fortune--2020-07-05--‘You can’t choose to walk away’: Black women detail their experiences with  racism in the workplace

How realtors are giving virtual home tours in the absence of open houses during the pandemic

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B. Zawde is an avid martial arts athlete. But if a member of her jiu jitsu club were to say or do something racist, she would leave.
That hypothetical decision is one that distinguishes the spaces where Zawde and other Americans pursue their hobbies or purchase goods and services from another place where many spend a significant portion of their time: at work.
According to a survey by Essence magazine released last month, 45% of Black women say the place they most often experience racism in their lives is, in fact, the workplace. An environment where people congregate not quite by choice or interest, where everyone faces pressure over their livelihoods and career ambitions, and where people from different backgrounds wind up working closely together is ripe for conflict—including racism.
Zawde, a 39-year-old member of the finance industry raised in the U.K., was one of several Black women to speak to Fortune about what makes the workplace such common stage for racist behavior (she asked to be identified by a first initial over concerns about possible retaliation). Her experiences include being passed over for promotions in favor of less experienced co-workers and having to start over at a new firm every few years as the only way to get ahead. “Repeatedly, once I get my foot in the door, I’m eight steps back,” says Zawde.
Thokozile Kachipande, a marketing and communications professional in her mid-40s, has had a similar experience throughout her career. “I definitely think I’ve missed out on opportunities to be nurtured in my career,” she says. Past bosses and managers couldn’t see their younger selves in her—blocking her from mentorship opportunities, she says. “If I were to go to a store or a restaurant and experience something that’s racist, I can choose to walk away,” she says. “The workplace is tied to your livelihood. You have to go there every day. You can’t choose to constantly walk away.”
Azizza Brinson, a 30-year-old public relations professional, often encounters microaggressions—or racist interactions that occur on an individual, rather than systemic, level—at work, like colleagues expecting her to know everything about all kinds of Black culture. Brinson and Kachipande both experienced another category of microaggressions: white co-workers whose treatment of their Black colleagues depended on either party’s romantic relationships. In Brinson’s case, co-workers often told her they were dating a Black person, she says. Kachipande says her white co-workers often spent more time getting to know her once they found out her husband is white—leading her to hide that fact from her colleagues, putting away family photos to ensure colleagues developed “authentic relationships” based on her.
Brinson says she eventually started to realize why her white co-workers kept subjecting her to these microaggressions: “Oh, you have only come into contact with so many Black people,” she remembers realizing. “You start to learn how they grew up.” For many of those co-workers, the workplace was the only place where they had “in-depth interactions with Black people,” she says.
As the term implies, microaggressions might at first seem limited in scope, but in reality they often have larger consequences. Ashley Bankhead, 28, was working as an account manager in Atlanta when a member of her company’s leadership team approached her and grabbed her hair, which was on top of her head in a puff. She told her manager about the incident; afterwards, the company leader who had violated that personal boundary “avoided [her] like the plague”—an outcome that could have hurt Bankhead’s progression at the organization.
“If I’m at a store and it’s a stranger [who touches my hair], they may literally not know better,” Bankhead says. “They may not have grown up around Black people and feel they’re curious. In a professional setting, that’s highly inappropriate. And if you’re in leadership—there are a lot of layers there.”
“Racism has prematurely ended a lot of careers,” says Minda Harts, author of The Memo: What Women of Color Need to Know to Secure a Seat at the Table. “A good day for me [in my former career] was when I’d only be racially aggressed once throughout my day.” Racism is a form of workplace harassment, Harts says, and should be handled like any other.
The dearth of Black people in leadership roles like the one held by Bankhead’s former colleague isn’t just an issue of diversity as a moral good, but sends employees a tangible message: “the chances of me being promoted into leadership here are low,” Bankhead says she realized.
Racquel Joseph, a 30-year-old employee in the tech industry, found out she was earning less than a new hire who she was managing; three weeks after she was promoted to match that person’s salary, she and her entire department were laid off.
“When I saw that gap, I realized how much my family and I were missing out on. Not only was I born into a family disadvantaged by a huge generational wealth gap,” she says. “But at the end of the day it doesn’t matter if I do everything right—this system was not built for me. You’re working within a racist system.”
The only other part of American life, Joseph notes, where racism has as much power over Black people’s lives? Policing and the criminal justice system—the focus of recent protests against racial injustice.
And just as protesters have made demands of their political leaders and of law enforcement, employees are increasingly making demands that their employers address issues of racism at work. Over the past month, companies have stated new financial commitments to racial justice causes, to hiring and promoting more Black workers, and to using their influence to create racial justice in society at large.
For Black workers who experience racism most often in the workplace, this corporate response may be new (and its longevity and effectiveness is yet to be determined)—but the problems it aims to address are anything but. “I didn’t wake up one day and say, oh crap, I’m Black. I have to worry about what I say and do in front of white people,” Joseph says. “This is something I’ve known since I was born.”


