For the last year and a half, I’ve been looking to see the effects that the political pushback against ESG might have on corporate behavior. And to date, I haven’t found much. Companies are certainly being more cautious about speaking out on controversial social and political issues, in hopes of staying out of the political fray. But most of the corporate leaders I speak with remain committed to efforts to address climate change, increase diversity and inclusion, and address social inequities.
Our new poll of Fortune 500 CEOs, however, has given me some second thoughts. Here’s the question we asked:
As you know, there has been significant political pushback against ESG and “woke” capitalism in the past year. Which of the following statements comes closest to reflecting your view of this development?
1. This was a useful correction. Environmental, social and governance (ESG) issues were unduly impacting business decisions.
2. This is an unfortunate development. Business leaders should be encouraged to take into account environmental, social and governance issues in their decision making.
The answers from CEOs were almost evenly split: 48% for No. 1 and 52% for No. 2. That suggests the attacks on ESG from the likes of Florida Gov. Ron DeSantis and the editors of The Wall Street Journal have found their mark. I suspect the 48% crowd is also expressing frustration that activists and regulators have overreached—attacking oil companies for increasing their production in response to the Russian invasion of Ukraine or proposing overly sweeping rules for reporting on “Scope 3” carbon emissions of suppliers and customers. And there’s certainly reason to argue that the acronym “ESG” is a confusing and bureaucratic framework for measuring social impact.
But none of this changes my view that the increased focus on social impact by corporations in recent years has been both a necessary and welcome development. It’s not driven mainly by political calculation or posturing, but rather by increased demands from employees, customers and investors that companies address the fundamental challenges of our society. And the best companies are increasingly finding that doing so is good for their business (and ultimately for their shareholders).
So watch this space. The political environment is certain to get noisier as the next election approaches. But the opportunity for companies to better demonstrate their value to society will grow as well. And my bet is the companies that do that best will be the ones that prevail.
We will release the rest of the results from the Fortune 500 CEO survey over the next few weeks.
More news below.
Gold miner Newmont is buying Australia-based Newcrest Mining for $17.5 billion. The acquisition would make Newmont—already the world's largest gold miner by output—even bigger, allowing it to produce almost twice as much as its closest rival. But Newmont is also interested in Newcrest’s operations in copper, a major component in electronic goods like EVs. The Wall Street Journal
A former ByteDance engineer accused the Chinese company of having a “culture of lawlessness” in a wrongful dismissal suit filed in California on Friday. Among the former employee’s claims is an allegation that the TikTok parent had a unit of Chinese Communist Party members to monitor its apps. U.S. politicians and security officials claim ByteDance can share U.S. personal data with Chinese officials—accusations the company denies. The New York Times
Voters in Turkey and Thailand went to the polls Sunday. Thai voters backed opposition parties, including the new Move Forward party run by businessman Pita Limjaroenrat, over military-backed parties. Turkey’s vote appears to be headed to a runoff as President Recep Tayyip Erdogan failed to achieve an outright majority.
AROUND THE WATERCOOLER
Duke Energy’s CEO says her entire business strategy rests on pivoting to cleaner energy: ‘This single issue is so significant to our company’ by Phil Wahba
The ‘karmic quality’ of Hindenburg’s war on Carl Icahn just took on a new cast. It’s not just shorting his stock anymore but his bonds, too by Will Daniel
‘It’s essentially a game of chicken.’ The debt limit standoff has no real winners and potentially one big loser: The U.S. economy by Tristan Bove
Google, Meta and other tech companies are cutting back on a prized Silicon Valley tradition: summer internships by Andrea Guzman and Kylie Robison
JPMorgan wants to be your landlord by Lance Lambert
Who is Linda Yaccarino, really? Former colleagues reveal the tough “Long Island lady” Elon Musk has chosen to run Twitter by Kylie Robison
I used ChatGPT to write a cover letter and pretty much fooled 3 experts—and an A.I. content detector by Chloe Berger
The housing market correction would regain new life if the U.S. defaults, says Moody’s chief economist by Lance Lambert
This edition of CEO Daily was curated by Nicholas Gordon.
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