fortune--2020-08-22--Frances Frei: It’s OK that companies aren’t talking about Black Lives Matter—as long as they’re maki

Frances Frei: It’s OK that companies aren’t talking about Black Lives Matter—as long as they’re making progress in private

Frances Frei knows how to fix a problematic corporate culture. The Harvard Business School professor of service management was called in by Uber in 2017 to address a work environment rife with sexism; Frei says her team turned things around at the troubled ride-sharing giant in nine months.
After a national reckoning over racism in American society, including in the workplace, even companies that haven’t suffered crises as acute as Uber’s are eager to examine where their cultures fall short. Frei, with leadership coach Anne Morriss, is co-author of the June book Unleashed: The Unapologetic Leader’s Guide to Empowering Everyone Around You. In the book, the pair teach readers how to lead while they’re in the room and when they’re not—which is when an organization’s culture steps in to fill the vacuum.
“We have to train people, educate people, and inspire people to be awesome in our presence and have that awesomeness continue in our absence,” she says. “Culture is a really good tool for what works in our absence.”
Frei spoke to Fortune about how companies can apply the leadership principles she has developed to the dual crises of the present moment—efforts that should pay off soon. “Meaningful change,” she says, “happens quickly.” This interview has been edited and condensed.
Fortune: Many companies are now confronting longstanding problems around racial injustice in their workplaces. What lessons does your work offer them?
Frances Frei: Being inclusive of diversity is the missing ingredient. We might have people that are underrepresented and if we are thoroughly inclusive of those folks—if they thrive just as much as everyone else—then we’ll begin to make a lot of progress. The mistake we’ve been making is we think about diversity first and inclusion second, and I would flip that. If we learn how to be inclusive of people, then we will be a magnificent place for diverse perspectives.
What lessons does your work at Uber specifically offer to companies trying to overhaul their corporate cultures?
What we found at Uber was that almost all complaints had something to do with an interaction with someone’s manager. There were 3,000 managers when I got there, so there were either going to be 3,000 bad people or 3,000 people that had not received an appropriate education. It was the latter. People aren’t born knowing how to manage, and I believe deeply in the power of education. In that education I would have a heavy dose of management education and leadership education. As part of that I would talk about inclusion and diversity.
Why was the management interaction the place where these problems emerged?
I got called in after the Susan Fowler blog. If you read that heart-wrenching blog she wrote, you’ll hate everything about her experience. Then if you read it again, you’ll hate it, and you’ll realize that these were management challenges. She reported to someone, that person thought they were reporting it up the chain of command, but the organization didn’t have a well-functioning people structure. You can think, how dare they? But their situation was that you get hired as an individual contributor; then something like five minutes later you’d be promoted to a manager because of hypergrowth. Something like five minutes after that you’re a manager of managers. Companies that experience hypergrowth—[don’t have] the basics that are occurring at other organizations.
What role do corporations have to play in racial justice movement?
We will get greater success more quickly if companies play the largest role. There are three steps you have to go through. We need a new lens on our glasses. We all have to see racial injustice as: Oh my gosh. This has been going on for 400 years. Even if we all would have passed the test before, we need to see it in a visceral way. The seeing is step one.
Step two is standing, walking, and talking. Once we see the racial injustice, it’s important that we stand next to it—if it’s the Black Lives Matter movement, that we stand next to Black people, in all the physical and spiritual ways. That we walk—or in some cases march—with Black people. And talking—we start talking with Black people differently, and we start talking to people who aren’t Black about race.
But here’s really what companies can do. Companies can look at their performance along hiring, development, promotion, and retention. It’s as simple as that. If Black people are thriving in terms of being hired, developed, promoted, retained the same as people who aren’t Black, you’re doing great. But if there are gaps—when that is closed, then you get to celebrate.
I don’t want too many participation trophies. I really want credit for actual justice. And justice to me will be when we have similar promotion rates, when we provide informal development to Black people at the same rate we provide informal development to people that aren’t Black, etc.
We’re at a point when companies are no longer issuing statements about Black Lives Matter or responding to the day-to-day news. How should employees, leaders, and other stakeholders ensure that these pushes for change don’t get left behind as public pressure lessens?
I don’t mind if they’re not talking as long as they’re busy at work improving things. We should be able to see progress. At Uber, we turned things around in nine months—and Uber had a lot of problems. I find meaningful change happens quickly. Right now I want to see progress on justice. I would love it if that’s what everyone is working hard on.
Now, if we’re not making improvements in the performance and we’re not talking about it, then it’s up to employees and community members and stakeholders and, as a matter of last resort, Congressional hearings. The world is paying attention right now, so if people aren’t working toward progress, we should definitely bring the attention to them. If less talking means they’ve graduated to this third phase of justice, I consider it progress. But we should be able to see progress very quickly.
Do you think that progress is happening internally right now?
I’m very optimistic. As one measure, before, if I wasn’t bringing up race, race wasn’t being brought up. Now it comes up in every senior-level conversation I have. What’s beautiful is it comes up with a growth mindset—I want to learn about it—and not a fixed mindset: I already know it.
I’ve never seen so much attention put on it, and I’ve been looking at these companies for a long time. Every board of directors in the world has been paying attention to the strategy of the company they’re on the board of directors for. It’s only recently that practically every board of directors in the world is also paying attention to the culture. And to racial justice. Only in the presence of momentum do we let up. But what I see so far is very optimistic.
In recent months, several white female leaders have been called out for racist behavior. What do white women need to change about their behavior in the workplace?
Gender and sexism—it isn’t only men doing it to women. Men and women had a women’s problem for a long time. White women might have had a fixed mindset—as opposed to a growth mindset—according to race. Having had the experience of sexism, we would think it bridges naturally to racism. I don’t think it does. To the extent white women aren’t doing as good a job, I would think, what can I learn about race and how might I be contributing to the racial problem? If we do it with an open mind, holy cow, do I think it will be awesome. I can imagine some people might think, ah, I’ve experienced an -ism, so I get it. I think gender does not port over to race.
What should companies be doing right now to support working mothers through the coronavirus crisis?
One of the things we teach working moms is: if you’re going to be great at some things, you have to be bad at others. If you’re going to be great at work and great at home, you’re probably not going to be as good of a daughter, sister, on the PTA. You could be average at all those things—but if you want excellence in some, to be disproportionately good at some, it’s going to come at the cost of being disproportionately bad at others.
What’s really concerning about what’s going on right now is that primary caregivers, which are often moms—everything is falling to them. Before you didn’t know if you should be overly devoted to the PTA—and now you are the teacher.
If companies can support moms right now, they will become the winning companies in the future. The first thing we should do is take away all the wasted time mothers have to endure. If we make meetings faster and better, that will help moms. Now would be a great time to say to moms, what is it about your job that you’re doing that’s not totally developing you as a leader—can I take that off your plate? If we can curate the work moms are doing, and remove all of the inefficiency, that’s the only chance we have. Otherwise moms are going to become more and more exhausted, and they’re going to become more and more in need of an oxygen mask.
[As a company] I would do everything I can now to be a great place for moms, and I would think really hard that that’s what my competitors are doing.
How do the leadership themes your book assigns—presence and absence, love and trust—apply to this current moment?
Leaders can’t be in the room all the time. Our job as a leader is to make others better, first when we’re there. We have to train people, educate people, and inspire people to be awesome in our presence and have that awesomeness continue in our absence. Culture is a really good tool for what works in our absence.
Where inclusion and belonging come in are how do I do this for a group of people all at once—particularly as groups become more different than I am. If people are just like me, I can practice the Golden Rule: treat people as I would want to be treated. Actually, not very good advice. I should treat people how they want to be treated. If they’re just like me, it will likely overlap. But I’m not treating them that way because it’s how I want to be treated, I’m treating them that way because it’s how they want to be treated.
There are a whole bunch of things we do naturally, that we need to undo.
In our experience, what’s getting in the way looks like boulders, but actually it can be the size of pebbles. Our job is to equip people with the brooms to sweep away the pebbles. I’m not saying that race is a small problem, but I am saying race can be solved just like we solve all the rest of the problems. With dignity, with deep diagnosis, and making it a super top priority.


fortune--2020-08-22--Who is Dave Clark, the new chief of Amazon’s giant retail business?

PepsiCo CEO : ‘ Black Lives Matter , to our company and to me.
’ What the food and beverage @ @ @ @