fortune--2020-07-05--How realtors are giving virtual home tours in the absence of open houses during the pandemic

The U.S. Constitution needs an overhaul .
Here ’ s how California can help

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“I’ve been doing this for 47 years,” says Tom MacDonald. “I started when something electronic was the acceptance of a contract with a telegram.”
MacDonald heads up his own realty group in California’s Central Valley, and like most realtors, his business in recent months is depending on technology more than ever before. Jurisdictions across the U.S. have responded to the coronavirus with an array of restrictions, including a total ban on traditional open houses in California.
So in the absence of baked-cookie scents and mingling strangers, MacDonald and other realtors are turning to tools that help them show off houses online. This allows for more immersion than was possible just a few years ago, and makes it easier and less expensive for realtors to put a property’s best foot forward.
These new tools include so-called “virtual staging,” in which images of a property have lifelike decor added to them digitally using 3D modeling and Photoshop. They also increasingly include digital walkthroughs of various kinds, verging on full-blown virtual reality. And while many serious buyers still want to see the property in person before signing on the dotted line, realtors and entrepreneurs believe the new marketing tools will stick around well after coronavirus pandemic is under control.
“Because a lot of open houses and conventional staging companies were not operational during the lockdown … we were actually busier,” says Young Kim, cofounder of Vancouver-based Bella Staging.
Bella specializes in virtual staging, the digital evolution of the common practice of temporarily redecorating a house to impress potential buyers. But instead of renting real furniture and hiring movers to haul it in, which can cost into the thousands of dollars, Bella adds furniture to photos of an empty house using digital wizardry. According to Kim, his team of designers and photo editors can virtually stage an entire house for under $100.
The decor in this room is almost entirely computer-generated—just one example of how technology is helping sell homes during the coronavirus pandemic. Bella Staging
That occasionally leads to confusion. “There’ve been times our clients have had offers on a property, and the buyers wanted the [virtual] furniture included,” says Kim—but for the most part, clients understand that virtual staging is an exercise of imagination. “We help paint the picture of what it can be.”
Another digital tool that has seen a surge in relevance is the virtual walkthrough, which gives potential buyers a more immersive sense of the space. At the very high end, those can be built as full-blown virtual reality experiences using a 3D-rendered simulation. But more common (and affordable) are walkthroughs created using 360-degree photos.
“It gives you a feel for the place. How big it is, what’s the layout,” says Bartek Drozdz, cofounder of Kuula, whose core product he describes as “like Powerpoint for virtual tours.” Users take their own photos, then use Kuula to arrange them into an immersive home-tour experience. (One downside is that Kuula doesn’t allow for the addition of virtual decor, instead capturing a house’s real-life appearance.)
Drozdz says he’s seen a significant uptick in interest and web traffic during the pandemic. But growth at Kuula was steady for years before the coronavirus hit, and Drozdz sees lockdowns as accelerating a longterm change in homebuying, rather than a temporary shift. That’s because of a simple reality: even in normal times, open houses aren’t always an efficient way to shop for a home.
“In L.A., with the traffic, you have to drive for an hour to see a house you don’t like the moment you walk in,” says Drozdz. While sites like Zillow have been shifting more of the homebuying process online for well over a decade, immersive experiences take that to the next level.
MacDonald agrees: “I think this will change longterm how homes are sold. People are becoming very comfortable with sitting in their living room, using their Apple TV to look at real estate.” MacDonald says most shoppers do still want to see their new home in person before committing to a purchase, but the new tools give added confidence to some, such as cross-country movers, who snap up properties without ever setting foot in them.
Thanks in part to these digital tools (but also a lot of help from record-low mortgage rates), the real estate business overall appears to be holding up during the pandemic. In May, according to the National Association of Realtors, contract signings were off just 5.1% compared to the year before. That’s a minor drop compared to many sectors of the economy.
In fact, with supplies tight, U.S. home prices have actually gone up on average in recent months. Combined with job losses and economic uncertainty, that might make it tough for some people to buy a new home, even as stay-at-home orders have highlighted the shortcomings of their current one.
“Almost everybody during this pandemic is learning how their space isn’t working for them,” says Sally Huang, who directs visual technologies for online home design community Houzz. The site offers an online visualization tool called “View in my Room 3D” that lets shoppers virtually check the size and style of furniture against their living space.
So whether you’re on the hunt for a new house to love, or trying to love the house you’re in, you can do more of that work online than ever before.
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fortune--2020-07-05--The case for going all-in on remote work

