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Good morning.
There is something surreal about being in the biggest economic downturn since the 1930s, and yet day after day hearing extraordinary stories of business success. To be sure, there have always been companies that do well in downturns. Netflix, Coca-Cola and Auto Zone all thrived in the last one. But that’s nothing like the extraordinary success stories coming out of the current transformative trough.
Yesterday, I spoke to the CEO of Hint Water, Kara Goldin, whose lightly-fruit-flavored water has soared during the pandemic, with ecommerce sales tripling. “It’s crazy,” she told me. Goldin called to promote her new book, Undaunted: Overcoming Doubts + Doubting—an inspiring story of the hurdles she overcame to build her now-iconic business. She started out, by the way, wanting to work at Fortune. Today, all of us at Fortune want to be her!
I also spoke with Vlad Shmunis, CEO of RingCentral, which provides cloud-based telephone, messaging, and video conferencing services. RingCentral made its big bet on the notion that work would become mobile. But “what COVID did is it changed from ‘work from anywhere’ to ‘work from home,’ and from a ‘nice to have’ to a ‘must have’.” The company has posted year over year growth of 30% for the last two quarters, and seen its market value rise by more than 50%. “We expect to be one of the long-term beneficiaries” of the crisis,” Shmunis says.
New research released today by the McKinsey Global Institute provides some additional insight into the extraordinary nature of this moment. CEO Daily got an early look. Some takeaways:
- 85% of C-suite executives report a significant acceleration of digitization and automation during the pandemic.
- 83% said they plan to hire more people for health and safety roles.
- 70% said they expect to use more temporary workers and contractors onsite at their company in the future.
- 15% of the executives said at least one-tenth of their employees will continue to work remotely two or more days a week after the pandemic passes—double the number of respondents who said that before the virus.
More news below. And be sure to read why Bill Gates thinks a vaccine won’t be the end of the pandemic.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
China carbon
China is aiming to become carbon-neutral by 2060, President Xi Jinping told the U.N. General Assembly. Xi said his country would likely hit peak emissions this decade. The announcement came as a surprise, and an important one at that; China is the world's biggest carbon-dioxide emitter, being responsible for around 28% of all such emissions. Fortune
Tesla plan
Tesla yesterday announced a plan to vertically integrate much of its battery production, "from mining the ore to the complete battery pack." This will apparently cut costs for the company, with batteries being produced more cheaply than they currently are via partners such as LG and Panasonic. Tesla has already bought land in Nevada to test out a new process for mining lithium. Fortune
Apple India
Apple has opened its first online store in India, offering the staples of shopping and tech support. Until now, smartphone buyers in the country were forced to buy iPhones and the rest through third-party retailers, thanks to a now-relaxed law that meant foreign retailers such as Apple could only offer direct sales if they crossed a 30% made-in-India threshold. Fortune
Brexit fallout
JPMorgan is about to become one of the biggest banks in Germany, courtesy of a plan to shift around $230 billion in assets from London to Frankfurt. The migration of assets will reportedly be completed by the end of the year. Financial firms are desperate to maintain ties to service clients across Europe, and the "passporting rights" that allow them to do so from the U.K. seem likely to disappear when Brexit truly kicks in at the end of the year. Bloomberg
AROUND THE WATER COOLER
Facebook Europe
A Facebook lawyer said in a court filing that it was "not clear" how the firm "could continue to provide the Facebook and Instagram services in the EU" if Ireland's privacy regulator forces it to stop transferring users' data to the U.S. (backstory here). Facebook claimed this suggestion was not a threat to withdraw from Europe, but rather a statement of reality. So much for the idea that the likes of Facebook might choose to respond to the U.S.'s lack of privacy safeguards (the reason for the looming suspension) by creating functionally separate European units. Guardian
Amazon tactics
Amazon has been giving its own smart speakers, video doorbells and other devices a head-start on its platform by limiting the ability of competitors to promote their rival products through sponsored-product ads there. "News flash: retailers promote their own products and often don’t sell products of competitors," an Amazon spokesman told the Wall Street Journal, perhaps unwisely given the fact that Amazon is under intense scrutiny by antitrust officials around the world over allegations that it uses its strong market position to stymie rivals. WSJ
Wage subsidies
The U.K.'s pandemic furlough scheme may be drawing to a close, but Chancellor Rishi Sunak is reportedly preparing to shift to a German-style wage-subsidy scheme as its replacement. It seems likely that something will be needed to continue supporting workers, especially as Prime Minister Boris Johnson just announced at least six months of heightened restrictions on activities, and the governor of the Bank of England is warning about the implications of ending the furlough program. Financial Times
Stakeholder capitalism
A new report from Test of Corporate Purpose (the name says it all) and KKS Advisors shows that Business Roundtable members who signed onto the "stakeholder capitalism" shift last year did not outperform their non-signatory counterparts, nor their European counterparts, in the "corporate purpose" stakes during this year's crises. The report particularly lays into Wells Fargo (for clamping down on efforts to turn the bank into a benefit corporation) and Amazon (for allegedly failing to protect workers while making piles of cash during the pandemic.) BlackRock gets a thumbs-up, though. New York Times
This edition of CEO Daily was edited by David Meyer.
