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Oil & Gas 360 Publishers Note: Nice article written by Hazel Bradford covering ESG investing and the U.S. and EU/U.K. differences and similarities. What is not covered is some specifics about the energy sector. Large power, oil, and renewable companies are right in the middle of the ESG investor, and availability of operating capital. BP as one example is morphing into a balanced energy company with increasing the renewable projects, while decreasing operations in traditional fossil fuels. We have articles and coverage of these stories on our production schedules.

Regulatory approaches to ESG investing by retirement funds are increasingly diverging between the U.S. and the European Union and U.K. and could affect fund returns at some point,Fitch Ratings said in a briefFriday.

While these differing approaches are not expected to immediately affect ratings assigned to investment managers, pension funds and/or the institutions sponsoring such plans, we anticipate they will translate into differing investment considerations, risks and potential returns over the longer term, Fitch said.

The brief also predicted that the diverging regulatory paths are unlikely to converge in the near term given the U.S. Department of Labors historical conservative stance amid the evolution of ESG investing in the EU/U.K.

In June, the Labor Department proposed a rule for retirement plans governed by the Employee Retirement Income Security Act to prohibit using those assets for furthering ESG objectives. A second proposal in August would require plans to cast shareholder votes only on issues with a direct economic effect on a retirement plan.

In contrast to the DOLs approach, regulation in the EU and U.K. promotes the integration of sustainability and ESG concepts into financial decision-making, which has become a more common and/or formalized consideration for pension fund managers. The European Commissions proposed amendment to Markets in Financial Instruments Directive II rules would mandate that investment firms consider the ESG preferences of their retail clients when providing investment advice, Fitch said.

The ESG investing trend is expected to persist, said Fitch, noting that the first half of 2020 saw global inflows of $59 billion, with total ESG assets under management reaching $2.2 trillion globally, according to Lipper.

The shift in social and political attitudes that has fueled demand for sustainable investing is accelerating as investors, public institutions and corporations increasingly prioritize ESG measures as part of their investment criteria, while market participants increasingly believe that ESG factors can have material impact on long-term investment returns, Fitch said.

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US regulators split with EU/UK over ESG investing The energy sector is at the forefront of ESG - EnerCom Inc.

Prime Minister Boris Johnson attends a virtual press conference at Downing Street on September 9, 2020 in London.

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It looks increasingly unlikely that the U.K. will reach a trade agreement with the European Union and that could also harm the chances of a future deal with the United States.

The U.K. government outlined on Wednesday how it plans to manage trade following its full breakup from the EU at the end of the year with two significantannouncements.

Firstly, it proposed legislation, called theInternal Market Bill, which gives the U.K. government stronger powers over trade rules in Scotland, Wales and Northern Ireland - something lawmakers in these countries have issue with.

Secondly, the government said the U.K. would not follow EU rules for state aid a key stumbling block in the negotiations with Europe to date. Instead, it will apply state aid rules agreed at the World Trade Organization level, which are less strict.

"It's a recipe for disaster," Paolo Palmigiano, partner at the law firm Taylor Wessing, told CNBC.

The proposed legislation has to be approved by the U.K. Parliament before becoming law.

However, itraises questions about the U.K.'s ability to apply a WTO framework which is meant to solve trade issues between two different nations to its unique four-nation formation. In addition, the publication of the Internal Market Billputs ongoing trade talks with the European Union at risk.

Ursula von der Leyen, European Commission president, said on Wednesday that she was "very concerned about the announcement from the British government."

To leave the European Union, the U.K. government put into law the Withdrawal Agreement in January. Its implementation is a precondition for the EU to sign any trade deal with the U.K. government.

In the Withdrawal Agreement, the U.K. agreed that state aid given by the U.K. government above a certain threshold that would impact trade between Northern Ireland and the rest of the EU would have to be approved by the European Commission.

Under the latest government bill, the U.K. government is overriding that part of the Withdrawal Agreement by giving its ministers the power to "disapply" that specific law concerning state aid.

"The Bill is in breach of this obligation," Palmigiano said.

As a result, law experts, politicians and even a member of the U.K. government have said that the Internal Market Bill, if approved by U.K. lawmakers, would break international law.

This is where the United States would have an issue too.

Nancy Pelosi, the speaker of the House and a vocal Democrat lawmaker, said Wednesday that if the U.K. violates its international agreements, "there will be absolutely no chance of a U.S.-U.K. trade agreement passing the Congress."

The U.K. government could put its international credibility at risk if it indeed overrides parts of its already-legislated exit agreement with the EU.

