Good morning.
If stakeholder capitalism is ever going to be more than a catchphrase, it will need a robust system of metrics and accountability to support it. That won’t happen overnight. But it needs to start happening now.
That’s why I was encouraged to hear from Tim Ryan, the U.S. chair of PwC, that his firm is announcing this morning a “once in a generation” strategy change aimed at doing just that.
“It was very clear to us that our clients for the next decade-plus will be focusing on two issues,” he told me. “One is trust, the other is sustained outcomes.”
“When you look at trust, the bar is only going up, and the number of topics is only increasing. Expectations are going higher. And they are going higher on a much broader set of topics: ethics, worker pay, worker safety, DEI, ESG, data use, A.I. ethics. Do you pay your fair share of taxes? Are you moral, not just legal? We are going to help our clients build the culture, the systems, the processes, the checks and balances, and ultimately the reporting, all around trust.”
As for sustained outcomes, said: “Companies operate in a hyper competitive environment. What they are fighting for is investor capital, and the way they win investor confidence is to outperform—teaching people, not leaving them behind, evolving culture, training. We see the opportunity to drive sustained outcomes that are human-led and tech-enabled.”
You can read more about how PwC intends to do that in Ryan’s blog post this morning, here. But the direction is clear. Rising stakeholder demands are a fact of life, and companies need to develop the muscles and metrics to manage them. I asked Ryan if he was worried PwC was getting too far out in front of its clients, many of whom haven’t yet fully embraced the shift to stakeholder accountability. His response:
“All of our clients are different, but most have a common theme. They want us to be objective and give them our best judgment on where the world is headed. Our job is to make sure we lay the whole picture on the table.”
Separately, our guest on the Leadership Next podcast this week is Dow CEO Jim Fitterling. Fitterling is a perfect illustration of the new world Ryan references above. He runs a petrochemical company but is committed to eliminating carbon emissions in three decades. He is the biggest maker of plastics in the world but believes single-use plastics should be eliminated. How does he square his obligation to make profits with this commitment to environmental purpose? Check out the interview on Apple or Spotify.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Aircraft subsidies
The U.S. and the EU are reportedly on the brink of officially announcing an end to their old-enough-to-drive dispute over Boeing and Airbus subsidies—an event that would lift the threat of tariffs on billions in goods. The deal would indicate a thawing of trade relations under the Biden administration, and perhaps an opportunity for the U.S. and EU to train their trade guns on China, rather than each other. Fortune
Facebook privacy
The EU's top court dropped a rather significant ruling this morning: under certain circumstances, any EU country's privacy watchdog can enforce the tough General Data Protection Regulation (GDPR) against a company, not just the regulator in the country where the company has its European HQ. This specific case is about Facebook and Belgium, but the floodgates are now open for many more Big Tech enforcements and fines across the EU. Fortune
Novavax efficacy
Novavax has reported 90% efficacy for its COVID-19 vaccine, based on a large, late-stage study in the U.S. and Mexico. The company says it will seek U.S. and European approval for its jab by the end of September. Fortune
U.K. lockdown
England was going to fully emerge from lockdown on the 21st but, with the Delta variant now having taken hold across the nation, that's being delayed for at least four weeks so as to ensure more people are fully vaccinated (a lot of people have had one jab, which doesn't offer enough protection). Businesses, particularly in hospitality, are furious that they're not being given enough support to weather the extension. The Delta variant is fast-spreading and hard-hitting, but early signs are that current vaccines work well against it. Fortune
AROUND THE WATER COOLER
Housing prices
Pre- 2008-style housing-bubble warnings are flashing around the globe, Bloomberg Economics reports. Economist Niraj Shah: "A cocktail of ingredients is sending house prices to unprecedented levels worldwide. Record low interest rates, unparalleled fiscal stimulus, lockdown savings ready to be used as deposits, limited housing stock, and expectations of a robust recovery in the global economy are all contributing." Bloomberg
Steel price
UBS reckons the U.S. steel price, which has been exploding this year, may continue rising into the first half of next year. Good news for the likes of Nucor; not such good news for the construction industry. Fortune
Didi billions
Didi's imminent U.S. listing will likely make billionaires of co-founders Cheng Wei and Jean Liu, in the latest example of ride-hailing riches being minted in Asia. Fortune
Windows support
Windows 10, which was released six years ago, will no longer be supported from Oct. 14, 2025. Microsoft announced the cutoff date yesterday; it's expected to launch Windows 11, or whatever it will be called, later this month. Fortune
This edition of CEO Daily was edited by David Meyer.