Over the past few weeks, high-profile companies, including Twitter, Facebook, and Nationwide, made headlines by announcing new policies that make remote work more available to their workforce. But conspicuously absent from the conversation is an important distinction: the difference between partially remote and fully remote organizations.
Couched in each of the announcements are acknowledgements that the office isn’t fully going away. It is being reprioritized. While the bold decisions to create remote arrangements are welcome changes, to date no well-known company has announced plans to abandon the office entirely. Rather, many are scaling back the office presence or scaling up remote options. Choosing neither fully remote nor fully co-located, these companies have instead opted to negotiate a new balance between the two.
I want to highlight a different option, one that’s received far less attention: going all-in on remote.
InVision, where I’m the chief marketing officer, has been a fully remote company since its founding in 2011. (We call it “fully distributed.”) Our 700 employees are scattered from Seattle to Singapore with no offices anywhere, save for a smattering of coworking spaces, dinghies in a sea of home offices. The lack of a central office and the fact that the entire staff works from anywhere are defining traits of InVision, a digital product design and development software company.
The distinction between partially remote and fully remote is an important one, because the experience between the two is radically different.
As many will have experienced in light of the COVID-19 pandemic, when remote workers are “in it together,” there is a camaraderie and shared understanding that emerges. Friendships develop. Both the benefits of remote work and the challenges inherent in it are experienced by the entire staff. People use the same tools and commit to following the same processes. This can create an equal playing field for all employees and becomes an integral part of the culture that binds people together—despite the distance.
When part of that team moves back to the office, and others stay remote, the experiences diverge.
Some meetings happen in an office; others happen virtually. Perks and benefits apply to one cohort but not another. Processes that should be followed by everyone are unevenly respected. Relationships become divided based on who’s in an office and who’s not. Over time, these differences tend to concretize, revealing the ultimate danger in partially remote workforces: the creation of essentially two different organizations.
One InVision employee, in an interview for a book on remote work we published earlier this year, described her previous experience of working in a partially remote company as “souring” her perspective on remote work entirely. “Even as considerate and thoughtful as they were to ensure remote workers felt included…there was just an inequality of access.”
Of course, fully remote organizations have their own challenges. One of the reasons InVision has maintained coworking spaces in different cities is because in more normal times, there are employees who cannot or choose not to work from home. When InVision began to scale, teammates reported a lack of cohesion, spurring the creation of an annual offsite starting in 2017. It’s since become an important cultural event at the company, and we view its significant time and cost investments as crucial to our employees. We have also found that smaller team offsites provide necessary in-person opportunities to align and build trust.
The difference is that partially remote companies have to solve these same challenges—how to keep people motivated, engaged, and aligned—while also addressing new ones created by the uncertainty and confusion of having a portion of the team working in an office and a portion working from home.
So what is the argument for going all-in on remote work, as opposed to scrapping the idea entirely and returning to the office? Many of the benefits are already well-known to business leaders. Remote workers report better job satisfaction, reduced burnout, and an improved sense of work/life balance. We know that remote work increases employee productivity by as much as 50%. There are the cost savings that come from not maintaining office space. Companies can hire anyone, regardless of location—a key antidote to the growing “talent crunch” problem, which, according to a 2019 Gartner survey of senior executives, is a top risk organizations face today.
But there are also new arguments to be made in the aftermath of the current crisis.
Even as more businesses return to the office, it’s unclear what the situation will look like. Do you stagger working hours? Expand to new space to allow more distance between workers? Do you test people entering the building for coronavirus symptoms? Do you offer additional incentives or higher pay for those willing to go into a physical office? If you’re on a corporate COVID-19 task force, perhaps you’re struggling with some of these very questions right now. Every business leader will soon have to answer them, even if only part of the workforce returns to the office.
While companies returning to the office struggle to achieve a new normal, organizations that go all-in on remote work will be free to focus on realizing the full range of options in their remote transformation. These kinds of dramatic shifts in workplace dynamics can serve as a powerful forcing function for digital transformation. Free from the overhead of an office, remote-first companies will have more flexibility to design a better, more efficient, and resilient workforce than what existed before—leading to unexpected business opportunities.
Undoubtedly, most businesses will decide to return to the office. After a period of adjustment, a new normal will set in. If people work together to problem-solve their way back into the office collaboratively and transparently, that new normal should be a healthy and a happy one, renewed by a deeper appreciation for what it means to be together after spending so much time apart.
But there will be other businesses that decide it does not make sense to return to the office. Perhaps they’ve learned that their biggest concern—whether their employees could be productive working remotely—was satisfied.
To these companies, we encourage them to consider the option of going all-in. While the journey to becoming a fully remote company will be challenging, the opportunities are immense for both the business and your teams. The companies that embrace this new reality to its fullest—those that commit to learn, test, and iterate their approach until they find what works—will be the ones best poised for resilience, and to reap the benefits of digital transformation.
Brian Kardon is CMO of InVision.


