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The climate crisis has been crowded out in recent months by the health crisis, the economic crisis and the racial justice crisis. (Too many crises.) But needless to say, it hasn’t gone away. Fortune assembled a group of members of its CEO Initiative yesterday, led by Dow CEO Jim Fitterling and Nestle CEO Mark Schneider, to talk about strategies for addressing the problem.
The conversation was held under Chatham House rules, so I can’t report individual comments. What was striking to me about the conversation, though, is this: Until a dozen years ago, the climate change discussion was all about government policy. Indeed, in 2008, the U.S. had two presidential candidates–Barack Obama and John McCain–who both favored a national cap on carbon emissions. Business, at least in the U.S., was then fairly new to the conversation, having only recently been organized by leaders like GE CEO Jeff Immelt and Duke Power CEO Jim Rogers, under the auspices of USCAP. “If we are not at the table, we will be on the menu,” Rogers said, giving the defensive rationale for corporate engagement.
In yesterday’s discussion, however, government policy was barely discussed. The CEOs focused their efforts on what the private sector can do to meet the U.N.’s ambitious targets for reducing carbon emissions and to sharply reduce plastic waste. Meeting such goals would clearly be easier with coherent government policies. But as one CEO put it, solutions that require government policy “will lead us down a rabbit hole.” Today, business feels it must lead on climate–if only because government is not.
Separately, Fortune analytics released some new numbers on work-from-home yesterday, based on a survey of Americans in collaboration with SurveyMonkey. The takeaways:
- 46% of U.S. workers say they’ve been able to work remotely during the pandemic.
- 29% of remote workers say they feel less productive since the pandemic began, while only 24% say they feel more productive. The rest say they are “equally productive.”
- 41% of remote workers say they would choose to exclusively work from home this fall if the decision were up to them.
One person clearly benefitting from the work-from-home trend is Twilio CEO Jeff Lawson, whose stock has risen 150% since the start of the pandemic, giving the cloud-based communications company a $37 billion market value. Lawson told me yesterday that a survey conducted by Twilio found that “on average, (businesses) say their digital road maps were accelerated by five years during the crisis… The sentiment I’ve heard is: Last year, digital transformation was led by the CIO. This year, it is led by COVID-19.”
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The U.S. economy shrank by almost a third in the second quarter, when measured on an annualized basis. It was the biggest quarterly decline on record (i.e. since 1947.) Labor data suggests the U.S. is in a recovery now, but let's see how new surges of the coronavirus affect Q3's GDP growth. Fortune
France's GDP took a 13.8% hit in Q2 and Spain's contracted by 18.5%. (Those measures were on a quarter-on-quarter basis). ADM Investor Services chief economist Marc Ostwald: "All the growth in GDP seen in the 2010-2019 decade has been wiped out in five months." The French constriction industry was particularly hard-hit, and household spending fell by 11%. Associated Press
Facebook may be under scrutiny on multiple fronts (antitrust, content moderation) but in terms of results, it's doing just fine. Analysts expected $17.4 billion in Q2 revenues, and Facebook delivered $18.69 billion, representing an 11% year-on-year increase. Daily active users were up 15% to 2.47 billion. Analysts believe Instagram is a major contributor to Facebook's current success. Fortune
Li Auto raised $1.1 billion in a Nasdaq IPO yesterday. It's not the only Chinese electric-car maker to list in the U.S.–Nio did so a couple years ago, and Xpeng plans to follow later this year. The timing is curious given antipathy from Capitol Hill, where lawmakers want to boost accountability for Chinese firms floating on U.S. exchanges. Li Auto's own SEC filing concedes that the SEC cannot currently inspect its audits, and it may have to delist if those lawmakers get their way. Fortune
AROUND THE WATER COOLER
British Airways parent IAG will raise almost $3.3 billion to shore up its finances, following a stunning 98% drop in passenger numbers during Q2. The company lost a record $1.62 billion during that quarter. IAG has already secured the support of Qatar Airways, its biggest shareholders, in its quest to get investors to give it more cash. Guardian
The Dutch carrier KLM will cut 1,500 more jobs, after reporting a $1.8 billion operating loss for Q2. That means its 33,000-strong pre-pandemic workforce will be 20% smaller by 2022. KLM is half of Air France-KLM, which collectively has $16.85 billion in liquidity or credit lines to "weather the crisis," thanks to French and Dutch government bailouts. Reuters
Children under five who contract COVID-19 may show milder symptoms than many adults, but they appear to have higher concentrations of the novel coronavirus, according to researchers at Lurie Children's Hospital of Chicago and Northwestern University. However, the researchers did not test how contagious such kids are, so it's not clear what the implications are for day-care reopenings. Fortune
Jeffrey Sonnenfeld, the Lester Crown professor of leadership studies at Yale's School of Management, writes for Fortune that the tech CEOs who testified before Congress Wednesday were–somehow, given their platoons of attorneys and ample prep time–underprepared. "Each of the tech CEOs’ opening scripts celebrated patriotic, American Dream talking points featuring givebacks to smaller enterprises," he writes. "What they did not provide is any acknowledgement of genuine problems which followed from their success." Fortune
This edition of CEO Daily was edited by David Meyer.