Amazon’s new retail chief, Dave Clark, has an unusual nickname: the Sniper.
Underlings gave Clark, who has worked at Amazon during almost all of his career, that moniker after he told them that early in his tenure he would hide in the shadows at warehouses seeking to catch lazy workers slacking off who he could fire.
Clark, 47, has come a long way since those days as a lurker. Amazon announced on Friday that he will replace Jeff Wilke, one of the most trusted lieutenants of Amazon founder Jeff Bezos, when he retires early next year. The news surprised some analysts, who thought Wilke might be in line to run the whole company if Bezos ever left. Now it will be Clark, who helped build Amazon’s massive warehouse and delivery network, who is one step away from the top job.
Shares of Amazon, which had been up 78% this year, lost less than 1% on Friday.
“Those of you who have worked with Dave know his incredible passion for serving customers and supporting our employees,” Bezos said in an email to employees announcing the change. “I am excited for him to lead our teams and continue innovating for customers.”
Amazon said no executives were available for an interview on Friday.
Clark grew up in Georgia and Florida and got early exposure to life in the retail business working in his parents’ carpet store (where he liked to drive the forklift) as well as at a Publix Supermarket and a Service Merchandise store during high school.
But in college at Auburn University, he studied music and played the tuba and baritone sax. After graduating, he spent a year as a junior high music teacher before heading to business school at the University of Tennessee where he studied logistics and transportation.
The experience as a music teacher still comes in handy, Clark has said. “I often tell people I learned everything there is to learn about leading people from 250 seventh graders,” Clark said in an interview with Auburn’s alumni association in 2017. “Once you’ve taught 250 seventh graders to play instruments in unison, everything else is pretty straightforward.”
While Clark was going to business school in Tennessee, then scrappy startup online book seller Amazon was exploring the state for the location of one of its first warehouses. The company’s head of operations visited Clark’s class and the MBA student impressed the exec as part of a team presenting on improving warehouse schematics.
Graduating from business school in 1999 at the height of the Internet bubble, the next step was obvious. The day after graduation, he flew to Seattle and started in Amazon’s “Pathways” leadership development program. He’s been with the company ever since.
It’s quite a different path to Amazon than that of Jeff Wilke, 53, the man Clark is replacing.
Wilke grew up in Pittsburg, where he loved to tinker with computers and write software code. He attended Princeton University, majoring in chemical engineering, before getting an MBA from MIT. Though Wilke joined Amazon the same year as Clark, 1999, he had already had a varied career including writing software at Andersen Consulting and as a vice president and general manager of pharmaceutical fine chemicals at AlliedSignal.
Despite the lack of Wilke or Bezos’s Ivy League pedigree, Clark quickly moved up the ranks of Amazon’s logistics operation, from being the operations manager of a fulfillment center in Kentucky in 2001 to general manager of all Northeast warehouses in 2003. By 2010, he was vice president of North American operations and in 2013 was promoted to his current job, senior vice president of worldwide operations.
That same year, Clark gave President Barack Obama a tour of a giant Amazon warehouse in Chattanooga. But he also stopped to give workers a pep talk. “It’s work you do which makes this possible,” he told them.
Clark has been in charge of Amazon’s entire supply chain, delivery, and customer service. Amazon’s stores and its Prime membership program also fall under his purview. He was a big proponent of Amazon’s $775 million acquisition of warehouse robot maker Kiva in 2012 and helped Amazon create its own air delivery network in 2016.
While those areas have experienced tremendous growth under Clark, they have also had challenges.
Reports have criticized unsafe working conditions in Amazon warehouses and some workers in Minneapolis even went on strike on Prime Day last year. But after John Oliver, host of HBO’s Last Week Tonight show, highlighted warehouse problems last year, Clark shot back on Twitter, where he frequently defends the company’s reputation. Oliver was “wrong on Amazon” which offers a “safe, quality work environment in our facilities,” he tweeted.


fortune--2020-08-23--‘There’s going to be a selloff in the stock market’ if Congress doesn’t pass more stimulus

If you’ve watched the stock market mount its breathtaking recovery over the past few months even as the country languished in a pandemic and recession, it might be easy to think, Nothing can stop this rally. Well, it looks like Congress could.
The $2.2 trillion fiscal stimulus package passed by Congress in March, which helped nourish a 51% trough-to-peak rebound in the S&P 500 and prevented a deeper economic crisis, has largely dried up. And economists and analysts tell Fortune it’s critical to pass more stimulus (and soon); otherwise another stock market correction and economic contraction could be looming.
Negotiations for another round of massive stimulus are stuck in a political stalemate: Democratic leaders haven’t come down from their ask of $3.4 trillion, and the White House won’t budge on its offer of around $1 trillion. The parties are in disagreement on items including a steep increase in federal aid to state and local governments, which Democrats support, and COVID-19 lawsuit immunity for businesses, which Republicans support. And with both the House and Senate on recess, a stimulus deal before September looks unlikely.
Yet analysts argue that stock markets have already largely priced in continued stimulus support from Capitol Hill and the Federal Reserve.
“A lot of the market rebound is based on the premise of continued stimulus,” Edward Jones’ Nela Richardson recently told Fortune. On the flip side, she notes, “if there’s a hole in that argument for the markets, you might see a pullback or more volatility.”
Indeed, when the CARES Act was passed back in March, things were grim, and U.S. stocks had just registered the fastest bear market on record. But the urgency lawmakers felt back in March doesn’t seem to endure now, despite underlying data that shows continued signs of suffering.
To put the contrast in perspective: When the 96-0 CARES Act vote in the Senate came, the S&P 500 was trading below the 2,500-mark. Now, as Congress debates a new round of stimulus in August, the S&P 500 has not only reclaimed its pre-pandemic highs, but booked new all-time records over the past week.
At those levels, “some lawmakers are … taking some solace in the stock market and certainly the President is,” argues Mark Zandi, chief economist at Moody’s Analytics. “And that is a huge error because the market is taking its cues from lawmakers expecting them to pass a rescue package.”
And therein lies the Catch-22: “Every forecaster that does this for a living on Wall Street is expecting $1.5 trillion to $2 trillion in fiscal rescue,” Zandi asserts. “If that doesn’t happen, and the odds of that happening continue to decline, there’s going to be a selloff in the stock market.”
How big of a selloff?
Dan Ives, managing director of equity research at Wedbush Securities, tells Fortune he expects a 5% to 10% correction in the stock market if Congress fails to pass more stimulus in the next month. Ives says the macroeconomic picture is getting choppy, and without more stimulus, the party is going to stop. “The soap opera in the Beltway is a major speed bump in the rally we’re seeing,” Ives says.
But if Congress does come through with stimulus of around $2 trillion, the market could take off again, Ives suggests. “A stimulus of that magnitude [over $2 trillion] would tack on a 15% to 20% rally, especially in tech stocks,” Ives estimates. But he adds: “This is a fork in the road moment: This market is either going to correct or go higher.”


fortune--2020-08-23--The pandemic problem tech can’t solve: Physical touch

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Gail Sideman can’t remember the last time she hugged a loved one. She only knows it was likely a few months ago. Since the outbreak of the coronavirus, the Milwaukee, Wisconsin resident says she’s stayed away from most people, resorting to “air hugs” when she’s seen her 20-year-old niece at a distance. The publicist and stage manager halted her personal and professional travel and hunkered down at home in March, only leaving to go to the gym, grocery store, or get some time outdoors.
“I’m a hugger and a physical person,” she said. “You definitely miss that.”
Sideman is one of the more than 34 million U.S. residents that live alone, according to latest numbers provided by the U.S. Census in 2018. Following the implementation of shelter-in-place and social distancing orders from cities across the nation, people living alone are experiencing a very different reality than the other 72% of people who live with family, roommates, or significant others. For people who been alone for about six months, the experience can be simplified to one word: isolating.
“I have to block those kinds of things out of my mind otherwise I wouldn’t get anything done,” Sideman said about her emotions. “But it does hit you at weird times—the loneliness, the isolation.”
Mental health experts say too much isolation can lead to a host of issues: depression, anxiety, post traumatic distress order. And as the pandemic has dragged on, keeping many people at home alone, mental health concerns are growing. The good news is there are ways to mitigate the negative effects of isolation partially thanks to technology. The bad news is for some people, those solutions may not be enough.
David Spiegel, a Stanford University School of Medicine professor and director of the school’s Center on Stress and Health, said that physical touch often has soothing effects, as it lowers the stress hormone cortisol that can weaken the immune system. Touch also increases levels of serotonin, dopamine, and oxytocin—the hormones related to happiness. Just like a child often needs to be held to be soothed, adults often need human touch to be reassured. At a time when adults might be more stressed than normal, given the global pandemic, people who live alone are going without that reassurance.
“Let’s just be realistic: it’s a real loss. It’s a real need,” Spiegel said. “We’re social creatures, and our most intimate connections are physical.”
Isolation can be especially harmful for people with a history of substance abuse, mental illness, or trauma, mental experts say. For those people, being alone for extended periods of time can magnify or rehash old problems. And the effects may extend well beyond the end of the pandemic.
The pandemic’s mental health repercussions is an issue with which Dr. Elinore McCance-Katz, the head of the Substance Abuse and Mental Health Services Administration within the U.S. Department of Health and Human Services, has been particularly concerned. Last week, the Centers for Disease Control and Prevention (CDC) reported that about 40% of 5,470 adults surveyed said they were feeling adverse mental effects related to the pandemic and physical distancing, including anxiety and depression. The report also said that about twice as many people reported suicidal thoughts within a month’s time compared to the number of people who reported feeling that way during an entire year in 2018. Following the report, McCance-Katz released a statement, calling the findings “troubling but not surprising.”
“People who experience stress that’s unrelenting are at great risk for mental health problems,” she told Fortune. “And we know suicide attempts have gone up, and drug overdoses are up.”
But even people who are relatively healthy might find themselves grappling with the lack of in-person social interaction. Carlyn Mumm has been quarantining alone in Dallas for the past six months. The 32-year-old digital strategist said given that she’s not a touchy-feely person, she doesn’t really miss hugs or handshakes. Even so, she says she feels a loss.
“There’s a certain level of authenticity and ease you get that’s lost in a digital space,” she said. “It’s the lack of unspoken cues and the rigor that tech communication requires you to follow especially in large groups.”
Mumm said she misses the eye contact she might make with someone across the table—something that’s impossible to do in a virtual space. She said that because video chatting only allows for one person to speak and be heard at a time, it eliminates the possibility of spirited interruptions and side conversations. Tech solutions like Zoom and Google Meet just don’t feel the same, she said.
Though the nation’s health authorities continue to advise people from different households to maintain their distance, there are things people who live alone can do to stimulate the happy hormones that come from physical touch. And if people who live alone regularly engage in those activities, they may be able to offset the negative effects of isolation, said Tiffany Field, director of the Touch Research Institute at the University of Miami School of Medicine who’s been studying the effects of the lockdowns during the pandemic.
“It’s vital to have our skin stimulated,” she said. “You’re going to save natural killer cells that kill bacteria and cancer cells.”
There are simple solutions: Self-massages, yoga, or even running or walking can stimulate pressure sensors that can set off a chain of events to change a person’s brain waves, blood pressure, and neurotransmitters, Field said.
Aline Zoldbrod, a Boston psychologist and sex therapist, says there are also tapping techniques, like a butterfly hug, people can perform on themselves to self-soothe. She also suggests using weighted blankets to create pressure on the body and thinking about previous hugs or reassuring touches to improve one’s emotional state. “You should be touching your own body,” she said.
For Gail, talking openly with her friends and colleagues about what she’s been experiencing has helped. But she says she’s eager for the day when she can hug her family and friends again.


