Also: Tim Cook's pay cut, the mess at Southwest, and Frank fraud
Good morning, Peter Vanham here, filling in for Alan.
What are the global risks facing business leaders in the new year? It’s a question the World Economic Forum attempts to answer each year ahead of its annual meeting. And with “Davos” starting next week, the Swiss organization on Wednesday revealed its 2023 risk survey results. (Disclosure: I’m a former WEF employee.)
It won’t surprise anyone that the “costs of living crisis” and “geo-economic confrontation” top the list of short-term risks in the Davos crystal ball, alongside natural disasters and extreme weather events. Predictions about the future are hard to make, after all, so people revert to the risks they know.
But looking a decade ahead, the worry of the Davos crowd turns to what you could call “persistent ESG concerns:” a failure of climate change mitigation and adaptation, biodiversity loss, natural resource crises, large-scale involuntary migration, erosion of social cohesion and societal polarization, notably.
It may be hard to fathom, now, but this focus on ESG risks wasn’t always there. Until the early 2010s, more conventional economic risks such as oil prices, stock market collapses, and a China slowdown (ironically all risks that actually materialized in 2022) preoccupied the Davos luminaries more.
But over the past decade, worries over “E” and “S” risks grew among global business leaders, and that trend shows no sign of abating, as the WEF’s 2023 report shows. It begs the question: was last year’s ESG backlash a partisan, politically-motivated, and mostly American fad?
Without venturing into that minefield, the WEF’s Saadia Zahidi told me that the persistence of ESG risks is a sign that “ESG has to remain front and center for companies that want to help address and mitigate some of these concerns, whether on environmental or social side.”
Nevertheless, the term ESG seems to have become a “no go zone” for even my former colleagues. In the Davos agenda for next week, filled with hundreds of sessions, the term ESG is mentioned only … once. The winner of the Davos agenda bingo? “Climate,” mentioned more than 100 times.
CEO Daily is off for Martin Luther King Jr. Day on Monday and will be back in your inbox on Tuesday.
More news below.
Peter Vanham
@petervanham
Peter.vanham@fortune.com
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Tim Cook pay cut
Apple is slashing CEO Tim Cook's compensation by more than 40% to $49 million after investor guidance and a request from Cook himself to adjust his pay. This year and going forward, 75% of the stock units awarded to Cook will be performance-based, up from 50%. Bloomberg
Southwest mess
Southwest Chief Executive Bob Jordan is taking responsibility for the airline's meltdown last month that led to the cancellation of 16,000 flights and stranded thousands of passengers. "There are a lot of reasons that this happened, but it's on me at the end of the day," says Jordan. Southwest's board has set up a special committee to oversee company management following the debacle. Reuters
JPMorgan suit
In September 2021, JPMorgan Chase paid $175 million to acquire Frank, a fintech startup geared at streamlining college students' financial aid. Now the bank is suing Frank founder Charlie Javice, claiming the startup invented nearly all of its 4.3 million customers. A lawyer for Javice says the lawsuit is "nothing but a cover" for the bank's dealmaking mistakes. Fortune
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Ethical Technology Companies may want to gain a competitive advantage from emerging technology, but at what cost? Deloitte’s inaugural State of Ethics and Trust in Technology report dives into how ethical principles are currently being applied to emerging tech. Explore the findings here.
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