Good morning.
A few CEO Daily readers have chided me recently for devoting so much space to climate issues. But I really do believe this has become one of—if not the—defining business issue of 2021.
Rich Lesser, CEO of BCG, confirmed that view when I talked with him yesterday. “There’s a level of engagement at the most senior levels of companies on tackling climate change that has never been higher,” he said. “The amount of energy that this topic gets when I’m with other business leaders has just gone way up. It’s getting the kind of attention that digital and technology were getting five years ago. You almost can’t be in a discussion with CEOs where they aren’t talking about this.”
That’s partly a reflection of rising demands from stakeholders, including employees and investors. But it also reflects a business imperative. As more companies make “Scope 3” commitments to reduce carbon emissions across their value chains, they put pressure on partners and suppliers to help meet the goals. Moreover, the climate effort is now estimated to require $3-$5 trillion a year in global investment over the next three decades—a sum no savvy businessperson can afford to ignore. “Increasingly, this will be one of the defining questions about how you build competitive advantage in the decades ahead,” Lesser said.
Lesser, who is stepping down as CEO at the end of this month and becoming the firm’s global chair, also serves as chief adviser to the World Economic Forum’s Alliance of CEO Climate Leaders—a group of more than 100 who’ve firmly committed to reach net zero by 2050. But he says even with rising business commitments, which BCG calculates have doubled annually since 2015, there is still a long way to go. And he believes governments need to step in to accelerate the effort—imposing a price on carbon emissions, imposing penalties on companies and countries that fail to take action, and providing incentives for climate technology breakthroughs. “Absent government action, I don’t think business will go far enough or move fast enough.”
BCG is also knowledge partner for the Fortune Global Sustainability Forum, meeting virtually Sept. 28 to discuss business efforts on climate. You can sign up here. And we’ll also be wrestling with this live at the Fortune CEO Initiative in Washington, D.C., now rescheduled for Nov. 15 and 16, just two weeks after the COP 26 climate meeting in Glasgow.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
China tech
More bad news for investors in the Chinese tech sector: shares plunged again today on news that Beijing may be planning to break up Ant Group's Alipay business and create a separate app for its loan business. The government also said Friday that gig-economy companies must ensure their workers' pay and safety rights. (P.S.: The government also wants to consolidate China's electric-vehicle sector.) Fortune
Corporate tax
House Democrats are reportedly no longer seeking President Biden's favored 28% top corporate tax rate, instead aiming for 26.5% (the current maximum is 21%) in a bid to get their package of tax increases passed. Biden also proposed a 39.6% top rate on capital gains, up from 20%, but House Democrats are apparently fine with 25% instead. Fortune
Apple vs Epic
Developers of iOS apps will be able to steer users to their own in-app payment systems instead of needing to use Apple's, which requires giving the company a 15%-30% cut. That's thanks to Friday's ruling in Epic Games' case against Apple. Apart from the aforementioned point, which is a big one, Epic actually lost the rest of the suit and will have to pay Apple breach of contract damages. Fortune
Valneva woes
One of the latecomer vaccine makers, Valneva, just received a body blow; the U.K. has cancelled its order for the French company's COVID-19 vaccine candidate, which is being manufactured in Scotland ahead of hoped-for British regulatory approval later this year. The U.K. was Valneva's only big order. Shares fell 45% on the news. Fortune
AROUND THE WATER COOLER
Irish inaction
Ireland's privacy regulator has jurisdiction over much of Big Tech (as that's where Google, Facebook et al have their European headquarters) but 98% of significant complaints against those companies remain unresolved. This is hardly the first time the Irish Data Protection Commissioner has been slammed for inaction—which gums up enforcement of the GDPR privacy law across the EU—but it does put a stark figure on the effects of that indecisiveness. Financial Times
Housing stock
Softening in the U.S. housing market may intensify soon with the introduction of more inventory, as the mortgage forbearance program starts winding down at the end of this month. Zillow researchers estimate more than 210,000 more homes will come onto the market in the next two months alone. Fortune
Vaccine passports
England has scrapped its plans to make entry into nightclubs and large events contingent on presenting a vaccine passport. The government says it is still holding the plan "in reserve" in case it's needed during the fall and winter, but it seems political pushback made it unviable at this time. BBC
Wine harvest
2021 is a dreadful year for Europe's wine industry, largely thanks to climate change and its attendant heat, fires and floods: "There are typically triumphant September headlines in Italian newspapers in the years Italy overtakes neighboring France to claim the crown as the world’s biggest wine producer by volume. It’s a lock this year, but nobody is cheering." Fortune
This edition of CEO Daily was edited by David Meyer.
