Also: iPhones from India, BP CEO resigns, Airbus engines. 
Good morning, Peter Vanham here in Atlanta, Georgia.
Fortune’s Impact Initiative kicked off here yesterday amid a fragile economy and a political climate increasingly hostile toward environmental, social, and governance (ESG) initiatives.
It added up to a feeling that ESG as an acronym is on the backfoot or perhaps even headed for an “ESG winter,” where only the most material issues survive. It certainly led many of the executives here to be focused more on the bottom line of their work. Two stakeholders were mentioned most often as the north star in that quest: Employees and customers.
First consider employees. A company’s “path” on social issues is “clearest when turnover numbers get better,” said Chris Hagler, head of ESG at Independent Point Advisors. “Employee engagement is a leading indicator” of future growth, another participant said.
On sustainability, the key stakeholder is the customer. The good news, according to a Deloitte representative, is that “people are willing to pay for sustainability.” An added caveat is that “consumers don’t want to pay for advocacy.” (Deloitte sponsors this newsletter.)
When you consider those two insights, there doesn’t seem to be a whole lot of ideological controversy left. In fact, they align quite closely with two statements from someone who wasn’t at Impact Initiative (and is unlikely to be caught at any ESG-aligned conference), Charles G. Koch, chairman and CEO of Koch Industries. In his 2015 book Good Profits, Koch wrote:
“Giving all our employees the opportunity to realize their potential by empowering them in roles that fit their talent and passion is critical to both their success and the company’s. It also benefits everyone else.”
And:
“The only reason a business should exist (and the only way it can legitimately survive long term) is to create value in a responsible way. The best way to do that is to focus on creating value for others.”
Koch offered those comments long before the current controversy around ESG.
The takeaway? Perhaps it’s time for ESG to move beyond its label and go back to the basics of the role of business in society. Critics of ESG, meanwhile, may want to reread about the fundamentals of responsible business, as outlined by a libertarian such as Koch. The outcome may well be more common ground between the opposing sides than previously imagined—and an opportunity to deescalate the current controversy.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
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Made in India
Apple will sell India-made versions of its latest iPhone on launch day, reflecting the company’s continued investment in the South Asian country. Apple’s Indian manufacturing had previously lagged its China production by as much as nine months. Yet the U.S. tech company and its suppliers are expanding manufacturing in India to diversify the company's currently China-focused supply chain: Apple now sources 7% of its iPhones from India. Bloomberg
Not fully transparent
BP CEO Bernard Looney resigned Tuesday, with immediate effect, with the oil company’s board saying he “was not fully transparent” in disclosing past relationships with colleagues. CFO Murray Auchincloss will now lead BP on an interim basis. Looney was one of the oil industry’s strongest proponents of investing in green energy and scaling back fossil fuel production yet took flak in February for rolling back BP’s emissions targets. Bloomberg
Grounded
Airlines around the world are scrambling to determine the full extent of a manufacturing flaw in some of their Airbus jets. On Monday, aerospace supplier RTX Corp said it would need to check almost all of its Pratt & Whitney engines powering the Airbus A320, potentially grounding as many as 650 planes next year. Lufthansa, Air New Zealand, Scoot and Wizz Air are among the airlines warning of a hit to flight capacity. Reuters
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Productivity in the workplace As the workforce becomes more complex, productivity may no longer be the metric that matters most. According to Deloitte research, there are other measurements that leaders might consider when it comes to evaluating and prioritizing how humans perform. Read more.
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