fortune--2020-08-23--How to turn down a wedding invitation during the coronavirus pandemic

The coronavirus pandemic caused Katelyn Stanis to reschedule her wedding not once, but twice.
“I cried for about an hour when we officially decided to change the date, but then I went into re-planning mode and felt a sense of relief. Now, I had a concrete plan, even if it was different than the original one,” Stanis explained. “Third time’s a charm, right?”
Each time she communicated with guests, she says, they were extremely understanding. Some texted to say they were impressed with the decision. Others shared their excitement via email. All that worry about how her loved ones would feel was met with understanding and acceptance––and the same would be true, she says, if roles were reversed.
Couples are aware of just how hard it is to attend weddings during the pandemic, no matter how much guests want to be there for the big day. Wedding etiquette right now comes down to how couples can prioritize not only their health, but also the health and safety of their loved ones. That means honoring guests’ concerns about their health.
Still, it’s not easy for wedding guests to RSVP no. Tell help you find the words, Fortune spoke to wedding experts like Stanis for ways to let couples know you won’t be able to make it.
Short and sweet
In addition to being a part of the strange club of 2020 brides, Stanis knows what it’s like to be on both sides of the bridal party––after all, she’s a professional wedding vow and speechwriter. She recommends still sending a wedding gift and a thoughtfully written card that explains why you’re RSVP’ing no.
Here’s an example: “Congratulations Nick and Alex! We are so happy for you both. Unfortunately, our family does not feel comfortable attending an event during these unprecedented times. Sending our love and best wishes to you both as you start your new life together.”
“No need to go into any further detail,” she says. “The majority of people understand that what’s happening in the world will affect our decisions in new ways. Both guests and the couple need to remember this isn’t personal, it’s a pandemic.”
Lead with honesty
Etiquette expert Lizzie Post says guests don’t have to choose between being a supportive friend and respecting their comfort levels right now.
Here’s how she would deliver the news: “I love you so much. And I’m so excited about your wedding. But I need to admit to you that I am not feeling comfortable about going. I would love to support you in other ways.”
Guests can ask the couple what they need and how they can support them, she says. Whatever guests choose to do, Post says the most important thing guests need to remember is to be honest.
Don’t over-explain
Elaine Swann, the founder of The Swann School of Protocol, says guests should utilize RSVP opportunities provided by the couple.
“If someone sends you an invitation in the mail, and they provide an RSVP card, fill that card out accordingly. Do the same with an electronic invitation and wish the couple well––very simple. I do not recommend giving explanations,” Swann says.
Because the couple is already deep in the process of planning a wedding and dealing with everyone from their own family members to vendors, Swann says guests shouldn’t give them anything else to think about.
“When you come in and you bring your explanation and your details and so forth, there’s a bit of an overload of information that the couple will experience,” she says. “In this instance, it’s more thoughtful to withhold details.”
Post says no matter your relationship to the couple getting married, the best thing guest can do is to be considerate. Planning a wedding can be overwhelming, she says, and the pandemic makes it that much worse.
“Along with the fact that we are all living under extremely stressful conditions right now, if someone seems a little out of sorts over their wedding, it’s because that’s going on and the pandemic,” Post says. “Just take it with a big, big grain of salt.”


fortune--2020-08-23--Uncharted’s Jessica Matthew’s has a plan to revive America’s crumbling infrastructure

When Jessica O. Matthews heads to board meetings for Scenic Hudson, an environmental nonprofit that has fought for environmental protection since 1963, she knows she’ll stand out.
“I’m the only Black person. I’m one of maybe a handful of women. I’m the only person under the age of 35,” Matthews told Fortune. “And it has always been so incredibly surprising to me how easy it is for people who consider themselves to be environmentalists to separate themselves from a group of people who I believe are very much suited for environmental work.”
For the double Harvard graduate, the experience is nothing new—but it does point to one reason why sustainable infrastructure is still not a basic human right, even in the U.S.
The American Society of Civil Engineers graded infrastructure in the U.S. a D+—that’s a “D as in dog”, Matthews likes to say—while data from the Galvin Electricity Initiative shows that the United States experiences more power outages than any other developed nation. According to the society’s research, the U.S. would need to invest $4.59 trillion by 2025 to improve the nation’s infrastructure. Though these facts show a nationwide problem, it’s actually Black and brown communities that bear the brunt of our aging infrastructure, according to a study by Environmental Protections Agency’s National Center for Environmental Assessment.
It’s people of color who are three times more likely to die from pollution related illness, according to Yale researchers, and it’s people of color who account for half of the 9 million Americans forced to live near landfills and hazardous waste sites. It’s by including people of color in sustainability conversations that Matthews thinks that efforts to improve infrastructure will make a difference.
Matthews launched Uncharted Power in 2011 to crack what it takes to build sustainable infrastructure in communities that are under-resourced, she says.
The company’s solution for updating infrastructure in a cost effective way starts under our feet. Uncharted Power has developed pavers––the same kind you would see on a sidewalk or a road––that can house a power conduit, hardware for data collection, and servers to transmit the information collected at each location. Uncharted Power believes that cities can use the data they collect to sell to companies that want to use their information to further their own business—choosing their store location based on foot traffic data, for example—funding their infrastructure development by monetizing their data. Matthews has been testing the system at her facility in upstate New York and now Uncharted Power is looking to partner with cities in need of improving their infrastructure. Matthews spoke to Fortune about her mission to make access to power more affordable and sustainable.
Uncharted Power CEO Jessica O. Matthews Uncharted Power
This interview has been edited for length and clarity.
From the soccer ball you developed as a Harvard undergrad to harness kinetic energy until now, your work has revolved around energy efficiency. How has your approach to sustainability changed over the last ten years?
Uncharted Power essentially has focused on two main impact areas over the history of the company. The first is infrastructure and the second is education. When the company started, believe it or not, the assumption was actually that the latter was the biggest issue. I mistakenly assumed that there were smarter people who could be fixing what was clearly an infrastructural issue, but the issue was that they lacked the inspiration. They lacked the understanding or belief that they could have agency in this space.
That’s why when we started, we were making energy generating play products. The idea was to bridge the gap between the people who I think could be most impactful in this space because they’re feeling the pain the most, and the belief that they could do something and run with it. We used play as that bridge to make that happen.
And over time, our understanding of the problem evolved. We realized that society did not have the tools to build a new type of infrastructure that was more sustainable, that was easier to scale in these types of communities. We started to build intellectual property in energy transmission generation, to look at how you could rebuild the grid—the thing that hasn’t been upgraded in 150 years. We’re setting the stage not only for the way power is used today, but the way power is going to be used tomorrow.
It’s no secret that our infrastructure needs a major overhaul. What are some obstacles to progress when it comes to understanding and fixing the problem?
Well, first and foremost, it’s more expensive to design sustainably and it’s more expensive to design so that there isn’t an obvious loser in the situation. In just the United States, we’re looking at about $200 billion a year in deteriorating infrastructure. Very few people are sitting here saying “I’m super excited to go poison the Black people over there”—I mean, like there might be some—but it’s more like, “Why do I have to think about everyone? I just want to make money and hop on my jet and just live my life.” Right? Or, “Life is easier if I don’t have to see them and I can pretend they don’t exist.”
And so the number one thing we need to do is figure out how to change the narrative from a conversation of “this is what’s right and that’s wrong” to a narrative of, “this is how you actually make more money.” Doing good and doing well cannot be mutually exclusive for us to have a chance in hell at creating the world that we want to live in.
There are a lot of unintended consequences when not every community has a part of the conversation. With the National Environmental Policy Act, which was recently modified by the current administration to allow for quicker construction, what kind of consequences do you foresee?
At face value, infrastructure is something people need. It also brings jobs––accessible jobs.
The problem we have though, if we pull back these standards, we then run the risk of things being done the wrong way. We run the risk of there being quite a few environmental issues that won’t show their face immediately, but you’ll see them down the line.
Think of NIMBY. The more affluent communities have lobbyists who are ensuring that the infrastructure that they need doesn’t get built in their community. It’s the reason why most of these warehouses, most of these manufacturing facilities, most of these industrial complexes that are serving very affluent cities are never in the city. But there’s no one to lobby or truly care for the poorer group who are living near them.
Take Houston for example. Houston is a really interesting place because they have quite a bit of industry there, just the oil and gas industry there should suggest that people should be affluent there. But the air quality on the edge of Houston is so bad that the majority of people who live there, their life expectancy is anywhere from 10% to 15% less than the average person.
These people are living with respiratory illnesses and no one’s talking about it. And when I say people, I’m not just [talking] from a data perspective. My partner’s family lives in Harris County, outside of Houston. His stepmother: respiratory illnesses and asthma. His father: rare respiratory illnesses. It’s 100% because they know that the air is just bad. And it’s 100% because they know that no one cares that the air is bad for them. It kind of feels like saying the same thing over and over again, but if we do not create standards, we will see that certain groups are just getting the runoff of industry. Time and time again, we find that when we cut corners like what’s going on with the new effort from 45 [U.S. President Donald Trump], it’s usually the under resourced communities that get the short end of the stick.
How do you make people care? More than that, how do you get people to act?
You cannot underestimate the power of white guilt. I think that there are a lot of people that can sense the lack of fairness and those are the people you start with. You have to kind of package and create a streamlined way for them to reduce their guilt by being able to invest and support what you’re doing. And there’s nothing wrong with that. I mean, I grew up Catholic, so guilt is a way of life.
I do believe that the key for people who are trying to create this synergy around environmentalism, climate change, and racism, is to organize your issues into something that’s actionable. You need to create some sort of streamlined methodology for people to be able to engage with, whether it’s investment or donation, there needs to be something. It’s human nature to look for the most efficient way to decrease guilt.
I think what’s critical is to frame things from a macroeconomic perspective as well. This should not be about charity––charity isn’t sustainable in my opinion. It does not help anyone to have communities where people feel like living there is a death sentence. It does not help anyone to have a situation where there’s a whole generation of a workforce that feels so subjugated by their lack of access to clean water.
How do you go about creating a more equitable system?
I love what we’ve built with the Uncharted Power system because though it may seem like a simple paper solution, at the end of the day it comes back to three things: We have to create essentially an ethical Google for power infrastructure. We have to come in and say, let’s create a platform that streamlines the way people engage their infrastructure and streamlines the way we manage it, the same way that Google built all these amazing digital infrastructure platforms that streamlines the way that we engage with the digital world. They’re not charging us for that. They’re not saying, you know, only the affluent communities get Google Hangouts––they figured out a way for it to be for everyone. There’s a lot to learn there, and a lot that just have not been properly adopted in infrastructure.
What we were able to do [is] we’ve built this platform that allows us to build these full-scale, sustainable power grids, and financed them by essentially creating this platform to set up a co-location space and help communities and cities monetize their data. So the way Google sells ad space, we partner with communities to help them essentially sell the colocation space for 5G antennas and other smart city technologies in the ground to finance these projects without asking the city to take out more debt.
That has been such a massive innovation for us and it’s taken years to get there. Right now we are launching a local pilot and from there our hope is that we can scale this model and show people this new way of thinking about building critical infrastructure for under resourced communities without hurting their bottom line. If there are cities that need upgraded power and data infrastructure but are struggling with the financing of it, we want to start talking to them.


