Also: Israel-Hamas escalation, Fed 'won't hesitate,' trading via USB stick. 
Good morning.
There’s ample evidence that the political backlash against ESG is affecting businesses, both in terms of how they talk about social issues as well as what they actually do to address them. But I continue to find myself in conversations like the one we held earlier this week, in partnership with Deloitte (which sponsors this newsletter), where CEOs insist that defining a purpose beyond profit is more important today than ever.
Our conversation began with Deloitte’s Jason Girzadas laying out the results of our latest CEO poll and noting that 48% of the respondents expressed a view of the global economy that is “increasingly pessimistic to very pessimistic.” That reflects concerns about inflation, geopolitics, rising regulation, and what he termed a “VUCA” environment—characterized by volatility, uncertainty, complexity and ambiguity. Many of the participating CEOs argued that a clear sense of purpose is what allows them to forge a path through the confusion. Some excerpts:
“Purpose-driven leadership has always been important. It has become essential due to VUCA, and more importantly for me, the speed at which things are changing. That puts enormous mental pressure on everyone. And that’s why I believe today, more than in the past, people look for a purpose—something that is stable, something they believe in, something meaningful. We have to move from being a business person…to making business human.”
—Alexis Garcin, CEO, Michelin North America
“One of our core values is to be human first. And we tie a lot to that.”
—Jonathan Poma, CEO, Loop
“ESG has gotten a bad name. But when I talk to folks, I talk about a sustainable future for all of our stakeholders starting with employees, and that’s a really important group in the current mix…I don’t know if there is leadership without purpose anymore.”
—Mark Newman, CEO, Chemours
“You can kind of get caught up in the politics, but if you can’t make the North Star be your employees and your customers, and you can’t think of them in an empathetic framework… Yes, there is a sort of ESG fatigue. But I just had an all-hands with my team saying ‘We’re still committed. We’re not changing.’ They need that.”
—Tony Bates, CEO, Genesys
“Everything starts with purpose. If that is confused with ESG, then our starting point is unclear and that flows through the organization.”
—Kunaal Patawari, CEO, Geminicorp Recycling
“I believe strongly that purpose is not ESG or diversity. And as leaders we can’t let purpose get rebranded into woke capitalism. People are craving meaning and clarity. And that’s our job as leaders.”
—Jeff Jones, CEO, H&R Block
“Of the Fortune 100 companies, only 56 have actually articulated what can be called a purpose or a mission.”
—Janeen Gelbart, CEO, Indiggo
“Trust in CEOs has plunged because it is seen as all hat and no cattle… The idea that we can talk and not do is over. The idea that we can have purpose through promises is over. Because it is going to require action to build trust.”
—Richard Edelman, CEO, Edelman
“In so many cases there has been a failure to define (the company’s) values. And it is going to become very complicated. I know right now many companies are challenged by, ‘Do we weigh in on what’s happening in Israel and the Palestinian conflict?’ There was the same challenge with respect to Ukraine. And some employees are saying: ‘Why didn’t you weigh in on what happened in Congo? What’s happened in Rwanda? Why is that?’”
—Alphonso David, CEO, Global Black Economic Forum
“There is a massive transfer of wealth going on right now. $84 trillion in assets is going to transfer over the next 20 years from baby boomers, the silent generation, to the next two generations. Fifty percent of them count themselves as non-white. One in four or one in five count themselves as part of the LGBT community. So as wealth managers who want to find out what’s important to people about their family, about their values, about their purpose, we have to be culturally aware.”
—Penny Pennington, Managing Partner, Edward Jones
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Iran says escalation of Israel-Hamas war ‘inevitable’
Iranian foreign minister Hossein Amir-Abdollahian suggested Thursday night that an escalation of the conflict between Israel and Hamas was unavoidable. “Due to the expansion of the intensity of the war against Gaza's civilian residents, expansion of the scope of the war has become inevitable,” he said, according to Iranian state-run network Press TV. Reuters
Fed ‘will not hesitate’ to hike rates if necessary
Federal Reserve chair Jerome Powell said on Thursday that the central bank “will not hesitate” to tighten its policy further if needed. “We will continue to move carefully, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening,” he said ahead of a panel discussion at an IMF conference in Washington. Bloomberg
World’s biggest bank trading via USB stick
The U.S. arm of Industrial & Commercial Bank of China Ltd.—the world’s biggest bank—was hit by a cyberattack this week, leaving the lender reliant on outdated technology to complete Treasury trades. According to Bloomberg, ICBC was forced to trade via USB stick, sending a messenger to carry the stick so transactions could be settled on time. Bloomberg
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Holiday Travel Clear for Takeoff Travel spend is up, and 48% of Americans intend to travel between Thanksgiving and mid-January this year according to Deloitte’s 2023 Holiday Travel Survey. What impact will this holiday season have on the travel industry? Read more here.
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