fortune--2020-07-05--Companies emphasizing their commitments to fight climate change was so 2019

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Just as 2020 seemed like it might be a breakthrough year for corporations looking to combat climate change, the novel coronavirus emerged.
Back in September, Time published a special climate issue titled “2050: How Earth Survived,” calling out the fossil-fuel industry and foreshadowing drastic changes and consequences the world would have to embrace to avoid catastrophe. In January, teen climate activist Greta Thunberg lectured United Nations leaders about greenhouse gas emissions after sailing across the Atlantic Ocean. That same month, BlackRock Inc.’s Larry Fink pushed environmental issues to the top of Wall Street’s agenda.
But by the time March came around, corporate leaders were more concerned with talk of virus testing, ventilators—and financial survival.
So sudden was the shift that a Bloomberg analysis of Standard & Poor’s 500 companies found climate change-related discussions dropped 50% during first-quarter earnings calls, compared with those for the previous quarter. Conversations about liquidity, cash flow and debt payments dominated, with many executives forced to take extraordinary measures to keep their businesses afloat in a suddenly devastated global economy.
“Over the last two years, climate talk had been steadily going up,” said Bill Weihl, who heads Climate Voice, an initiative designed to get companies to go “all in” on climate. The pandemic brought much of that to a halt.
Bloomberg analyzed mentions of climate change and related terms across all companies of the S&P 500 that held earnings calls for the first calendar quarter of 2019 through the first quarter of 2020. Companies were considered to have discussed climate change if they spoke about at least one of the search terms during the calls.
Discussions about the accelerating climate crisis dropped for every industry in the S&P 500. Executives at energy companies—crucial to any transition to renewable sources—mentioned climate change 58% fewer times than they did during fourth-quarter earnings calls with shareholders and analysts. Technology companies saw a 53% fall-off, and even worse were financial-services companies, where the drop was 69%.
Companies goes quiet
Robert Swan, chief executive officer of Intel Corp., the world’s biggest chipmaker, said in his company’s fourth quarter 2019 earnings call that “it’s important to us to be a leader in environmental sustainability, and we’re investing to continue to increase the energy efficiency of our operations and our products.” But during Intel’s first-quarter call this year, there was no mention of the environment. “Intel is committed to accelerating access to technology that can combat the current pandemic and enable new technology and scientific discovery to better prepare society for future crises,” Swan said.
To be sure, future crises could be climate-related, but the company didn’t get specific.
Hikmet Ersek, CEO of Western Union Co., one of the largest U.S. providers of money-transfer services, was discussing the company’s plan to reduce greenhouse gas emissions during its fourth quarter earnings call. Flash forward to the company’s first-quarter call, during which Ersek spoke of a different type of environment: the “market environment impacted by Covid-19.”
Executives for oil and gas companies such as ConocoPhillips, Diamondback and Phillips 66 touted their energy transition goals earlier this year. In early February, ConocoPhillips CEO Ryan Lance said it was “imperative” that the fossil fuel giant take a leadership role in environmental, social and governance matters. By April, the language on the call shifted to production cuts, liquidity and demand.
“What’s been front and center has been the extreme volatility and carnage that’s occurred in the energy sector,” said Jennifer Rowland, an energy analyst at Edward Jones. “Some of these companies are still in survivor mode, never mind thinking about the energy transition over the next decade. The whole sector has been forced to think in the short term right now, and they don’t really have the luxury of being long-term focused at this particular moment, given the extreme dislocations that have occurred.”
What may be surprising however are the industries that managed to keep global warming front-of-mind during coronavirus-dominated calls. Sustainability talk in the utility sector did decline in the first quarter, but only by 31%. The drop at industrial companies was just 10%, Bloomberg’s analysis found.
Utilities—specifically electric companies—face a reckoning for their role in climate change-related disasters, such as the 2018 Camp Fire in California that killed 85 people. PG&E Corp. recently pleaded guilty to involuntary manslaughter for its role in sparking the wildfire.
For another California-based electric utility, climate change has remained at the forefront of conversations throughout the crisis. On Edison International’s most recent earnings call, CEO Pedro J. Pizarro said the company remains committed to its focus on clean energy.
He went on to discuss Edison’s strategy to “combat the climate change that catalyzes extreme weather events and exacerbates wildfires.”
Celia Cazayoux, a senior investment strategist at People’s United Advisors, said that any downturn in corporate emphasis on climate crisis is only temporary. “The trend and the growth of paying attention to ESG factors is going to continue, despite what the numbers were in some of these calls.”