fortune--2020-08-23--Why are local governments paying Amazon to destroy Main Street?

The coronavirus pandemic has brought new scrutiny to the way in which Amazon treats its warehouse workers, whose exhausting, precarious positions now come with a decent chance they’ll be exposed to a deadly virus. And yet, Amazon is going gangbusters to expand its network, opening new facilities all across the country with the aid of compliant cities and states and little recognition of Amazon’s devastating impact on local economies.
In North Andover, Mass., for instance, Amazon recently received $27 million in public funding to build a new warehouse. In Windsor, Conn., it was $8.8 million. The property taxes for a new Amazon distribution center in Glenwillow, Ohio, will be reduced by nearly half for 15 years. And the e-commerce giant is receiving taxpayer dollars for distribution facilities in Whiteland, Ind., and Arlington Heights, Ill., too. Overall, Amazon has received nearly $3 billion in subsidies from state and local governments. There are surely other handouts in the works.
Officials justify these monetary favors as necessary for bringing jobs and investment to a local area. But in truth, policymakers are funding the demise of Main Streets across America and further entrenching Amazon as a gatekeeper across wide swathes of the economy. Federal and state officials are looking anew at Amazon’s power, most prominently through Congress’ big tech hearing in late July and state-level antitrust investigations. Local officials need to pay attention to Amazon’s power, too.
Amazon’s distribution network promotes at least two significant interests for the company: accessing customers and using that access to force other sellers into coercive arrangements that promote Amazon’s other lines of business. As Good Jobs First has found, Amazon strategically places warehouses where there is a concentration of disposable income, Amazon Prime subscribers, and easy access to highways and airports. That makes sense, since Amazon’s aim is to get stuff to people who are likely to buy things from it faster, regardless of any sort of tax incentive or other regulatory favor.
But Amazon also leverages its warehouses to extract funds from other businesses by giving Prime Eligibility and the coveted “Buy Box” to sellers who pay Amazon to handle their storage and distribution through Fulfillment by Amazon, or FBA. Because buyers are far more likely to buy items that are Prime eligible, Amazon can coerce businesses into paying Amazon to handle their warehousing, even if it would be cheaper and faster to use alternative methods.
Don’t use Amazon’s fulfillment system, and loads of customers simply never see your product. During last month’s congressional hearing, Amazon CEO Jeff Bezos admitted to employing this tactic.
This sort of arrangement also allows the company to continue to bolster its shipping operation. Last year, Amazon delivered nearly 50% of its own packages, compared to less than 15% in 2017. Dominance in one area of commerce—online shopping—is being used by Amazon to make inroads into others, with the eventual aim of toppling FedEx and UPS.
Amazon pushes sellers into using its logistics system even when doing so slows down deliveries. As Ron Knox and Shaoul Sussman of the Institute for Local Self-Reliance recently explained, Amazon could have reopened its shuttered Seller Fulfilled Prime program when orders spiked during the pandemic, granting Prime eligibility to sellers who handle their own logistics. It didn’t, and the subsequent backlog kept critical orders from reaching their destination quickly.
To Amazon, it was simply more important to keep funneling orders into its own storage and delivery system. Most companies in the fulfillment space think Amazon is well on its way to monopolizing the business.
Despite all this, many local officials are still keen on subsidizing Amazon’s expansion because they believe it will bring jobs and revenue to struggling cities and towns, especially during a pandemic that has devastated local businesses and government budgets. But according to the Economic Policy Institute, new warehouses don’t bring wider employment growth to a local economy. They either blunt other economic activity or have too small of an overall impact to even measure.
Amazon also decimates local budgets through its effect on traditional retail. A 2015 analysis found that Amazon sales displaced retail outlets that would have paid $528 million in property taxes. And that’s before getting into the specific tax benefits given to Amazon, which usually come in the form of property tax reductions.
By continually funding the expansion of Amazon’s fulfillment network, cities and states are ensuring that their own brick-and-mortar stores fall ever further behind, and that Amazon’s monopoly power extends from online shopping to logistics, shipping, and beyond, making the emergence of a competitor in any of those areas ever more unlikely. They’re guaranteeing that local businesses hoping to expand will be forced to pay tolls to access Amazon’s customer base, above and beyond the usual fees Amazon extracts from users of its platform.
Since Amazon needs its distribution network, it is perfectly willing to open new facilities without taxpayer largesse—as it reportedly did in Danbury, Conn., and Fort Bend County, Texas. Rather than subsidizing Amazon, local officials must close the spigot, and focus their limited resources on providing key services and promoting small, local businesses that are threatened by the COVID-19 pandemic.
Pat Garofalo is director of state and local policy at the American Economic Liberties Project and author of The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs.


fortune--2020-08-24--AstraZeneca denies it is in discussions to fast-track U.S. approval of its COVID-19 vaccine

‘ There ’ s going to be a selloff in the stock market ’ if Congress doesn ’ t pass @ @

Pharmaceutical giant AstraZeneca says it has held no discussions with the U.S. government about emergency authorization for the COVID-19 vaccine it is manufacturing.
That vaccine is still undergoing late stage human clinical trials in several sites around the world, including in the U.K. and the U.S., making a rapid approval under the criteria the U.S. Food and Drug Administration has established so far a long shot.
British newspaper The Financial Times reported Sunday that the Trump Administration was considering a plan to fast-track approval of the vaccine, which has been developed by researchers at Oxford University in the U.K. and which AstraZeneca has agreed to help test and manufacture.
The paper cited three anonymous sources that it said had been briefed on the White House plan which, it said, included an option for the FDA to grant “emergency use authorization” to AstraZeneca’s vaccine if the results are positive from a late stage clinical trial in the U.K. that Oxford is running. That study involves about 10,000 people, and is expected to announce results as early as next month.
The FDA has previously said that any vaccine seeking a license will need to show positive results in a much larger clinical trial, involving at least 30,000 people. AstraZeneca is starting a clinical trial of that size in the U.S. for the vaccine, but results are not expected to be ready until later in the autumn.
President Donald Trump is reportedly desperate to have a COVID-19 vaccine approved before the November 3rd presidential election in order to boost his chances of reelection. Some are even speculating he sees it as his “October surprise.” Trump is currently trailing Democratic presidential nominee Joe Biden by about 10 points in national opinion polls.
“AstraZeneca has not discussed emergency use authorization with the US government and it would be premature to speculate on that possibility,” AstraZeneca said in a statement Monday in response to The FT story. “Late stage Phase II/III trials for [the Oxford vaccine candidate] are ongoing in the U.K. and other markets globally, and we do not anticipate efficacy results until later this year.”
Despite the denial, investors sent AstraZeneca shares up 3.7% in morning trade on Monday.
“Vaccines you’ll be hearing about very soon”
The FT report came on the same day that Trump held a press conference to announce the FDA had granted emergency use authorization for blood plasma from recovered COVID-19 patients to be used to treat those currently suffering from the disease.
At that press conference, Trump hinted that a vaccine authorization might be imminent. “We’re years ahead of approvals than we would be if we went by the speed levels of past administrations. We would be two years, three years behind,” the President said. “That includes vaccines that you’ll be hearing about very soon.”
Leading Democrats have said the White House must not approve a vaccine before reliable safety and efficacy results are available. In addition, Peter Marks, who heads the FDA division responsible for assessing vaccine candidates, told Reuters he would resign if the Trump Administration pressures the agency to approve a vaccine without adequate trial data showing it was safe and effective.
In addition to the Oxford-AstraZeneca vaccine, several other vaccines, including ones being developed by biotech company Moderna and pharmaceutical giant Pfizer, are also now undergoing large, 30,000-person Phase III clinical trials in the U.S.
Moderna began recruiting volunteers in July and has said it will complete enrollment by the end of September. Pfizer says it has recruited just over a third of its participants and will be “ready for regulatory review in October.” But even so, it is unclear that a vaccine could be approved under the FDA’s existing guidelines before November 3.
On Saturday, an impatient Trump alleged in a Tweet that unnamed individuals within the FDA were deliberately trying to slow enrollment in vaccine trials so that clinical trial results would not be available until after the election. “The deep state, or whoever, over at the FDA is making it very difficult for drug companies to get people in order to test the vaccines and therapeutics,” Trump wrote. “Obviously, they are hoping to delay the answer until after November 3rd. Must focus on speed, and saving lives!”
That tweet drew condemnation from U.S. Speaker of the House Nancy Pelosi, who called Trump’s tweet “a dangerous statement” that “went beyond the pale” and could “jeopardize the health and wellbeing of the American people.”


