Good morning.
No issue better illustrates how far the business community has moved on the American political spectrum than climate change. At the turn of the millenium, big business was in the vanguard of climate denial. But in the last decade, that has changed. While President Trump yesterday formally notified the UN that the U.S. was withdrawing from the Paris Accord, nearly every big company now has a serious carbon control effort in place.
“Everybody that I’ve talked to, with very few exceptions, accepts the fact that climate change is occurring,” Carlyle co-founder David Rubenstein said in a piece published yesterday, when asked how his business and finance colleagues view the issue. “Some subset of that group, maybe 15%, are not yet convinced that it’s man-made as opposed to naturally occurring. That means, therefore, at least from the people I’ve talked to, 85% of them believe that man-made factors are contributing to climate change and that something needs to be done about human behavior.”
That change has happened partly because business leaders are increasingly witnessing the impact of climate change on their businesses. And it has happened because some see an opportunity in producing products to help move toward a lower carbon economy. But the biggest reason for the change, I believe, has been pressure from employees. A new generation of workers is demanding the businesses they work for step up to the plate.
That employee activism is a good thing…until it’s not. Google employees demonstrated the downside yesterday with their petition demanding their company stop doing business with fossil fuel companies. Really? No realistic analysis I’ve seen shows humanity surviving the next fifty years without large helpings of oil and gas. What purpose is served by denying fuel producers technology that can make them more efficient?
By the way, in the interview cited above, Rubenstein said we are “probably in inning two of a nine inning game” with regard to business efforts to address environmental, social and governance (ESG) issues. That suggests business has a long way to go. But it also suggests it will continue to move in the same direction.
More news below.
Alan Murray
alan.murray@fortune.com
@alansmurray
TOP NEWS
SoftBank Cracks Down
SoftBank is trying to restore confidence in its big bets, after its backing of WeWork has drawn months of scrutiny. That means shoring up the corporate governance at some of the companies it backs and restrictions on dual-class shares, moves designed to restrict the nearly free reign enjoyed by some founders—like WeWork founder Adam Neumann, who departed his company with a $1.7 billion payout. FT
China Concessions
Concessions on U.S. trade tariffs on China could be coming: according to sources quoted by the FT, the White House may pull back 15% levies on $112 billion worth of Chinese imports. That could mark at least a pause in the escalating tit-for-tat trade war between the U.S. and China. But the U.S. will want something back in return: potentially greater IP protection, or assurances of a larger market for agricultural goods. FT
Iran Escalates
Iran on Monday announced it had launched a new batch of modernized centrifuges, capable of refining uranium 10 times faster, according to the head of the Atomic Energy Organization of Iran. It was another sign that the Iran nuclear accord designed to restrain the country's nuclear capabilities has broken down since the Trump administration reinstated sanctions. Iran also warned that it could escalate its capabilities further if the European countries still committed to the deal don't shield it from the economic cost of U.S. sanctions. Reuters
Collaborate or Isolate?
How concerned should the U.S. be about China's artificial intelligence capabilities? A U.S. government commission report released on Monday said the government needs to do more to fund A.I., and focused heavily on the progress in China, which aims to be a leader in the field by 2030. But rather than implementing visa and export controls, the report suggests the U.S. should collaborate with China to set standards for responsible A.I. use. Fortune
AROUND THE WATER COOLER
The Boeing Burn
The fall-out from the Boeing scandal drags on, and other than Boeing itself, the hardest hit by the grounding of the 737 MAX has frequently been budget carriers—like Ireland's RyanAir. The airline still had outstanding orders for 30 of the planes this summer; now that number has been cut to 20, and the company said it would cut its growth rate for the current year from 7% to 3%, as it expects it will carry 5 million fewer fliers. Fortune
The Diamond Surplus
It's not just oil: there's also an oversupply of diamonds. But years of thin profits for the middlemen traders in the diamond industry has finally pushed De Beers, the diamond giant and the industry's price setter, to cut prices for traders by 5%—though on the open market prices have fallen by 9%, according to an analyst. Fortune
Dominate or Ditch
That's Uber Eats' strategy: become one of the top two players for food delivery in a city—or get out. The aggressive playbook was unveiled as Uber was revealing the scale of its losses in its last quarterly earnings. It came short of analyst expectations for "gross bookings"—revenue before paying expenses for drivers and others—while the total loss for the unit grew 67% on-year to $316 million. Fortune
Big Beard Demand
As beards have become increasingly popular, so have men realized that getting a beard isn't always easy... or cheap. Products from pens to 'fill in' patchy spots, hair applicators and transplants, beard growth gummies, and even some DIY options (try eyeshadow!), have become more popular, and they've cut into the market for shaving, too: earlier this year, P&G admitted that 'shaving less' had undercut razor profits. WSJ
This edition of CEO Daily was edited by Katherine Dunn. Find previous editions here, and sign up for other Fortune newsletters here.
