Good morning.
As the year ends, I’ll attempt to summarize in 300 words the dozens of conversations I’ve had with CEOs over the last 12 months about the changing role of businesses in society. My takeaways:
—Despite political pushback and rising recession threats, “stakeholder capitalism”—particularly when it comes to the environment and DEI—is very much alive and well, especially at the largest companies, like those in the Fortune 500. The main reasons? 1) Talent remains a top challenge for CEOs, and forward-leaning policies on climate and diversity help them recruit and retain top talent. 2) Climate, in particular, has become embedded in their strategies, and is now seen not just as a “nice to have,” but as a necessary driver of future growth.
—The political pushback against “woke CEOs” has had an effect, but more on what CEOs say, less on what companies do. Most large companies have, over the last year or two, instituted new procedures to vet controversial social and political issues and decide if it is appropriate to speak out. More often than not, the answer is "no.” No one wants to be the next Disney, and no CEO relishes being pilloried by the governors of Florida and Texas or the editors of the Wall Street Journal.
—The SEC’s effort to require reporting on climate was a necessary step, but it became a counterproductive overreach, particularly with regard to so-called “Scope 3” emissions of a company’s suppliers and customers. It would have been better if the SEC had had a civil conversation with business groups about how to implement—but today’s Democrats consider that de facto corruption.
—Even so, many companies continue to address Scope 3 emissions, with Walmart’s Project Gigaton, now covering more than 4,000 of its suppliers, a leading but not unique example.
In short, the trends and forces I document in my book Tomorrow’s Capitalist—which was sent to the printer before this year began—remain largely intact. Business is changing, with an enhanced focus on people and planet. The changes may not go as far or as fast as some would like. And they may be going too fast and too far for others. But it is happening, and it will likely continue.
For my money, that’s reason to be optimistic about the New Year.
Alan Murray
@alansmurray
alan.murray@fortune.com