fortune--2020-08-24--OneRepublic’s Ryan Tedder on launching a hemp-infused sparkling water brand

AstraZeneca denies it is in discussions to fast-track U.S. approval of its COVID-19 vaccine

This is an installment of Startup Year One, a special series of interviews with startup founders about the major lessons they have learned in the immediate aftermath of their businesses’ first year of operation.
Ryan Tedder says his business background is about as different from the “beverage” industry as one could imagine. Previously, he had been writing and producing songs professionally since 2001. And you might have heard of his band, OneRepublic, which has been in its current iteration since 2007.
Aside from music, Tedder has quietly been an early-stage investor in a number of different companies ranging from tech to food and beverage to a commercial real estate firm, which he and his wife have been involved with since 2008.
Fortune recently spoke with Tedder to learn more about his new business venture, the lessons learned, the hurdles overcome, and plans for the next year.
The following interview has been condensed and lightly edited for clarity.
Ryan Tedder, founder of Mad Tasty Getty Images
Fortune: Sparkling water and CBD are both hot markets right now, but they’re both crowded, too. What inspired the launch of Mad Tasty? And how does it stand out from the bevy of other canned seltzer and sodas on the market today?
Tedder: The inspiration for Mad Tasty began back in 2017. I was going through the hardest stretch of my life. I had traveled over 400,000 miles in about seven months, and I was completely burnt out from promoting a new album and being on tour. I was having panic attacks, heart palpitations, and had developed a major sleeping issue, which ultimately led to me being prescribed Xanax.
During this time, I reconnected with some high school buddies of mine—the Stanley brothers—who had started a hemp company called Charlotte’s Web. I invested in their company, and in tandem the Stanley brothers gave me a crash course in all things hemp, from its history as a major medicinal plant to the intricacies of the human cannabinoid system, and I quickly started introducing CBD into my everyday life.
In 2017 and 2018, the only way to dose with CBD was using tinctures and eyedroppers, usually mixed with olive oil or some other not-delicious oil. I knew there had to be a tastier way to enjoy CBD, and out of sheer luck and timing I got introduced to a company out of Seattle called Sorse [Technology]. Oil [hemp] and water don’t mix: So many CBD beverages end up with separation; that is, after a certain amount of time their hemp oil can float to the top of the bottle or can. Sorse figured out a way to emulsify hemp oil to the point that it maintains integrity for the life of the drink. I have never had strong opinions about cannabis—whether smoking or edible—and I’ve always had an adverse reaction to THC. So believe me when I say that I am the least likely person to join the hemp space.
However, as soon as I began using CBD as a stress-reducer and anti-inflammatory, I noticed that I felt more centered and calm without the euphoric effects that come with taking cannabis or the tiredness you get from Xanax. Combine all that with my desire to counterbalance all the coffee I drink with a lot more water, and I arrived at Mad Tasty.
Mad Tasty says its hemp-extract product (which includes the cannabinoid CBD) offers a unique mix of clarity and calm without the high. Courtesy of Mad Tasty
CBD is such a buzzy space, but studies are still mixed on the health benefits. What are you hoping customers get from Mad Tasty?
As for the health benefits of CBD: They’re not a placebo, I’ve experienced them myself, and the personal stories we have from customers now are too many to mention. Before launching the company we consulted with number of doctors and hemp experts who understand the body’s reaction to CBD. I also knew of the tens of thousands of personal stories from Charlotte’s Web CBD users. We have the absolute highest level of testing and research, and our water is sourced from a natural aquifer in the Cascade mountains, so purity is never in question.
I’m hoping that customers find a restorative beverage that centers them and helps them find focus while alleviating the innumerable stresses that come at us every single day. The health benefits to me are real—anti-anxiety, anti-inflammation, et cetera—but it is up to each person to determine how hemp extract and CBD can benefit them.
What were some of the biggest hurdles you faced in the past year? What surprised you the most?
The biggest hurdle for any lifestyle or beverage company is the lack of FDA regulation in the hemp space. Globally, the demand for CBD and hemp extract has exploded, and certain countries like Canada have moved ahead, and, in my opinion, done the right thing by making it permissible to sell in food and beverage. Hemp extract and CBD have been consumed for thousands of years as medicinal supplements, and hemp has also been used for other things like rope, thread, and clothing. Without diving into the historical relevancy of hemp and its agricultural ancestry, I want people to know that hemp has always been a part of the American economy. It’s been around just as long as cotton. You’d be surprised to find how intertwined it is with our everyday lives.
The other hurdle for Mad Tasty this year, and most companies, is the COVID-19 pandemic. Our online and direct-to-consumer sales are up 700% since January, but our in-store retail sales are down 75%. Thankfully, our burn rate and overhead are lean, and we are still net positive for the year, which I feel is a victory on any level in 2020.
What kind of feedback have you received from your customers, and have you (or will you) apply that feedback to how you sell your products in the future?
At the risk of sounding too hyped on our brand, our feedback has been simply outstanding. Somewhere around 99% of our emails, surveys, and questionnaires have resulted in positive feedback. I should use the term “customer,” but given my experience in music, I tend to refer to consumers as fans, and I choose to treat them as such. Like the music industry, the goal is to keep our fans motivated to come back to our shows and continue to buy our albums and give them an experience that affects them personally, emotionally, and physically. In music, I am only trying to write songs that I want to hear myself, and my approach to Mad Tasty is the same. If Mad Tasty was an album, my objective is that it’s one you play on repeat.
Obviously, amid the coronavirus pandemic, consumers’ purchasing habits, practices, and even their relationship to groceries is going to change. How does Mad Tasty plan to adjust and fit into whatever this new normal might be?
Within 10 days of releasing our newest flavor, Unicorn Tears, we decided to donate 100% of our online profit to the Red Cross and frontline health care workers. Within three weeks of the pandemic, I called my executive team and said that we have to make masks. We are a small and nimble company, and I don’t plan on becoming so big that we can’t pivot on a dime to do the right thing at the right time. Being nimble in any nascent industry or category is everything.
At the same time, how does a shutdown of this nature affect the future of the business, from product development to raising capital?
In terms of raising capital, that has never been a problem for this brand, and I don’t see that being a problem in the future. The conversations that we have had as a business have exceeded my expectations and never cease to surprise me. Also, we have the benefit of a healthy level of autonomous liquidity between [investor] First Bev and myself. I want to go on the record and say that Bill Anderson and his team at First Bev have been absolute SEAL Team 6–level operators in this space, and I’ll never be able to praise their expertise and focus enough. They have been phenomenal partners, and I feel honored to be working with them.
Like everyone else in this line of work, we do not exist in national chains—even though we have pre-existing deals with many of them—and we have taken a hit in the retail segment because of that. Fortunately, it has been somewhat offset by our direct-to-consumer online sales. Apparently, people have figured out that CBD is a phenomenal anxiety suppressant. Lord knows we need more of that.
Looking beyond the post-pandemic era, which could be anywhere from a year to a few years from now, how do you plan to grow Mad Tasty, and what do you want the business to look like five years from now?
I plan to grow Mad Tasty the same way you build a fan base as a recording artist, one fan at a time. One believer, one consumer, one zealot in this space at an organic and unhurried pace. What I have learned quickly in this category [beverage] is that regardless of the trends, you only succeed if you take one state at a time, one account at a time, and one distributor at a time. I have developed an absolute obsession with this space and brand, and our team feels the same way. I’m prepared to own this company for as long as possible and help it grow until we reach critical mass.
The purpose of Mad Tasty is well beyond a need for me to prove something in the beverage space. It is a vehicle that impacts actual lives thousands of miles beyond the coffee shop or convenience store. Cranking the dial on that impact is my five-year plan.


fortune--2020-08-24--Investors continue to push global stocks into record territory

