Good morning. Eamon Barrett filling in once more for Alan Murray.
Here’s a question well suited for this newsletter’s readers: What is the role of a CEO?
According to architect and pioneer of the circular economy movement, Bill McDonough, the role of a CEO is to do the right thing. Managers can worry about numbers and performance, but CEOs should worry about the company’s moral direction.
McDonough was speaking at the Fortune’s Global Sustainability Conference, which is ongoing in Yunnan, China. Responding to the rise of Chief Sustainability Officer as a role at many corporate giants, McDonough said, “The CEO is the CSO, because they’re the ones who have to lead this.”
That’s certainly a theme we’ve seen emerging at this conference—the belief that company leaders need to be proactive in mainstreaming sustainability into corporate planning. Yesterday I highlighted Dow CEO Jim Fitterling’s revelation that he was spending 25% of his time on sustainable efforts. However, McDonough was a little unimpressed by Fitterling’s initiatives.
“What we heard from Jim is a very classic story of eco efficiency… It’s just talking about what you’re not going to do,” McDonough said, arguing that the focus should be not on doing less bad, but on doing good. “The real question is, how do we grow?”
That’s the question we’re trying to solve here at the forum and, in respect to that, disagreements are welcome. Nest founder Tony Fadell made an even more pointed criticism of Fitterling’s argument that the problem with plastic was essentially a waste management issue. Fadell called that a lie.
Bringing those opposing voices together is what Fortune’s conferences are all about and it is particularly pertinent to have disagreement here. As Clay Chandler said in his opening remarks, the time has come for the “grown ups” of industry to solve the sustainability issue. Working through disagreements is a vital part of that.
More news below.
Facebook is in yet more privacy-related hot water after an exposed server was found online containing over 419 million records of users’ phone numbers. That includes 133 million Americans’ numbers and 18 million British people’s numbers, so expect Facebook to face trouble, again, under EU data protection laws. TechCrunch
YouTube will pay $170 million to settle allegations of violating children’s privacy by collecting their personal data without parental consent. The Federal Trade Commission’s two Democrats voted against the deal, saying it let YouTube off too easily. Alphabet’s shares jumped 1.1% on the news. Fortune
High-level trade talks between the U.S. and China will recommence next month, Chinese state-run TV has said. Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin apparently had a phone chat this morning, and further groundwork will be laid later this month. Wall Street Journal
Analysts and would-be investors were concerned about a $5.9 million all-stock payment WeWork made to the investment vehicle of CEO Adam Neumann for the privilege of using the trademarked word “we”—so he’s returned it. The company will also add a woman (Harvard’s Frances Frei) to its otherwise all-male board of directors. Financial Times
AROUND THE WATER COOLER
Nissan CEO Hiroto Saikawa has confirmed that the company overcompensated him and has promised to return the money. However, he denies wrongdoing, claiming that the compensation scheme’s operation—a bonus payout was delayed for a week to benefit from a share price boost—was to his knowledge at the time “handled properly.” BBC
The first half of 2019 was dire for investment banks, which saw revenues plummet to 13-year lows. The starkest drop-off was in equities. The causes for the decline include the trade war, slowing growth, new European investor-protection rules and low interest rates. Financial Times
Boris Johnson yesterday became the first British prime minister ever to lose his first three parliamentary votes. Not only is Parliament’s no-deal-Brexit-blocking legislation on course to be set in stone by Monday next week (just before Johnson’s five-week suspension of Parliament) but lawmakers refused to back the PM’s call for a snap election—they first want to make sure he can’t use the election to push through a no-deal Brexit at the end of October. AP
Walmart’s decision to stop selling certain types of gun ammunition has had predictable results in the media. Fox’s Tucker Carlson lambasted the company for “sounding woke” while pushing “the appalling lie that brightly colored plastic crap from China is going to make us happy.” MSNBC notes that some Walmart employees had petitioned management to stop gun sales. MSNBC