European and U.K. officials are having emergency talks Thursday, however, some analysts have updated their forecasts in the last 48 hours and are now expecting a total rupture in trade negotiations between the EU and the U.K.

"We now think no deal is the most likely outcome at the end of the year, a 60% probability," analysts at consulting firm Eurasia Group said Wednesday.

Former European Commission President Jean-Claude Juncker said Tuesday that no deal was the most likely outcome too.

Others believe the legal changes are "negotiating tactics" from the U.K. government to get concessions in the trade negotiations with the EU.

Both sides have said they have only until mid-October to agree on new trade rules.

The U.K. is currently in a transition phase after it stopped being a member of the EU in January, but this will expire on Dec. 31.

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UK's post-Brexit plan puts trade deal with the EU and the U.S. at risk - CNBC

Facebook is facing the prospect of not being able to move data about its European users to the United States, after European regulators raised concerns that such transfers do not adequately protect the information from American government surveillance.

The social network said on Wednesday that the Irish Data Protection Commission had begun an inquiry into its movement of data on European users to the United States. The Irish regulator oversees Facebooks data practices in Europe and can fine it up to 4 percent of its global revenue for breaking European data protection laws.

The Silicon Valley company may now have to overhaul its operations to keep data on Europeans stored within the European Union, an immensely complicated task given the way that Facebook moves data among data centers around the world.

The inquiry, earlier reported by The Wall Street Journal, is the first major fallout of a European Union high court decision in July that invalidated a key trans-Atlantic agreement called Privacy Shield. That agreement between the United States and European Union had allowed businesses to send data between the two regions, but the court struck it down, saying Europeans did not have sufficient protections from American spy agencies.

The ruling affects thousands of businesses, but Facebooks data-sharing practices have been under particular scrutiny by European authorities. Facebook had argued that the court allowed certain kinds of legal contracts to continue transferring data, but Irish regulators disagreed and said those arrangements were invalid.

Facebook has until later this month to respond to Irelands complaint, then the Irish regulator will make a final decision toward the end of the year. Facebook could challenge that judgment in court.

A lack of safe, secure and legal international data transfers would damage the economy and hamper the growth of data-driven businesses in the E.U., just as we seek a recovery from Covid-19, Nick Clegg, Facebooks vice president of global affairs, said of the moves. The impact would be felt by businesses large and small, across multiple sectors.

Irelands Data Protection Commission declined to comment.

Facebooks experience will be closely watched by other major tech companies, like Google, that also depend on transferring data between the United States and Europe.

American and European officials have expressed a desire to work out a new data-sharing agreement. But legal experts have said complying with the European court ruling will require substantive changes to American surveillance laws to give Europeans added privacy protections.

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Facebook May Be Ordered to Change Data Practices in Europe - The New York Times

President of the European Commission Jean-Claude Juncker delivers a speech during a session of the European Parliament on Brexit on January 30, 2019 in Brussels, Belgium.

Thierry Monasse | Getty Images

U.K. and EU negotiators are unlikely to reach a trade agreement in the coming months, Jean-Claude Juncker, the former president of the European Commission, said at an event Tuesday.

The two negotiating teams started their eighth round of discussions over new trade arrangements on Tuesday a necessary step after the U.K. left the European Union in January and agreed to work toward a trade deal with the bloc, to be implemented in January 2021.

However, the trade talks have not made any significant progress so far and there are growing doubts that this will change in the coming weeks.

"The situation is not developing in the best direction possible," Jean-Claude Juncker, who led the executive arm of the EU between 2014 and 2019, said at an event hosted by financial services company Principal.

"No deal is the most possible and probable, the only outcome of the negotiations," Juncker, who often played a key role in prior Brexit negotiations, said.

Tensions between both sides of the English Channel have risen in recent days, with reports that the U.K. government is preparing to override parts of the Withdrawal Agreement the deal that allowed for its orderly departure and for a transition period throughout 2020.

Flouting parts of that agreement would diminish trust in trade talks; the EU has said that the implementation of the Withdrawal Agreement is a precondition to any trade deal.

"I trust the British government to implement the Withdrawal Agreement, an obligation under international law and prerequisite for any future partnership," Ursula von der Leyen, president of the European Commission, said Monday.

In addition, U.K. and EU negotiators have been unable to agree on state aid and new rules on fisheries since trade talks began earlier this year.

Speaking Sunday evening, U.K. Prime Minister Boris Johnson said that if they could not overcome these differences by October 15, "then I do not see that there will be a free trade agreement between us.