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. It’s a risk-on Monday with Asia, Europe and U.S. futures all in the green. That’s because Washington appears to be softening its stance on Chinese tech firms. Also, investors heartily welcomed this weekend’s news the U.S. Food and Drug Administration is looking to expand blood-plasma treatment for COVID-19 cases.
Here’s what’s moving markets.
Markets update
Asia
The major Asia indexes are trading higher, with Hong Kong’s Hang Seng leading the way, up 1.4% .
are trading higher, with Hong Kong’s leading the way, up . Tencent Holdings popped in early trade on Monday after reports surfaced the ban Washington is mulling won’t preclude U.S. companies entirely from doing business with the WeChat platform in China. The wider Asian markets were also up on the news.
popped in early trade on Monday after reports surfaced the ban Washington is mulling entirely from doing business with the WeChat platform in China. The wider Asian markets were also up on the news. It was Facebook‘s Mark Zuckerberg who planted the crucial early seeds—way back in October—in Washington that TikTok was bad for American business and bad for America’s belief in “freedom of expression,” the Wall Street Journal reports in a big scoop this morning.
Europe
The European bourses were solidly positive in mid-morning trade, with Germany’s Dax up 2.3% as it nears break-even for the year.
were solidly positive in mid-morning trade, with Germany’s Dax up as it nears break-even for the year. British PM Boris Johnson is hanging hopes on a successful-back-to-school period to jumpstart the moribund U.K. economy . Over the weekend, he appealed directly to parents, saying the COVID risk in the classrooms is “very small.”
is hanging hopes on a successful-back-to-school period to jumpstart . Over the weekend, he appealed directly to parents, saying the COVID risk in the classrooms is “very small.” Norwegian life insurer Storebrand ASA, which has about $91 billion under management, is dumping its stakes in oil giants Exxon Mobil and Chevron and going full steam ahead on its divestment from coal as it revamps its climate policy.
U.S.
The U.S. futures are pointing to a positive open. That’s despite new Goldman Sachs research calculating that roughly one-quarter of U.S. jobs— 4.5 million —lost to the pandemic aren’t coming back any time soon.
are pointing to a positive open. That’s despite new Goldman Sachs research calculating that roughly one-quarter of U.S. jobs— —lost to the pandemic aren’t coming back any time soon. Last week was one for the record books. The S&P 500, Nasdaq and Apple all hit a series of all-time highs . It looks like they’ll add to those gains out of the shoot this morning.
and Apple all hit a series of . It looks like they’ll add to those gains out of the shoot this morning. What’s on the calendar this week? It’s the Republicans’ turn to hold a virtual convention; the RNC kicks off later today. There will also be consumer confidence, housing data and, beginning Thursday, the Federal Reserve’s annual symposium on monetary policy, usually held in Jackson Hole, will stream online. It’s unlikely the Fed will say anything to lift the dollar in a meaningful way.
Elsewhere
Gold is up, nudging above $1,950/ounce .
is up, nudging above . The dollar is down.
is down. Crude too is up, with Brent trading around $45/barrel.
***
European invasion
Suddenly, Europe is looking pretty good to investors. There are a host of reasons for why that might be.
For starters, on a P/E basis, European equities, in general, aren’t nearly as pricey as those in the U.S. And the outlook for the bloc is looking a bit more stable these days. It helps that EU lawmakers have already agreed to a giant stimulus spending package for the trading bloc, so that worry is off the table. Another plus—there are no huge elections in the coming months that could throw the balance of power in any country from Left to Right, or vice versa. And, even with a worrying upsurge in COVID cases in recent weeks, governments feel somewhat confident they can contain it without shutting down whole economies.
Taken together, it’s all looking fairly dull on this side of the Atlantic—a business-as-usual vibe, even. For now, at least.
Most of those factors are driving money managers to give Europe a closer look. Bloomberg cites a recent Bank of America Corp. survey of fund managers who say investors are holding their largest overweight position in euro-area equities since 2018. BlackRock and Goldman Sachs are seeing similar flows.
In fact, Goldman is tracking cross-border investment flows into equities, commodities and fixed-income assets. In recent weeks, Goldman notes, there’s been a big flow out of equities in general as investors start to question whether the U.S. equities rally is hitting its upper limits. Investors though are still fairly bullish on European (but not necessarily on UK stocks) and Chinese equities (though Chinese equities are incredibly volatile) as the chart shows.
The Euro-U.S. advantage is slight at the moment, but it’s notable that, for investment flows, the Euro zone has finally overtaken U.S. equities for the first time in months in recent days, “reflecting,” Goldman says, the “selling of US equity products but steady demand for other pro-risk assets.”
This same sentiment is even more pronounced on the FX front. The euro is up 9% against the greenback since April as dollar-shorts build up.
A lot of this is to be expected. The investment pros often preach a wait-and-see approach ahead of a major U.S. election. And they’re doing so again this year.
But other factors are starting to cloud the U.S. outlook. The questions are numerous: Can the U.S. do a better job of slowing the COVID surge during the crucial back-to-school period? Will Congress agree to a stimulus package to help those most affected? Will the election be a drawn-out, contested affair that divides the country further?
Here in Europe the markets are content that these existential questions, for a change, are being directed at some other part of the world.
Postscript
There are no traffic lights in Montemonaco—population: 558. The closest one is good half-hour drive down into the valley somewhere. (And that traffic light is probably blinking yellow most of the year.)
Montemonaco sits on a ridge below two mountains: Monte Sibilla and Monte Vettore. At 2,476 meters (over 8,000 feet), Vettore is the biggest peak in the Monti Sibillini chain. If you want to climb it, you usually start your expedition from Montemonaco.
Montemonaco is a beautifully spectacular place. But in a country of beautifully spectacular places, Montemonaco finds it hard to compete for tourists. It’s popular with scruffy mountaineers, mountain-bikers and ice climbers (my kinda crowd), but it’s otherwise left off of most travel itineraries.
Until this year that is. This part of Italy is under invasion. The lakes. The hiking trails. The gelatterie (ice cream shops), bars and restaurants. Strapieno, as the Italians would say. Packed tighter than a cannolo.
I’ve never seen so many tourists in these parts. The difference this year: it’s Italians making the trip. Italians from North and South—from Puglia and Milan, from Rome and Treviso—are doing their summer breaks closer to home. They’ve ditched the August sojourn in Sardinia, bailed on the great escape to the Greek isles, abandoned the Scandanavian retreat. And they’re coming to places like Montemonaco—no traffic light; one bank, no customers.
It’s a phenomenon happening everywhere in the world: tourists (those who can afford to go on break) are venturing to places nearby—places reachable by car where, they’ve carefully researched, the COVID numbers are relatively low. In the process, tourism has been turned on its head. Out are package tours. In are local haunts that are long on charm but probably have no marketing budget or Instagram accounts.
Here in this part of Marche, every vacation home is booked. Hotels are near full occupancy. Restaurant reservations are suddenly hard to come by, as we’ve come to learn. Part of it is the strict social-distancing rules. Restaurateurs can no longer cram diners in for tagliatelle and grigliata mista. But it’s also a classic supply-demand puzzle. With so many Italians discovering (or rediscovering) Marche—and, in particular, Monti Sibillini National Park—restaurants suddenly cannot accommodate everyone.
The locals, a proud lot, are overjoyed (and a bit overwhelmed) by all the attention.
It’s been a bit of an adjustment for all of us. On most Saturdays and Sundays, we usually head up into the mountains, go for a hike, fly a kite, splash around in a stream maybe. Then we pitch up to one of several favorite local joints. If we have a hankering for a dish of pasta loaded with shaved truffles, we know where to go. If the kids tell me they’re craving the cinghiale (wild boar), we turn left. If I’m peckish for tripe or grilled lamb, we go the other way.
Flying a kite on Monte Sibilla (in quieter times). Original Photo: Bernhard Warner.
Every place we turned yesterday was fully booked. We finally did find a table, at a favorite place—La Scampagnata—and marveled at the sheer number of diners. The kitchen was slammed. The wait staff was running ragged.
“I can’t believe this is Montemonaco,” my wife and I kept remarking.
At the end of the meal, the owner apologized. They’d run out of nonna’s pomodori ripieni (stuffed tomatoes), a typical late-summer specialty. From his tone, it sounded like a first.
Don’t apologize, we told him. “Montemonaco is on the map. Enjoy it.”
The tagliatelle is barely visible under a heaping of summer truffles and porcini mushrooms. My kids would order this every day of the week, if possible. Original photo: Bernhard Warner.
Bits and bites
A big thanks to all the helpful reader emails offering advice on how to get a puppy to stop nipping at my heels.
We did make some modest progress this weekend. Now, after Scilla takes bite out of my sandals or goes for my heels, I lean down and gently close her snout shut. A firm “No!” follows.
She listens to me about half the time.
If only my kids would listen to me half the time.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Precious mettle. Gold has been on an epic run, up 28% this year. But the trade has been more volatile than most commodities traders can remember, suggesting, as the Wall Street Journal notes, "that gold and silver have joined U.S. tech stocks among the most crowded trades in markets." Not only that, the volatility would also suggest those big gains could be wiped over a few bad trading sessions.
More cuts at Wells Fargo? The beleaguered San Francisco–based banking giant had pressed pause on its major downsizing initiative once COVID hit earlier this year. But now it appears it's business as usual. Ergo, the cuts are back on the table.
Amazon and on. What do North Andover, Mass., Windsor, Conn. and Glenwillow, Ohio all have in common? They are among the U.S. communities cutting huge sweetheart deals—usually in the form of tax breaks and multi-million-dollar grants; the total value of which is more than $3 billion so far—to attract Amazon to build distribution centers in their towns. Why? In the short term, the answer is jobs. But, Pat Garofalo argues in Fortune, in doing so, "policymakers are funding the demise of Main Streets across America and further entrenching Amazon as a gatekeeper across wide swathes of the economy." Garofalo is director of state and local policy at the American Economic Liberties Project.
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Market candy
Quote of the day
"If that doesn't happen, and the odds of that happening continue to decline, there’s going to be a selloff in the stock market."
That's Mark Zandi, chief economist at Moody's Analytics. Zandi is not alone in thinking that, should Congress and the White House fail to agree on a new stimulus package, the markets will fall. How much of a correction are we talking? Fortune's Anne Sraders and Lance Lambert break it down.


