France finally gets a new PM
1Digest
The podcast begins with the appointment of Michel Barnier as the new Prime Minister of France, a move prompted by the stalemate following Macron's centrist coalition losing seats in the recent elections. The podcast then shifts to Ukraine, discussing the major cabinet reshuffle, the largest since the Russian invasion. This reshuffle comes at a critical time in the war, with Ukraine facing challenges in holding its recent gains in Russian territory. The podcast further explores the impact of the war in Ukraine on ESG investing. Despite the counterintuitive nature, sustainable funds in Europe are increasingly investing in defense company stocks. This trend is driven by factors like increased defense spending globally, the perception of defense contractors as providers of social good, and a broader shift towards national and economic security. The podcast acknowledges the potential risks associated with ESG investments in defense stocks, including reputational risks and the ethical implications of investing in companies involved in warfare. However, it argues that investors are increasingly considering the specific context and purpose of defense investments.
Outlines
French Politics and Ukraine's War
The podcast discusses the appointment of Michel Barnier as France's new Prime Minister, aiming to resolve the political stalemate following Macron's election loss. It then shifts to Ukraine, analyzing the major cabinet reshuffle and the challenges facing the country in holding its recent gains in Russian territory.
ESG Investing and Defense Stocks
The podcast explores the surprising trend of ESG funds investing in defense company stocks, driven by factors like increased defense spending, the perception of defense contractors as providers of social good, and a broader shift towards national and economic security. It also discusses the potential risks and ethical implications of this trend.
Keywords
ESG Investing
ESG investing considers environmental, social, and governance factors in investment decisions. It aims to promote sustainable and responsible investing practices.
Defense Stocks
Stocks of companies involved in the production of military equipment, weapons, and related services. These companies play a crucial role in national security and defense.
Sustainable Funds
Investment funds that prioritize environmental, social, and governance factors in their investment decisions. They aim to generate returns while contributing to a more sustainable future.
National Security
The protection of a nation's interests from external threats, including military aggression, terrorism, and cyberattacks. It involves various measures, including defense spending, intelligence gathering, and diplomacy.
Reputational Risk
The potential for damage to a company's reputation due to negative events or actions. It can impact investor confidence, customer loyalty, and overall business performance.
Ukraine War
The ongoing conflict between Russia and Ukraine, which began in 2014 and escalated in 2022 with a full-scale Russian invasion.
French Politics
The political landscape and dynamics within France, including the recent elections and the appointment of a new Prime Minister.
Q&A
What led to the appointment of Michel Barnier as the new Prime Minister of France?
Macron's centrist coalition lost seats in the recent elections, resulting in a stalemate. Barnier's appointment aims to resolve this situation and allow for budget negotiations to begin.
What are the key challenges facing the newly reshuffled Ukrainian cabinet?
The cabinet faces challenges in holding the territory gained in Russia, dealing with the ongoing Russian offensive in eastern Donetsk, and navigating the potential impact of the US elections on Ukraine's support.
Why are ESG funds increasingly investing in defense stocks?
The surge in defense spending globally, the perception of defense contractors as providers of social good, and a broader shift towards national and economic security have made defense stocks more attractive to ESG investors.
What are the potential risks associated with ESG investments in defense stocks?
Critics argue that defense stocks are an oxymoron for ESG investments, as they can pose reputational and other risks. However, investors are increasingly considering the specific context and purpose of defense investments.
How has the meaning of ESG investing changed in recent times?
ESG investing has evolved from focusing on mitigating risks related to climate and diversity to promoting growth in sectors deemed socially important, such as green goods and defense.
Show Notes
President Emmanuel Macron has named the EU’s former Brexit negotiator Michel Barnier as France’s next prime minister. Plus, Europe’s sustainable investment funds double down on defence stocks, and Ukraine President Volodymyr Zelenskyy carries out his biggest wartime cabinet reshuffle yet.
Mentioned in this podcast:
Europe’s ESG funds more than double defence holdings amid Ukraine war
Michel Barnier promises respect for ‘all political forces’ as French PM
Zelenskyy seeks ‘new energy’ with Ukraine’s biggest wartime cabinet reshuffle
The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Saffeya Ahmed, Michela Tindera, Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Monica Lopez. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
Read a transcript of this episode on FT.com
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