AFP

A federal judge has allowed a discrimination lawsuit to proceed that argues that McDonald’s refuses to advertise on Black-owned media networks.

Media entrepreneur Byron Allen, who is Black, has accused McDonald’s of instituting a “racially discriminatory contracting process” in a lawsuit first filed in May 2021.

As the owner of Entertainment Studios Networks and the Weather Group, which includes the Weather Channel, he sought $10 billion in damages alleging that McDonald’s established “a two-tiered, race based system and shut plaintiff out of the general market (i.e. white-owned media) tier.”

However, a federal judge dismissed the suit in December, saying that the allegations were not sufficiently supported.

Following a legal back-and-forth, the same judge on Friday denied a request by McDonald’s to dismiss the case, thereby allowing it to proceed.

Allen alleged that were his company white-owned it “would have received tens of millions of dollars in advertising revenue from McDonald’s on an annual basis.”

He also alleged that McDonald’s contracts with a separate advertising agency for “African-American media” with an aim of spending a budget that “is de minimis compared to the general market budget.”

Allen argues his company had programming geared towards a variety of viewers, especially after its 2018 purchase of the Weather Channel, and that McDonald’s has advertised on “similarly situated, white-owned networks.”

Loretta Lynch, the former US attorney general who is now a partner at law firm Paul, Weiss representing McDonald’s, said Allen’s complaint was “about revenue, not race.”

The “plaintiffs’ groundless allegations ignore both McDonald’s legitimate business reasons for not investing more on their channels and the company’s long-standing business relationships with many other diverse-owned partners,” she said.

A commercial plane photoshopped with the tail of a shark, hashtags that misleadingly evoke sustainability, tokenistic use of minorities to distract and to signal virtue: a Harvard report published Tuesday highlights rampant greenwashing by leading companies on social media.

The investigation, commissioned by Greenpeace Netherlands, involved analyzing the text and images of 2,300 posts by 22 of Europe’s largest carmakers, fossil fuel producers and airlines this June and July.

“During this summer of record temperatures and wildfires in Europe, these fossil fuel interests have remained explicitly silent on the topic of climate change, and instead, they engage in what we interpret to be strategic brand positioning,” lead author Geoffrey Supran told AFP.

Entitled “Three Shades of Green(washing),” the report released during New York’s Climate Week found that only one in five “green” car ads actually present a product for sale, while the rest simply promote the brand as green.

One in five posts by oil, car and airline companies center on sports, fashion or social causes that direct attention away from their core businesses.

Two-thirds of companies’ social media posts painted a “green innovation” sheen on their operations, the report found, with automakers generating by far the most compared with airlines and oil and gas firms.

While there was already some awareness around these trends, Supran said the strength of the new study was its use of peer-reviewed social science methods to lend more quantitative weight.

A key feature of the companies’ posts was how often they were about their sponsorship of sports events or charity, as opposed to talking about what they sell.

“In principle those kinds of activities should be applauded. The issue becomes when corporate philanthropy slips into corporate social responsibility washing, things like greenwashing, sportswashing, and wokewashing,” Supran said.

Examples of greenwashing include an Instagram post by Lufthansa where a plane blends into the body of a shark swimming in the ocean. 

The post was to highlight a coating modeled off shark skin that is applied to the plane’s body to improve airflow and reduce fuel consumption.

Tweets by Air France-KLM and Lufthansa promoted their use of biofuel on some routes using the hashtag “SustainableAviationFuel.”

Those posts omit the fact that such fuels constitute only a tiny fraction of overall fuel used by the industry, and not all experts are yet convinced it can power climate-safe air travel, the report said.

– ‘Pretty insidious’ –

Green posts also tend to feature more women, non-binary people and non-Caucasian people — for example, a tweet by Wizz Air on World Environment Day shows an elderly Black woman, who appears to be part tree, part person, standing in a lush green forest.

Not only does the post appear tokenistic, the report said, it also promotes an article about how to reduce personal energy consumption. 

This is a widespread corporate practice researchers call “redirecting responsibility” in which individual behavior, rather than the actions of governments and companies, is placed at the center of climate action.

A YouTube video by Fiat meanwhile features a group of attractive youths sailing and driving through beautiful mountains in the Italian countryside.

“Behavioral psychologists have observed significant affective responses from consumers exposed to nature imagery,” explained Supran. 

“It can make a company seem greener actually in a unique way that does the subtle work of overriding even the most critical observers in a pretty insidious way.”