fortune--2020-08-24--Stakeholder capitalism isn’t a choice

Stakeholder capitalism isn’t a choice

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Lots of commentary during my staycation on the one-year anniversary of the Business Roundtable’s statement on corporate purpose—which put employees, customers, their communities, and the environment on a par with shareholders. David pointed Friday to this balanced analysis by Fortune maestro Geoffrey Colvin. Other writers were more critical. Many on the right dislike stakeholder capitalism because they fear it undercuts the economic discipline of shareholder governance. Many on the left dislike it because it encourages “elite” CEOs to arrogate the role of government. Two prominent academics offered extensive research they say proves the effort “illusory”—and a bad idea, even if it weren’t.
But what critics miss is this: stakeholder capitalism isn’t a choice. It’s an imperative. It is happening, driven by trends that show no sign of reversing. The outpouring of CEO sentiment after the George Floyd killing wasn’t just because “woke” CEOs suddenly decided to speak up. It happened because talented employees demanded it, and talent is today’s top driver of corporate value. The post-pandemic focus on employee safety wasn’t just because of a wave of CEO empathy. It was forced by employees, government officials, health experts and many others—“stakeholders,” all.
Rising corporate concern over climate change doesn’t just grow from the greening of the CEO class. It is an unavoidable recognition by pragmatic business leaders—reinforced by their customers, investors and employees—that society faces an existential threat. All of these are part of stakeholder capitalism. None of them are things a responsible CEO can ignore.
The anniversary’s coinciding with the Democratic National Convention raises the issue of political tactics. Does the business community’s move toward stakeholder capitalism help stave off Democratic flirtations with socialism? Or does it encourage them? That’s an interesting question for Washington parlor debate. But in the long run, it’s irrelevant. Society, in various ways, is demanding more from business leaders. And their only choice is to get ahead of the trend or be dragged along behind it.
For the Business Roundtable’s defense of the Business Roundtable’s action, read BRT CEO Joshua Bolten’s piece here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Zuck vs TikTok
In discussions with President Trump and senior lawmakers, Mark Zuckerberg reportedly stoked fears of Chinese rivals such as TikTok in order to ward off stronger regulation of Facebook. Another couple of related pieces: half of Americans oppose Trump's potential TikTok ban, and an alternate universe where Barack Obama was still president would still probably see that ban being on the agenda. Wall Street Journal
Facebook taxes
According to French media, Facebook has struck a deal with that country's tax authorities that will see it pay around $123 million in back taxes and penalties. Reuters
Plasma treatment
The U.S. Food and Drug Administration has cleared a coronavirus treatment, called convalescent plasma, for use in some patients. The treatment uses blood plasma from patients who have recovered from COVID-19. There is as yet no proof of its benefits, but President Trump is a fan, and called it a "powerful therapy" in a news conference. PS: Trump is also considering fast-tracking AstraZeneca's candidate vaccine (which hasn't yet had a large-enough trial) before the U.S. election. Bloomberg
Irish golf
A golf dinner that took place in Galway, Ireland last week broke the country's coronavirus restrictions by having over 80 attendees when only six are allowed. A bunch of politicians were there, and a couple (agriculture minister Dara Calleary and deputy Seanad chairperson Jerry Buttimer) have lost their positions as a result. Phil Hogan, the EU's trade commissioner, was also there, and now he's under pressure. Politico
AROUND THE WATER COOLER
Reviving Nokia
Nokia moved too slow at the start of the 5G shift. Now, with the Finnish telecoms giant under the new leadership of a CEO and chair who worked together in the company's 1990s heyday—Pekka Lundmark and Sari Baldauf—investors are hoping for radical change. Financial Times
Which path?
If more stimulus is passed in the U.S., economists and analysts expect to see the markets take off. If not, expect a correction and fresh economic contraction. Moody's Mark Zandi: "Some lawmakers are ... taking some solace in the stock market and certainly the President is…And that is a huge error because the market is taking its cues from lawmakers expecting them to pass a rescue package." Fortune
Amazon aid
Pat Garofalo, policy chief at the American Economic Liberties Project, writes for Fortune that cities and states are entrenching an Amazon monopoly with taxpayer largesse: "By continually funding the expansion of Amazon’s fulfillment network, cities and states are ensuring that their own brick-and-mortar stores fall ever further behind, and that Amazon’s monopoly power extends from online shopping to logistics, shipping, and beyond, making the emergence of a competitor in any of those areas ever more unlikely." Fortune
Emotion detection
The emotion-detection app sector is booming, with services that claim to read people's emotions and stress levels based on things like heart-rate variability and changes in speech patterns. Joy Ventures CEO Miri Polachek highlights five examples of such apps. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-08-24--Boris Johnson is urging parents to send their children back to school this fall

U.K. Prime Minister Boris Johnson urged parents to send their children back to school when they reopen in England next week, amid growing concern among some teachers and union officials that it’s not safe to do so.
“The risk of contracting Covid-19 in school is very small and it is far more damaging for a child’s development and their health and well-being to be away from school any longer,” Johnson said in a statement on Sunday. “It’s vitally important that we get our children back into the classroom to learn and to be with their friends.”
Pupils were sent home in the coronavirus chaos of mid-March, and most haven’t been back since. Without parents back at work, there’s scant hope of emerging from the continent’s deepest economic slump. And with Johnson’s government reeling from a succession of blunders in dealing with the pandemic, the stakes are high to get school reopenings right.
The country’s chief medical officers said Sunday that the Covid-19 fatality rate among those ages 5 to 14 is lower than most seasonal flu infections. There’s an “exceptionally small risk” of primary or secondary school age children dying from coronavirus if it’s contracted, they said.
‘Lasting Negative Impact’
On the other hand, “the risks of not attending school are significant,” Jenny Harries, England’s deputy chief medical officer, told the BBC on Monday. “We know that if children miss out on their education, particularly those in more deprived areas, that will have a lasting negative impact on their health and their life chances.”
International studies show that teachers are more at risk of contracting the virus from other staff than from pupils, the medical officers said. They also noted that a lack of schooling increases inequalities, reduces the life chances of children, and can exacerbate physical and mental health issues.
But the government can’t afford any missteps, with public trust running low over its handling of the exam grading fiasco in recent weeks. A spike in infections that forces schools to close would likely further hurt Johnson’s Conservatives in the polls.
The Department for Education says it has set out clear guidelines on staggered starts to the school day, minimizing contact between pupils, and social distancing for teachers. Scotland, whose academic year started already, implemented its own similar measures.
Schools Minister Nick Gibb, sent out on Monday to reinforce Johnson’s message in the media, said parents can be “assured that schools are doing everything to ensure that the schools are clean and that the risk of transmission is at an absolute minimum.”
“It is a moral imperative to get young people back into school,” he said.


fortune--2020-08-24--Oxford’s COVID vaccine deal with AstraZeneca raises concerns about access and pricing

