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For Danone’s CEO, stakeholder capitalism ‘is a fact’

July 7, 2020, 10:37 AM UTC
Good morning.

The biggest challenge in turning “stakeholder capitalism” from a public relations talking point into a true operating system is metrics. We know how to measure returns to shareholders. But how do you measure returns to “stakeholders”? And how do you hold companies accountable for delivering, or not delivering, those returns?

One group that’s been working on that question for over a decade is the B Lab, whose goal is to “balance purpose with profit.” It has developed a rigorous certification process for companies to become “B Corporations.” To date, mostly smaller companies have been certified—Patagonia, Ben & Jerry’s, Eileen Fisher. But earlier this year, Danone—a global food company with nearly $25 billion in revenues—announced it planned to become a B Corp by 2025, committing to specific goals for its impact on health, the planet, its people and inclusiveness.

We invited Danone CEO Emmanuel Faber to join us this week on our podcast Leadership Next, to talk about that decision. You can listen to the interview here. An excerpt:

We want Danone to become a B Corp because we believe that in the world in which we live, and certainly in the world we are entering right now, there will be increased attention paid to the ethos of companies and of brands by consumers, governments, employees, civic society, and many more.”

In Faber’s view, the move toward stakeholder capitalism will continue whether businesses want it to or not.

Look at the reality…there are many stakeholders jumping into the scope of our business, whether we like it or not. When governments are just shutting down borders, forbidding exports or imports, when they are forcing localization, when in Argentina you have nationalization of soy companies…When health authorities are closing channels and sending everyone home…these are all stakeholders.” Stakeholder capitalism “is a fact.”

Faber says that, based on discussion with other CEOs, the interest in B Corp certification is growing … although “obviously still small.” But he also says, “I don’t think you need to be a B Corp to do stakeholder capitalism.” Metrics, however, remain key. What gets measured will get managed.

More news below. And thanks to all the sharp-eyed readers who dinged me yesterday for using “principle” when I meant “principal.”

More news below.

Alan Murray


'Leveling off' 

A senior Federal Reserve official says data is showing a 'leveling off' of economic activity in the U.S. as cases across the country continue to grow. Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, said it's now clear that the crisis will last longer than initially expected, and further stimulus is needed. The timing couldn't be any more urgent: unemployment benefits for millions of Americans are set to end at the end of this month. FT

Palantir to go public  

Palantir Technologies has said it has filed paperwork to go public, after years of speculation on when the company would take the jump. The company is reportedly weighing a direct listing. However, the listing revealed few concrete details about the company's finances, and didn't reveal what valuation the company's executives hope for. The company has yet to turn an annual profit, according to the Wall Street Journal. WSJ

Hong Kong vs. Big Tech

Telegram and Facebook-owned WhatsApp have said they will no longer hand over data on users to Hong Kong authorities, over concerns about the controversial new national security law in place in the autonomous region. For Facebook, it's not quite the business risk that it sounds. Neither the main platform or WhatsApp are available on the mainland—and there's no word on just how long it will commit to the self-imposed data blackout. Fortune

PPP loans 

The paycheck protection program's largest beneficiaries have now been revealed. They include recipients that may not fit the image of smaller struggling businesses. Billionaire West Virginia Gov. Jim Justice's family companies received at least $6.3 million from the package, while political organizations, church diocese and the Ayn Rand Institute also received funds. Meanwhile, 40 lobbyists with ties to President Trump secured more than $10 billion in aid. Fortune


Double Digits

The labor market has always been an unequal one for Black and Hispanic Americans. The latest job figures show that it's only getting more so, says Fortune's Lance Lambert. The jobless rate among white workers is 10.1%, while for Black workers the unemployment rate is the highest, at 15.4%. For African-Americans, unemployment has gone into double digits in 405 months, or 69.6% of the time, since the U.S. Bureau of Labor Statistics (BLS) started calculating it in 1972, he writes. For white workers, that has only happened for three months over that same period. Fortune

'Finite' immunity  

Any vaccine to ward off COVID-19 would likely be able to offer only limited protection, infectious disease expert Anthony Fauci said Monday. Fauci warned that the U.S. is still "knee deep" in the first wave of infections, and that though officials hope a vaccine will help, it is unlikely to be like a measles vaccine, which requires just one dose. He also said that it should be clear by the end of this year or early 2021 which of the 140 experimental options in the works will be proven and safe. Fortune

Are cruises safe? 

Cruise ship companies say that the ships are no more risky when it comes to contracting COVID-19 than any other public place, despite high-profile infections earlier this spring. Done correctly, a cruise ship can be one of the "safest places on earth," said the CEO of Norwegian. In March, the State Department warned against taking cruises, particularly if you have an underlying condition, and the CDC has also said that the close quarters means the virus is more likely to spread. Bloomberg

Cash-free is coming 

Fears over transmission of COVID-19 have accelerated the transition away from cash, with governments from India to Kenya to Sweden—and the UN—encouraging plastic-only payments. Cash may not be dead—80% of European payments were in cash, pre-pandemic—but it's enough of a shift to be a boon for credit cards and online payment providers like PayPal. New York Times

This edition of CEO Daily was edited by Katherine Dunn.