The latest Fortune 500 CEO survey does not show a lot of optimism
Our annual survey of Fortune 500 CEOs is out this morning, and shows they have become a dour lot. Seventy-five percent expect a recession this year or next. On average, they also expect inflation to remain (slightly) over 5% next year. Inflation, recession and talent shortages get roughly equal billing as the three greatest threats they face—ranking above geopolitics, cybersecurity, the pandemic and climate.
The survey shows that the majority—58%—now say they have a plan to achieve net zero emissions by 2050 or before. That’s up significantly from 36% last year. And another 31% are working on a plan. But the companies split down the middle—47% each—when asked whether that plan addresses so-called “scope three” emissions of suppliers and users.
And here’s a big change from last year: While companies are increasing their commitments to ESG goals, they’re backing off vocal public positions on social and political issues. Some 72% said CEOS “have recently gotten too involved in commenting on social and political issues, and need to pull back,” while only 28% said CEOs “have a responsibility to speak out on important social and political issues, and should continue to do so.” Last year, the exact same question revealed a 50-50 split. My guess is you can credit Disney’s travails in Florida for the change. No one envies that part of the Magic Kingdom.
Finally, cryptocurrencies are still far from the plans of big company CEOs. Ninety percent say they have no plans to either accept crypto as payment or hold crypto on their balance sheet in the next two years—down only slightly from 93% last year.
Separately, yesterday was the opening of Fortune Brainstorm Design in Brooklyn, held in partnership with IBM and Salesforce. The event gave me the opportunity to interview Valerie Casey, head of design at Walmart. Casey said she is using her position to help the retail giant transform to what CEO Doug McMillon calls a “regenerative company.” What does that mean? Here’s Casey:
“Regeneration is actually moving from an extractive mentality to an additive mentality…adding value for stakeholders, not just shareholders…. It’s free college tuition and books for any associate at Walmart…donating a billion dollars a year from the Walmart Foundation to local communities….getting to zero waste by 2025… And by 2030, project gigaton is removing a gigaton of emissions with the help of our suppliers… And then, finally, 100% renewable by 2035.”
No small ambition for the Fortune 500’s number one company, and an example of stakeholder capitalism in action. (You can see the full new Fortune 500 list here, and you can watch today’s livestream from Brainstorm Design here.)
Speaking of the 500, Ellen McGirt and I had a fun conversation with Edward Jones CEO Penny Pennington—one of a record 44 female CEOs on the list this year—for this week’s episode of our Leadership Next podcast. You can listen on Apple or Spotify. More news below.
Evidence obtained via a hack of a Xinjiang "re-education" camp has been released. It includes photos of Uyghur detainees—as young as 15—and of heavily armed strike units who, leaked documents suggest, are told to use their weapons if someone tries to escape. People being transferred between facilities are blindfolded and shackled, even if they are sick. The U.K. has already expressed its outrage, with Foreign Secretary Liz Truss saying her country remains "committed to holding China to account." BBC
Snap warned employees that the social media firm will miss its quarterly revenue targets, and its share price fell 30% in extended trading. CEO Evan Spiegel: "While our revenue continues to grow year-over-year, it is growing more slowly than we expected at this time." The episode also seemed to hit tech peers including Meta (-7%), Twitter (-4%), and Pinterest (-12%). CNBC
Pfizer and BioNTech yesterday reported that their COVID vaccine was both safe and effective for under-5s, and they would apply for FDA and EMA clearance in the coming weeks. Moderna said last month that its vaccine for under-6s was good to go. The FDA's independent advisory panel will discuss (and possibly issue recommendations on) the matter on June 15. Fortune
Tesla has failed in an attempt to have "rampant sexual harassment" claims moved to behind-doors arbitration. Alameda County Superior Court Judge Stephen Kaus said that, even though a complainant signed an arbitration agreement forgoing her right to sue, the case will need to be heard in open court. Fortune
AROUND THE WATERCOOLER
This year's Fortune 500 shows a record number of female-led companies, at 44. It also shows that female CEOs are "finding stability and staying power atop Fortune 500 companies," writes Emma Hinchliffe. The list also includes six companies with Black CEOs, which means a return to the record level set in 2012—and for the first time, a Black founder (Compass's Robert Reffkin) is on the list.
Ukraine has accused tech firms SAP and Cloudflare of "still continuing to work in Russia and to pay taxes to help finance the Russian army." SAP says it is heading for an "orderly exit" from Russia, while Cloudflare argues "withdrawal by Internet companies can have the unintended effect of advancing and entrenching the interests of the Russian government to control the internet in Russia." Politico
A Russian diplomat at the United Nations has quit, saying: "Never have I been so ashamed of my country as on February 24 this year." Boris Bondarev said the invasion was "not only a crime against the Ukrainian people, but also, perhaps, the most serious crime against the people of Russia, with a bold letter Z crossing out all hopes and prospects for a prosperous free society in our country." Washington Post
Samsung has announced plans to spend a whopping $360 billion over the next five years to shore up the conglomerate's various businesses, from chips to biopharma. Bloomberg
This edition of CEO Daily was edited by David Meyer.
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