Silvia Pastorelli, a Greenpeace campaigner, said in a statement that the report highlighted techniques that had been “hiding in plain sight.”

“This is a systematic greenwashing effort that must be addressed with a legal ban on all fossil fuel advertising and sponsorship across Europe, just as happened with tobacco,” she added.

The European Central Bank is determined to stop soaring inflation becoming the norm, its president said Tuesday, as the coronavirus pandemic and the Russian invasion of Ukraine put lasting pressure on prices.

The twin shocks have led to consumer price rises that are “much higher and more persistent” than expected, Christine Lagarde said in a speech in Frankfurt, adding that the central bank had to ensure sky-high inflation does not become “embedded”.

“This is what the ECB is doing,” Lagarde said.

Inflation in the eurozone climbed to 9.1 percent in August, an all time high, with analysts predicting the rate could reach double digits by the end of the year.

At its last meeting earlier this month the ECB raised its interest rates by a record large 75 basis points, as it sought to tame the surge in consumer prices.

The shock decision came just a few weeks after the bank had hiked rates for the first time in over a decade, bringing an end to a period of negative interest rates.

The aggressive moves had been a “key tool to signal our determination” to bring inflation back to the ECB’s two-percent target, Lagarde said.

Looking ahead, the ECB expected to “raise interest rates further over the next several meetings”, she said. 

How fast and how far rates would rise would depend on the “inflation outlook”, she added.

Soaring inflation rates were driven by the economic shocks of the coronavirus pandemic and the Russian invasion of Ukraine, which has sent the price of energy soaring, Lagarde said.

The cuts to Russian gas imports would “have ramifications for several years”, keeping energy prices elevated, while pandemic bottlenecks would lead supply chains to be restructured at higher cost, she said.

The constraints on supply in both cases were “likely to last longer than in the past”, Lagarde said, meaning it was “taking longer for the inflationary effects of those shocks to fade out.”

US central bankers opened their two-day policy meeting on Tuesday with another steep interest rate hike seen as a near certainty amid stubbornly high inflation.

American families have felt the squeeze of soaring prices, which have risen at the fastest pace since the early 1980s, and Federal Reserve Chair Jerome Powell has made it clear officials will continue to act aggressively to cool the economy.

Many economists are expecting a third straight three-quarter point rate hike when the meeting concludes Wednesday, an unprecedented action in recent decades.

Fed officials have been united in the message that the US central bank cannot risk letting inflation take hold due to the damaging impact on workers and businesses, but analysts warn that the risks of recession are rising.

“The inflation rate will continue to call the tune for the path of monetary policy, despite rising risks of a recession in 2023,” said Kathy Bostjancic of Oxford Economics, who projects a downturn early next year. 

“We see higher-for-longer inflation, more aggressive Fed monetary policy tightening, and negative spillover effects from a weakening global backdrop combining to push the US economy into a mild recession in H1 2023.”

The Fed’s policy-setting Federal Open Market Committee (FOMC) is scheduled to announce its decision at 1600 GMT Wednesday.

Markets have been roiled in recent days by the decidedly hawkish statements from central bankers, and closed lower again Tuesday after a brief bounce Monday.

Investors and analysts will pay close attention to Powell’s press conference after the meeting for information on what he thinks the next steps will be and how high rates could go.

– More hikes coming? –

Despite the welcome drop in gasoline prices at the pump in recent weeks, the disappointing consumer price report for August, released last week, showed housing, food and medical costs continued to rise. And when volatile food and energy prices are stripped out, so-called core inflation accelerated.

It is not just current high inflation that concerns policymakers, but the fear that consumers and businesses begin to expect rising prices will become a permanent feature, which could set off a dangerous spiral and a phenomenon called stagflation.

That fear has driven the Fed to front-load its rate hikes, rather than pursuing the more customary course of small, gradual steps over a longer period. 

The US central bank has cranked up the benchmark lending rate four times this year, including two straight three-quarter-point hikes in June and July.

The aim is to raise the cost of borrowing and cool demand — and it is having an impact: Home mortgage rates have now topped six percent for the first time since 2008.

And recent statements from Fed officials indicate more rate hikes are coming, and no cuts until inflation is under control — dousing hopes that had built up in markets following the July policy meeting.

The FOMC also will release the quarterly forecasts from members, which will show how they feel about the direction of the economy and the impact of the policy moves, and how soon inflation will come down.