Good morning.
Walmart and GM are the two companies I most often mention when asked to name those that are taking climate change seriously. Both are heartland U.S. companies; neither can fairly be characterized as “woke.” Yet the first has adopted an ambitious program called Project Gigaton to push its suppliers to adopt Net Zero emissions-reduction plans, and the second has pledged to eliminate all tailpipe emissions from new cars by 2035.
So I was pleased to see the executives responsible for ESG policies at the two companies—Walmart’s Kathleen McLaughlin and GM’s Kristen Siemen—join us for our first Fortune Impact Initiative, held in partnership with EVERFI. I asked McLaughlin if suppliers were required to participate in Project Gigaton. Her response:
“So this has always been a debate at Walmart—do we require? Or do we just make it an invitation?…We decided to make it voluntary and see how far we got. Well you mentioned we had 4,500 suppliers in the program as of a year ago. We’ll be disclosing our new number and it’s even bigger. And those suppliers represent over 70% of our business.”
Walmart, of course, is notorious for forcing suppliers to cut costs, so I asked McLaughlin whether some of them are saying to her: “I can cut costs or I can save the planet, but I can’t do both.”
“What we found is a couple of things. First of all, in the early days, especially, most of the interventions save suppliers money. That’s one of the reasons we have such high participation. Energy efficiency, these days even transitioning to renewables—that’s accretive. Eliminating packaging—that’s accretive. Shifting to better packaging material—that’s good. So there are a lot of accretive steps companies can take. And the second thing is just innovation. How do we do it differently.”
I asked Siemen whether GM’s bold 2035 goal was actually achievable, given the relatively modest rate of adoption of EVs today.
“We talk a lot about the need to have ‘everybody in’ during the transition. We cannot do it alone. It’s going to take public and private, it’s going to take our suppliers, our employees—all working together to come up with solutions to make this transition. But it’s a reality. It’s happening fast.”
The Impact Initiative was held in Atlanta, and former mayor and U.N. Ambassador Andrew Young joined us, along with John Hope Bryant, to talk about the role the business community can play in creating opportunity for the disadvantaged. Young recounted the story of how Coca-Cola threatened to leave the city if the business community refused to honor Martin Luther King after he received the Nobel Peace Prize in 1964. You can watch the full interview here.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Bear exit
The Dow Jones Industrial Average soared by more than 700 points yesterday, pulling it out of a bear market. It, the S&P 500 and the Nasdaq Composite have all now enjoyed two consecutive months of gains. This latest rally was sparked by the Federal Reserve indicating a slowdown in interest rate rises, which analysts see as opening up the possibility of a soft landing. Wall Street Journal
Neuralink timeline
Elon Musk’s Neuralink will begin human clinical trials of its brain chip implants in six months, the poly-mogul has announced after the company repeatedly missed his earlier timelines. The brain chip interfaces are supposed to help disabled patients move and communicate; it has already been tested in monkeys. Musk’s deadlines have a tendency not to be met, whether they be for SpaceX’s Mars mission or Tesla’s self-driving cars. Fortune
Crypto regulations
The EU has a new regulatory framework that will come into force in 2024, but in the wake of FTX’s spectacular collapse, lawmakers there are now wondering if the incoming rules will be sufficient. The Markets in Crypto-Assets (Mica) package would allow crypto firms to operate across the EU if they get regulatory approval in one member state, but FTX got a license in Cyprus, and look what happened. German member of the European Parliament Markus Ferber: “If [this subsidiary] even remotely behaved like its parent company, this raises major questions in relation to the quality of financial services supervision in Cyprus.” Financial Times
AROUND THE WATERCOOLER
SBF defends his actions and distances himself from Alameda in first live interview since FTX’s collapse, by Will Daniel
Elon Musk says he met with Apple CEO Tim Cook and ‘resolved the misunderstanding’ after several tweets attacking the company, by Tristan Bove
Aging boomers are making it harder to tame inflation—and there are no quick solutions in sight, by Megan Leonhardt
Hedge funder Michael Burry, made famous in ‘The Big Short,’ warns of an ‘extended multiyear recession’, by Will Daniel
How CEOs can lead in a recession and come out stronger: 5 powerful strategies from corner-office veterans, by Shawn Tully
This edition of CEO Daily was edited by David Meyer.
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