Good morning.
Here’s a sign of the times: 25% of U.S. CEOs who are pursuing M&A activities this year say their “primary goal” is strengthening their ESG performance or improving their sustainability footprint. That’s the first time I’ve seen ESG and sustainability show up as a significant driver of deals. The survey of U.S. CEOs, which was conducted by EY, shows ESG and sustainability outranked “acquisition focused on increasing operational capabilities” (24%), and “acquisition of technology, talent, new production capabilities or innovative startups” (16%). The survey should be a wake-up call for those who still believe the corporate focus on climate change is merely “green washing.” According to EY, “the majority of US CEO respondents (75%) have adopted ESG for strategic reasons—such as competitive advantage and lower cost of capital—rather than pressure from regulators.”
When asked “What challenges and opportunities are contributing most to the changing role of the CEO?”, 28% of those surveyed by EY answered “the growing focus on ESG,” compared with 21% who cited “digital transformation” and 16% who cited “workforce and culture.” The survey included 336 firms of various sizes—63% public and 37% private.
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Separately, Fortune this morning is opening up its Fortune Connect community—aimed at informing, educating and inspiring the next generation of business leadership—to executives beyond those who work at the 20 companies currently supporting the platform. If you are interested in building muscle as a purpose-driven leader or interested in learning how the new world of ESG management really works, Connect could be a community for you.
Fortune Connect has over 1,000 diverse members from companies including Accenture, Genpact, IBM, PayPal, RBC, Salesforce, Workday, Fedex, GM, Hyatt, Xerox and more. You can apply for membership here.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Stocks up
European and Asian markets rose this morning, following Wall Street's Tuesday rally, which was sparked by Fed Chair Jay Powell's pledge to fight inflation, which he called a severe threat to jobs recovery. U.S. futures are up and down, though. Financial Times
Omicron effect
Half of Europe's population may be infected with the Omicron variant over the next two months, the World Health Organization has warned, based on current trends. Here's how various European countries are responding to the strain's spread. (Bonus read 1: Bill Gates thinks all this could provide a bridge to a future where COVID is treated like seasonal flu.) (Bonus read 2: One expert thinks the U.K. could already be on the other side of that bridge.) (Bonus read 3: U.S. hospitals are at their limit thanks to Omicron.) Fortune
Crypto suit
Kim Kardashian and Floyd Mayweather are being sued for their promotion of a cryptocurrency called EthereumMax. Investors participating in the class action claim they were misled, and the celebrities were artificially inflating the token's price. CNBC
Amazon vs unions
The re-do of Amazon workers' unionization vote in Bessemer, Ala. will take place on Feb. 4. The original vote was invalidated because of reports that Amazon illegally interfered with it. The Verge
AROUND THE WATER COOLER
Cannabinoids vs COVID
A published lab study suggests that two cannabis-derived compounds may block the coronavirus from infecting healthy human cells. There could be implications both for preventing and treating COVID infections, though more research is needed. Fortune
Digital yuan
China's central-bank-backed digital yuan will have its "global coming out party" at the Winter Olympics, a few weeks from now. As Fortune's Eamon Barrett explains: "Foreign visitors will be able to access money-changing vending machines where foreign currency can be converted into digital yuan and loaded onto a temporary debit card. The visitor can then use the card to make contactless transactions throughout the village." (Bonus read: China is jailing people for up to four years for breaking COVID rules.) Fortune
Chaotic transition
Climate adaptation will be messy, so embrace the chaos. That's one big message from Zurich Insurance Group chief risk officer Peter Giger in his comments on a World Economic Forum study about the likelihood of successful "climate action" (spoiler: we're not seeing enough, and that failure is the greatest threat to society in the coming decade.) Fortune
Ark future
Fortune's Shawn Tully on Cathie Wood's portfolio: "Wood has caught one of the most powerful currents in investment history. Now the tide's reversing, the white caps are rising, and ARK's heading for a shipwreck." Fortune
This edition of CEO Daily was edited by David Meyer.
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