This would mean that as of January 1, EU-U.K. trade would follow the World Trade Organization rules. In practical terms, this could increase costs for companies on both sides.

According to Juncker, the U.K. government doesn't "understand that there is no way to be part of the internal market without agreeing to common rules."

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No-deal Brexit is the most likely outcome of trade talks, former EU chief says - CNBC

PARIS (AP) Leaders of seven southern European countries on Thursday urged Turkey to end unilateral and illegal activities in the eastern Mediterranean and resume dialogue to ease tensions in the region.

Heads of states and government of France, Greece, Cyprus, Malta, Italy, Spain and Portugal gathered in Corsica amid fears of open conflict as Turkey seeks to expand its energy resources and influence in the region.

In their final statement, leaders reaffirmed their full support and solidarity with Cyprus and Greece who they say are facing Turkeys confrontational actions.

We regret that Turkey has not responded to the repeated calls by the European Union to end its unilateral and illegal activities, they said.

Leaders warned that in absence of progress in engaging Turkey into a dialogue and unless it ends its unilateral activities, the EU is ready to develop a list of further restrictive measures at a summit later this month.

They also called on resuming German mediation in the dispute. Russia also offered this week to mediate.

Greece and Turkey have deployed naval and air force units to assert competing claims over energy exploration rights in the eastern Mediterranean. Turkish survey vessels and drill ships continue to prospect for gas in waters where Greece and Cyprus claim exclusive economic rights.

France is carrying out military patrols in the region in a show of support for Greece and Cyprus, and the EU is mulling new sanctions against Turkey.

Greek Prime Minister Kyriakos Mitsotakis said if Turkey really wants a frank dialogue with Greece and Cyprus with the European Union, it must demonstrate this in practice: to immediately stop unilateral actions, to make convincing indications that it respect international law.

Turkey needs to restrain its aggressive rhetoric and return to the table for exploratory talks with Greece, he added.

Turkish leaders have lashed out at France and the EU for siding with Greece and Cyprus in the dispute.

Earlier Thursday, Macron denounced what he called unacceptable provocations from Turkey.

Turkey is no longer a partner in this region, Macron told reporters ahead of the summit. We Europeans need to be clear and firm with the government of Turkish President Recep Tayyip Erdogan about its inadmissible behavior, he said.

Turkeys Foreign Ministry characterized Macrons statement as arrogant and in line with old colonial reflexes. It accused the French president of stoking tensions and putting the greater interests of Europe at risk.

It is not for Macron to determine the maritime jurisdiction of any country in the Mediterranean or anywhere else, the Turkish ministry said in a statement.

Speaking Thursday to EU lawmakers, Greek European Affairs Minister Miltiadis Varvitsiotis appealed for support from European partners, saying the tensions over energy rights constitute by themselves a grave threat to our common security architecture.

He said that Turkey is looking beyond Greece and is a major destabilizing factor in the wider area, citing Turkish government actions in Libya, Syria and beyond.

He said that Greece would not provoke conflict but wouldnt just sit back waiting for European help to arrive: At the end of the day, we will defend ourselves, even alone.

Separately from the diplomatic discussions, Turkish and Greek military officials met Thursday at NATO headquarters, as part of ongoing meetings aimed at reducing the risk of armed conflict. Greece and Turkey both are NATO members.

The leaders also planned to discuss EU and NATO operations in the Mediterranean and their relation to Turkey during a dinner on Thursday evening.

The seven countries are aiming at coming up with a united southern European front before a full EU summit later this month focused on the blocs strategy toward Turkey.

In a testy exchange with EU lawmakers, Turkish Foreign Minister Mevlut Cavusoglu urged the Europeans to play the role of an honest broker in the maritime border and energy dispute rather than take sides with member countries Greece and Cyprus.

By acting as an international court, defending one sides claims over the issue, the EU has become a part of the problem unfortunately, Cavusoglu said by video link.

We are ready for dialogue without any preconditions. If Greece insists on preconditions, we will also insist on our preconditions, Cavusoglu said, but added that we are not for tension. We are not for escalation.

European Council President Charles Michel will travel to Greece, Cyprus and Malta next week for talks with leaders.

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Angela Charlton in Paris, Lorne Cook and Raf Casert in Brussels, Suzan Fraser in Ankara, Turkey, and Elena Becatoros and Derek Gatopoulos in Athens contributed to this story.

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Southern EU leaders urge Turkey to end "unilateral" actions - The Associated Press