Good summer Friday morning.
There’s new evidence out this week that investing in “good” companies—companies that treat workers well and strive to meet other social and environmental goals—leads to better returns. JUST Capital, the organization founded by billionaire hedge fund manager Paul Tudor Jones, tracked the 894 companies covered by its first ranking in 2016, and found that if you invested in the top 20% of those companies, you would have made an excess return—or alpha—of 3.5% last year. If you invested in the bottom 20, you would have had negative alpha of 7.1%.
That’s just year one, but pretty impressive. You can argue over the chicken and the egg: whether socially responsible practices lead to better corporate performance, or whether well-performing companies are better able to follow socially responsible practices. But JUST Capital CEO Martin Whittaker told me yesterday he thinks that’s irrelevant. “If a just lens helps identify companies that do better financially AND pay workers more, reduce environmental impacts, strengthen communities, grow jobs, provide a better workplace and make great products—does it even matter?”
By the way, number one on the JUST Capital list in both 2016 and 2017 was Intel. FORTUNE’s Susie Gharib yesterday posted a clip from her recent interview with Intel CEO Brian Krzanich, who talked about the company’s move away from personal computers and toward products that process big data. “Oil changed the world in the 1990s,” Krzanich said. “It drove cars, it drove the whole chemical industry. Data, I look at it as the new oil. It’s going to change most industries across the board.”
Krzanich will be joining FORTUNE June 25-26 in San Francisco, where we will hold our second annual meeting of the CEO Initiative—a community of corporate leaders committed to addressing social problems as part of their business strategies. Still room for a few good CEOs, if you know one.
Ant Financial Funding
China’s Ant Financial just became the most valuable privately-held tech firm in the world, raising $14 billion in Series C funding at a $150 billion valuation (Uber is worth less than half as much.) The Alipay-administering Alibaba spinout—which is now also worth more than American Express, Goldman Sachs or Morgan Stanley—will use the cash for international expansion. So, look out, everyone. Fortune
President Donald Trump’s administration is trying a new tactic in its efforts to dismantle the Affordable Care Act. With 20 state attorneys general suing over provisions in the law, the Justice Department says it won’t defend the provisions, and is indeed asking the court to halt them—examples include bans on insurers denying coverage and charging people with pre-existing conditions more for their coverage. Wall Street Journal
Today is the start of what is certain to be a tempestuous G7 summit—or as many are now calling it, G6 vs 1—in Canada. French President Emmanuel Macron said everyone’s fine with signing a six-country agreement without the U.S. at the end of the confab. President Trump is going in swinging, accusing everyone of giving the U.S. unfair trade terms. It’s going to be quite the party. CNBC
Deutsche Bank and Commerzbank
Deutsche Bank chairman Paul Achleitner is considering a merger with chief domestic rival Commerzbank (again.) Bloomberg got a great quote from Stern School of Business emeritus professor Roy Smith on that one: “It’s like tying two drunks together to give them more stability.” The two banks apparently did hold talks in the summer of 2016, but called them off in order to focus on their individual restructuring plans. Bloomberg
Around the Water Cooler
It would be great to go a few days with no mention of a Facebook privacy flub, but they just keep coming to light. This time it’s a Facebook software bug that accidentally changed the privacy settings of 14 million users, exposing their posts to the public when they wanted them limited to their friends. The bug was active from May 18-27—Facebook spotted it May 22, but took five days to fully fix it. Fortune
The International Monetary Fund has struck a three-year loan deal with Argentina, that will involve up to $50 billion for propping up the country’s struggling economy. The IMF board still needs to approve the deal, described by the fund thusly: “The [Argentine] authorities have indicated that they intend to draw on the first tranche of the arrangement, but subsequently treat the loan as precautionary.” BBC
Senate Democrats have made a last-ditch attempt to try to get Speaker Paul Ryan to schedule a House vote on reversing the FCC’s rollback of net neutrality rules. The rules formally expire Monday. The Senate has already voted to stop them from doing so, but the House would need to vote likewise in order for that to happen—and President Trump would need to back them up. Fat chance of that happening. Reuters
Christine McDaniel, a former senior economist with the White House Council of Economic Advisors, writes for Fortune that President Trump is right to say the World Trade Organization is slow, but the way to fix it is to reform the system from within, not to throw around “heavy-handed tariffs and threats to roll back free-trade agreements.” Fortune