Also: IRS reform, Spotify layoffs, and Citadel success.
Good Monday morning.
While the political pushback to ESG continues to grow in the U.S., there was little sign in Davos last week that business leaders are pulling back on their commitments, particularly on climate. At our CEO dinner on Thursday night, Coca-Cola CEO James Quincey put it this way, and won applause from his fellow CEOs:
“If ESG becomes toxic as a phrase, which it basically has in the U.S., it doesn’t matter to me. I’m just going to stop saying ‘ESG.’ But the idea that for my basic product, I want to be water positive, I want to have a circular economy on my packaging, and I want to grow our business with less sugar—you can call it anything you like, but no one with common sense says those are bad ideas.
“My business strategy is constant and clear and centered around the business and the things that consumers care about and that fix societal problems. If people want to attach labels to it, that’s their issue. I’m saying this business will be great if I fix these problems, and it will be good for shareholders and be good for society.”
Novartis CEO Vas Narasimhan had this to say on the topic:
“The reasons corporations exist at all is because we believe the profit motive enables us to advance society and solve problems. In the end, for all of us, we have to be super clear on the purpose and mission of our individual enterprises, be super clear that when we deliver that purpose and mission we actually do the biggest thing for ESG, forgetting all that ESG rating stuff. It doesn’t matter. If we actually deliver on our mission in a sustainable way, that’s why our corporations exist. And if we can articulate that clearly over time to our people and the public, I hope we can win back the narrative. Because the whole reason that we have this ESG industrial complex is because we have a little bit lost the narrative. In my company, the best thing we can do is find medicines and give them to people all over the world. That’s the best thing we can do, forgetting all the other stuff. And I’m sure that’s true for all the other companies in the room.”
And in case you missed it, here’s what JPMorgan CEO Jamie Dimon had to say in Davos about the risks of the war in Ukraine. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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IRS reform
U.S. Treasury Secretary Janet Yellen will prioritize reforms of the Internal Revenue Service over the next couple years. Yellen recently won the extra funding she wanted to deal with the tax agency’s “huge backlog” and personnel shortage, and now she says the IRS “needs to be completely redone.” The Republicans who now control the House are markedly less keen on beefing up the IRS’s enforcement capacity. Reuters
Spotify layoffs
Spotify is the latest tech firm to be planning layoffs, according to a Bloomberg report. The audio streamer has nearly 10,000 employees, and it’s not yet clear how many would be affected. Spotify’s investors have been antsy about seeing returns on the firm’s massive podcasting investment. Fortune
Citadel success
Ken Griffin’s Citadel is now the most successful hedge fund ever, according to LCH Investments estimates. Citadel made $16 billion in profit for its clients in 2022, beating John Paulson’s $15 billion haul in 2007 (which was made betting against subprime mortgages.) Overall, the top 20 hedge funds generated $22.4 billion in profit after fees last year. Fortune
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