In a business driven by profit, vaccines have a problem. They’re not very profitable—at least not without government subsidies. Pharma companies favor expensive medicines that must be taken repeatedly and generate revenue for years or decades. Vaccines are often given only once or twice. In many parts of the world, established vaccines cost a few dollars per dose or less.
Last year only four companies were making vaccines for the U.S. market, down from more than 20 in the 1970s. As recently as Feb. 11, Dr. Anthony Fauci, the government’s top infectious disease expert, complained that no major drug company had committed to “step up” to make a coronavirus vaccine, calling the situation “very difficult and frustrating.”
Oxford University surprised and pleased advocates of overhauling the vaccine business in April by promising to donate the rights to its promising coronavirus vaccine to any drugmaker.
The idea was to provide medicines preventing or treating COVID-19 at a low cost or free of charge, the British university said. That made sense to people seeking change. The coronavirus was raging. Many agreed that traditional vaccine development, characterized by long lead times, manufacturing monopolies and weak investment, was broken.
“We actually thought they were going to do that,” James Love, director of Knowledge Ecology International, a nonprofit that works to expand access to medical technology, said of Oxford’s pledge. “Why wouldn’t people agree to let everyone have access to the best vaccines possible?”
A few weeks later, Oxford—urged on by the Bill & Melinda Gates Foundation—reversed course. It signed an exclusive vaccine deal with AstraZeneca that gave the pharmaceutical giant sole rights and no guarantee of low prices—with the less-publicized potential for Oxford to eventually make millions from the deal and win plenty of prestige.
Other companies working on coronavirus vaccines have followed the same line, collecting billions in government grants, hoarding patents, revealing as little as possible about their deals—and planning to charge up to $37 a dose for potentially hundreds of millions of shots.
Even as governments shower money on an industry that has not made vaccines a priority in the past, critics say, failure to alter the basic model means drug industry executives and their shareholders will get rich with no assurance that future vaccines will be inexpensively available to all.
“If there were ever an opportunity” to change the economics of vaccine development, “this would have been it,” said Ameet Sarpatwari, an epidemiologist and lawyer at Harvard Medical School who studies drug-pricing regulation. Instead, “it is business as usual, where the manufacturers are getting exclusive rights and we are hoping on the basis of public sentiment that they will price their products responsibly.”
In the United States and other developed nations, the solution to drug-company reluctance was to shower them with billions of dollars in public funds to persuade them to help. The Trump administration has announced deals worth more than $10 billion with seven companies to try to turn basic research—often funded by the government—into effective, widely distributed vaccines—but with no guarantee they would be widely affordable or available.
That approach has driven up stock prices in the past four months and enriched drug executives betting with somebody else’s money.
AstraZeneca stock and options owned by CEO Pascal Soriot have increased by nearly $15 million in value since early April, according to calculations by KHN based on company disclosures. The stock hit an all-time high in July. The stock market value of Novavax, a biotech that never recorded a profit in more than two decades, soared tenfold to $10 billion after a nonprofit and the Trump administration agreed to give it $1.6 billion to make a vaccine.
Companies “say we have to charge high prices because we are taking a risk,” said Mohga Kamal-Yanni, an independent consultant on global health based in the United Kingdom. “Actually, the public is taking the risk. The public is paying for the cost of research and development and probably the cost of manufacturing as well.”
Moderna, another company working on a vaccine candidate, received nearly $1 billion from the U.S. government to pay essentially all costs to research the product and get it approved by regulators. It’s using a vaccine designed in large part by the National Institutes of Health and academic scientists using federal grants.
If the vaccine works, the company gets an additional $1.5 billion to cover 100 million doses, a deal that U.S. Rep. Lloyd Doggett, a Texas Democrat, likened to giving taxpayers “the privilege of purchasing that same vaccine that we already paid for.”
That deal comes to $15 a dose. Moderna told Wall Street analysts it might charge as much as $37 a dose for smaller-volume contracts.
“This is greedy, and the taxpayers who have funded all of this should have expected better negotiation on the part of the U.S. government,” said Margaret Liu, a globally respected vaccine scientist who once worked for Merck and is now chairperson of the International Society for Vaccines.
The U.S. Health and Human Services Department “conducted extensive market research and price analysis” to ensure prices are fair, said a senior HHS official who asked for anonymity. “We are prohibited from disclosing price discussions and details.”
Even if Moderna distributed a successful vaccine at a loss to make it widely available, it would reap enormous benefits because government support would have helped validate its technology for future products, Liu said. Moderna did not respond to requests for comment.
Nonprofits such as Oxfam and Doctors Without Borders have been pressuring drug companies to change for years. Exclusive patents and high prices that sometimes make lifesaving medicines unaffordable in rich countries often render them completely unavailable in the poor world, they argue.
One workaround has been enormous private and government subsidies, including from the U.K., the United States and the Gates Foundation, to promote developing-nation vaccines through the Geneva nonprofit Gavi, formerly known as the Global Alliance for Vaccines and Immunization.
The Gates Foundation helped launch another non-governmental organization, the Coalition for Epidemic Preparedness Innovations, in 2017. CEPI was created to fight something exactly like the coronavirus: potential infectious threats ignored or slighted by pharmaceutical companies.
CEPI’s early principles of “equitable access” drew praise from reformers. The group asked for public data disclosure from drug-company grantees, “transparent” accounting to show true vaccine cost and the right to step in and take over a vaccine project if the developer failed to deliver.
The pharma industry immediately objected. Even though they were bankrolled by public money, drug companies were “concerned about the precedent that could be set if they allowed an outside entity, in this case CEPI, to set [the] price of a product unilaterally,” CEPI reported in February. The nonprofit backed down, removing most references to prices in a new policy that Doctors Without Borders called “an alarming step backwards.”
The original policy was intended to be “interim,” and CEPI’s “commitment to equitable access as a principle is the same,” said spokesperson Rachel Grant.
Some thought the worst infectious disease crisis in a century, along with the enormous public investments, would change industry behavior.
Governments could have demanded transparency and low prices. They could have offered developers cash prizes for vaccines that would have incentivized science but let the public retain the marketing rights, said Love, of Knowledge Ecology International.
Agreement by researchers to publish the virus genome in January set the stage for global scientific cooperation, many believed.
“The full sequence was shared with the world without any strings attached,” said Manuel Martin, a U.K.-based adviser to Doctors Without Borders on access to medical innovations.
The World Health Organization set up a “COVID-19 Technology Access Pool” to promote the sharing of patents and other knowledge. Oxford stepped forward and said it would offer nonexclusive, royalty-free licenses for its vaccine, meaning multiple parties could sell it at a low cost.
“I personally don’t believe that in a time of pandemic there should be exclusive licenses,” Adrian Hill, director of Oxford’s Jenner Institute, which is developing the vaccine, told The New York Times in April.
Instead, little has changed. No vaccine maker has offered open licenses, although NIH is sharing key technology it developed with multiple vaccine companies. Governments are signing lucrative deals with manufacturers to ensure vaccines for their own populations. WHO has made no announcements about contributions to its COVID-19 shared technology pool since it launched in May, patent experts said. WHO officials did not respond to a reporter’s queries.
After Oxford announced the exclusive AstraZeneca deal, the company said it would sell vaccines at no profit—but only during the pandemic. Johnson & Johnson’s pledge to earn no vaccine profit is similarly limited.
With financial information kept confidential, no one will be able to confirm whether the vaccines are truly being sold at cost. And if vaccine immunity is only temporary and endemic coronavirus strains require regular shots for years, the companies will make plenty of money down the road, critics say.
Under its deal with AstraZeneca, Oxford will receive no royalties during the pandemic but could make millions after it ends through a web of patents including those held by Vaccitech, a for-profit spinoff. Vaccitech’s ownership includes a 50% stake held directly or indirectly by Oxford and 5.25% each owned by Hill and Jenner’s other top vaccine scientist, Sarah Gilbert, U.K. regulatory filings show.
The potential for vaccine profits at Vaccitech was first reported by The Wall Street Journal.
Pharma company officials say that only decades of industry research could have made it even possible to produce a coronavirus vaccine at the present speed.
“The federal government cannot research, develop and manufacture vaccines and other new treatments on its own,” said Andrew Powaleny, a spokesperson for the Pharmaceutical Research and Manufacturers of America, a lobbying group. Large and early government investment “is a well-accepted approach to addressing public health crises,” he said.
Many argue that a health crisis is not the time to worry about overpaying for vaccines or backing some candidates that won’t deliver. Getting a good vaccine as quickly as possible requires spreading bets, they say.
“Spending some extra billions on vaccines is the right choice when human life is at stake and trillions in economic loss is at risk,” said Edward Scolnick, a top scientist at the Broad Institute and former head of research for Merck. He owns no stock in Merck or other pharma companies, he said.
Oxford backed off from its open-license pledge after the Gates Foundation urged it to find a big-company partner to get its vaccine to market.
“We went to Oxford and said, Hey, you’re doing brilliant work,” Bill Gates told reporters on June 3, a transcript shows. “But … you really need to team up.” The comments were first reported by Bloomberg.
AstraZeneca, one of the U.K.’s two major pharma companies, may have demanded an exclusive license in return for doing a deal, said Ken Shadlen, a professor at the London School of Economics and an authority on pharma patents—a theory supported by comments from CEO Soriot.
“I think IP [intellectual property, or exclusive patents] is a fundamental part of our industry and if you don’t protect IP, then essentially there is no incentive for anybody to innovate,” Soriot told the newspaper The Telegraph in May.
Some see the Gates Foundation, a heavy funder of Gavi, CEPI and many other vaccine projects, as supporting traditional patent rights for pharma companies.
“[Bill] Gates has staked out this outsized role in the vaccine world,” Love said. “He has an ideological belief that the intellectual property system is a wonderful mechanism that is necessary for innovation and prosperity.”
The Gates Foundation requires all its grantees to commit to making products “widely available at an affordable price,” a spokesperson said.
Oxford officials, including Hill and Gilbert, did not respond to requests for comment. AstraZeneca, for its part, would set a “reasonable” post-pandemic price and is “committed to ensure equitable access, globally” in the meantime, a spokesperson said. The company has signed deals with CEPI, Gavi and the Serum Institute of India to bring more than a billion doses to low- and middle-income countries, he said.
If nothing else, governments and vaccine makers should be open about their relationships, including making contracts public, said Duncan Matthews, a patent law professor at the Queen Mary University of London.
“We simply don’t know what’s in these deals,” he said. “The biopharma industry is applying old rules of commercial confidentiality in a situation that is unprecedented.”
KHN (Kaiser Health News) is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation) that is not affiliated with Kaiser Permanente.


fortune--2020-08-24--China has been vaccinating key workers with unapproved COVID-19 vaccines for weeks

China has been vaccinating key workers against COVID-19 since July 22, the country’s National Health Commission (NHC) revealed on Saturday. The NHC didn’t say which of the four Chinese vaccines currently in the final phase of clinical trials had been used, but claimed that, so far, there had been no adverse effects.
According to NHC director Zheng Zhongwei, immigration officials and medical staff are among the groups that have received the vaccine as “most cases in China now are imported, so border officials are a high-risk group.”
China has gone eight days with zero cases of local transmission as of Monday. The most recent major clusters of COVID-19—as well as the initial coronavirus outbreak in December—have been traced to wet markets, where consumers gather to buy fresh meat and vegetables.
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The government intends to extend emergency vaccinations to workers in the markets as well as people in the transport and service industries to create an “immunity barrier.”
“We’ve drawn up a series of plan packages, including medical consent forms, side-effects monitoring plans, rescuing plans, compensation plans, to make sure the emergency use is well regulated and monitored,” Zheng told state broadcaster CCTV.
Rushing a vaccine past the final stage of testing is risky. New vaccines require the close monitoring of tens of thousands of test subjects in order to detect rare side effects and to measure the vaccine’s effectiveness. But China is eager to prove it has the virus under control. Successful management of the disease and the development of an effective vaccine could offset accusations from Washington that Beijing is responsible for unleashing COVID-19.
Zheng didn’t say how many workers had received vaccinations nor how many more would, but the government is eager to increase immunity before winter, as it anticipates a possible resurgence of the virus in the cold months. Workers at some state-owned firms—particularly those who need to travel overseas—have been issued vaccines, too.
China’s military, the People’s Liberation Army (PLA), has also begun distributing vaccines to its personnel. China’s Central Military Commission gave the go-ahead in June to vaccinate soldiers with a jab developed by CanSino Biologics in partnership with the Academy of Military Medical Sciences. The vaccine had just completed Phase II trials when it was approved for military use.
The secrecy of China’s vaccine campaign hasn’t sat well with some foreign governments, however. Last week, Papua New Guinea denied entry to Chinese workers bound for a mine run by state-owned Metallurgical Corporation of China (MCC) after learning the staff had received unapproved vaccines.
“The government of Papua New Guniea demands and deserves to fully understand vaccine development and SARS-CoV-2 vaccine immunization program undertaken in China and its potential risks,” David Manning, Papua New Guinea’s head of disaster management, said.