Fortune’s Change the World list is out this morning, celebrating companies that make measurable progress addressing pressing social problems as part of their core business strategy. This is the seventh year of the list, and it has become a chronicle of the growing corporate commitment to stakeholder capitalism. We’re not talking about purpose instead of profit here. We are talking about purpose and profit—the best way to assure such programs are sustainable.
Top of the list are the vaccine makers—particularly those that have made extra effort to reach the least lucrative markets, like Johnson & Johnson and AstraZeneca, which are distributing huge volumes priced at cost. Other interesting entries: Costco (#3) and Bank of America (#9) for their aggressive efforts to raise wages at the bottom of the scale; Daimler (#6) for attacking the dirty secret of the electric vehicle industry—human rights abuses in the cobalt supply chain; PayPal (#7) for its commitment to Black and Latinx owned financial institutions; Maersk (#46) for its focus on clean fuels; Yara (#29) for its huge commitment to making African agriculture both productive and green; and Genpact (#45) for helping global businesses solve the COVID test conundrum. Spend some time with this list. It shows stakeholder capitalism can have powerful positive effects.
Also, Fortune Brand Studio has a new podcast out today, Sustainability Inc., produced for Boston Consulting Group and hosted by environmental journalist Gaia Vince. BCG CEO Rich Lesser and I sat down with Vince for the first episode, to talk about where business stands in the fight against climate change. Some excerpts.
“As companies start to focus more on long-term shareholder value creation, it becomes increasingly clear that purpose is part of that journey. And purpose means recognizing the interests and needs and responsibilities to other stakeholders. And climate quickly rises to the top of the list because it touches everyone in very tangible ways.”
“My personal interest in this is more about human institutions. How do you get people to organize themselves to take on a very complex, long-term problems when there are so many short-term problems to distract them. That’s the fundamental problem of civilization. How do we build great cathedrals?”
“We are at an inflection point in terms of the number of companies that are taking this seriously…I’m impressed with how many of the leading auto makers have taken this seriously. They are a big part of the economy. I look at some of the key consumer products companies…Unilever often stands out…There are not enough of them yet, but we are on a good path.”
You can access the podcast here. More news below.
Facebook will introduce new features that are supposed to help teens use Instagram more safely, by encouraging them to take breaks and stop looking at unhealthy content all the time. The move comes as the company endures an almighty storm of criticism over its prioritization of profit over wellbeing, and it's unlikely that the new features will put that to an end. Fortune
Russia has denied having anything to do with a recent jump in European gas prices, but suggested that future shortages may be avoided if Europe stops treating Russia as an adversary. Vladimir Chizov, Russia's EU ambassador: "The crux of the matter is only a matter of phraseology," he said. “Change adversary to partner and things get resolved easier…when the EU finds enough political will to do this, they will know where to find us." Financial Times
U.K. vs EU
The EU is expected to propose a way through its long-running customs spat with Brexit Britain on Wednesday, but London may well suspend part of their deal anyway. Long story short: a trade war is a distinct possibility. BBC
AstraZeneca says its experimental antibody drug cocktail for treating COVID-19 has been successful in reducing severe disease or death. Biopharma R&D chief Mene Pangalos: "An early intervention with our antibody can give a significant reduction in progression to severe disease, with continued protection for more than six months." Fortune
AROUND THE WATER COOLER
Disney in China
The last year has seen three Disney movies run into political trouble in China, despite having all been designed to appeal to audiences there. The latest is Eternals, a Marvel flick that might not see release in China at all. As this piece notes: "Hollywood executives are now observing new scrutiny of Western influence by Chinese audiences, favoritism toward local releases by Chinese officials and an industrywide crackdown overseen by President Xi Jinping that have combined to potentially jeopardize any Hollywood export with a whiff of criticism of the country associated with it." Wall Street Journal
India looks set to be the next country to enter an energy crisis, with coal reserves running out at many power plants. India Ratings and Research associate director Nitin Bansal: "Nobody thought that the industrial demand would pick up so quickly, so power stations did not bother to replenish their coal inventory. But now stocks are depleting day by day." Fortune
Electric vehicles outsold conventional diesel vehicles in Europe last month. This could be partly down to the semiconductor shortage, which is hurting the traditional combustion-engine sector, and to Tesla's logistical strategy, in which the final month of any quarter sees a particularly strong showing, so it could be anomalous—but it still points to the future norm. Fortune
Evergrande chairman Hui Ka Yan may lose control of his empire, and it doesn't look like other tycoons or local governments will come to bail him out. As this piece notes: "Even his long-term backers may be losing patience. Chinese Estates Holdings Ltd., controlled by the family of property mogul and fellow poker pal Joseph Lau, has been selling Evergrande stock and said it could unload its entire stake." Fortune
This edition of CEO Daily was edited by David Meyer.
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