Also: Disney cuts, Credit Suisse, and Starlink's limits.
Good morning.
I sat down with BP CEO Bernard Looney yesterday—one day after he reported record profits and also revealed his company would no longer meet its pledge to reduce oil production and carbon emissions by 40% in 2030. He was drubbed in the press for what was called a “rollback of climate targets” (Fortune), “dialing back elements of [his] high-profile push into renewable energy” (WSJ), and a “significant U turn” (FT). I asked: Can society really count on profit-seeking companies like his to get us to net zero by 2050? His answer:
“There are two things that need to happen in this world. Number one, we need to accelerate the energy transition. And number two, that transition needs to be orderly. It needs to be orderly, because if it’s not, supply and demand get out of whack, you get what happened last year. Prices will skyrocket, and people around the world will be dealing with a cost-of-living crisis. We’re doing both—accelerating the energy transition, and ensuring the transition is an orderly one.
“In 2019, we spent 3% of our investment outside of oil and gas. Last year, we spent 30%. We went from 3% to 30% in three years…That number will be 40% in two-years’ time. That number will be 50% in 2030.
“We’re also investing in today’s energy system, which is an oil and gas system, so that we can make sure that people have the energy that they need at their fingertips, and to help make sure that it’s as affordable as possible.”
I asked him what it will take to convince a skeptical public—and media—that the company is serious in its intentions to drive the transition to a net zero economy.
“People will not judge us on our words, they will judge us on our actions… People will believe us when they see us building out solar facilities, when they see us building out hydrogen, when they see us buying (biogas producer) Archea for $4 billion… While I understand that people are skeptical, I would encourage people to look at the facts.”
You can listen to Ellen McGirt’s and my interview with Looney next week on our podcast Leadership Next, on Apple or Spotify. It’s worth listening to: he is a passionate advocate, and talked revealingly about the roots of that passion in his personal history. In the meantime, check out our interview with social entrepreneur Wemimo Abbey, who grew up in the slums of Lagos, Nigeria, and founded a unicorn company, Esusu, that helps people build credit scores by recording their rent payments.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Disney cuts
With Bob Iger back in charge, Disney is about to engage in a major restructuring, with 7,000 jobs going in an effort to reduce costs by $5.5 billion. With activist investor Nelson Peltz hassling the board, Iger is under pressure to make the Disney+ streaming service turn a profit, and Disney will now “re-establish the direct link between content decisions and financial performance,” he said. Shares rose 5.7% in after-hours trading. Fortune
Credit Suisse
Credit Suisse shares fell as much as 7% this morning after the Swiss bank reported a $1.5 billion quarterly loss—its worst since the 2008 Financial Crisis. Social media rumors about Credit Suisse’s financial health led some customers to withdraw their funds in the last quarter of 2022, and analysts have been surprised by the amount of outflows. Restructuring costs will mean more losses this year, the bank warned. Financial Times
Starlink’s limits
Elon Musk’s SpaceX has limited Ukraine’s ability to use the company’s Starlink satellite-communications dishes for targeting Russian positions with drones. It’s unclear what exact steps SpaceX has taken to do this, but president Gwynne Shotwell said the systems—donated early in the war—were “never meant to be weaponized,” and were only supposed to be used for communications. BBC
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Board Composition: Recruitment Practices and Priorities What are boards prioritizing when recruiting new directors? New research from Deloitte and the Society for Corporate Governance reveals a desire for greater diversity followed by orderly/planned succession. Explore the findings here.
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