subject to large fines. It could also lose business with other sovereign funds concerned about the taint of the scandal.

      Goldman underwrote more than $6 billion in bonds issued by 1MDB in 2012 and 2013, making about $600 million in fees and revenue for that work, according court filings.The Fed does not have power to bring criminal cases itself but it can take civil action against financial firms and individuals, including barring individuals from working in banking.