fortune--2020-07-06--Brightland’s CEO on bootstrapping a new company and readjusting your mindset

We need more leaders like George Marshall—in both politics and business

This is an installment in a special series, Startup Year One, interviewing startup founders about the major lessons they learned in the immediate aftermath of their business’s first year of operation.
Aishwarya Iyer and her family emigrated from India to the U.S. when she was just 6 months old in the 1980s, and she grew up mostly in Houston. Iyer says she was expected to become a doctor, engineer, or a lawyer—but she was intent on breaking molds.
Iyer attended New York University, studying at the Gallatin School of Individualized Study. She started her career at L’Oréal, under the Lancôme brand, and has worked at a number of venture-backed startups in communications and public affairs.
Iyer has since launched her own company, Brightland, a handcrafted extra virgin olive oil brand.
Fortune recently spoke with Iyer to learn more about the startup’s first year in business, the lessons learned, the hurdles overcome, and plans for the next year.
The following interview has been condensed and lightly edited for clarity.
Aishwarya Iyer, CEO of Brightland. Photograph courtesy of Brightland
Fortune: Olive oil is one of those kitchen staples that virtually everyone has, but it’s not necessarily a business everyone can get into. Much like wine, it has a history of being associated with family-owned producers. What inspired the launch of Brightland? And how does it stand apart from what else is already on the market?
Iyer: When I met my partner in New York City in 2014 and started cooking meals at home, we both found ourselves left with consistent, uncomfortable stomach pain. After cutting out the obvious culprits like bread, cheese, even spices, the only constant left was olive oil. The discovery inspired some research where I quickly discovered that nearly 70% of olive oil Americans consume is already rotten or rancid due to a fraud-ridden industry with little to no transparency. I was determined to shine light on the dark industry.
So I pivoted careers and set out to create a bold, elevated, and traceable solution to pantry staples, beginning with olive oil. I moved to Los Angeles, and researched the domestic olive oil industry that is burgeoning here in California.
Brightland officially launched in 2018. We partner with family farms that practice organic practices, pay fair wages, and are crafting fresh extra virgin olive oil. We also made a conscious decision to focus on design; our bottles do not look like traditional olive oils. Now we are in the process of launching our first category outside of olive oil, and we are applying the same framework around sourcing, finding the right nutrient-dense farm partner, using fresh fruit, and incorporating design into everything we put out into the world.
Brightland hand-sources its olives from a single-estate California farm, then crafts them into custom-blended oils. Courtesy of Brightland
As founder and CEO of your own brand, what does an average day look like for you?
We are a very small team, and right now we are all fortunate to be able to be remote working from our homes. We do not have Slack, by design, and it is a decision I made early on, after working at companies that clearly did not understand boundaries. I decided that I would hold off on implementing Slack as a workplace tool for as long as possible. So we pick up the phone and call each other, or we send emails.
A typical day could be reviewing editorial and social content, discussing product road maps, inventory projections, and timelines with our operations lead, looking at our [profit and loss] and budgets, DM-ing with customers on social, jumping on calls with brand partners, reviewing new site design and dev edits, and of course, recipe and product testing before we are about to launch something new.
What were some of the biggest hurdles you faced in the first year of business? What surprised you the most?
I bootstrapped the company for the first 12 months and did not take any outside capital—zero friends and family, angels, etc.—so we had to be incredibly scrappy with everything from creative and marketing to inventory planning and cash flow. I thought that would be the most challenging part of the business, but it was actually my mind.
I had to stop thinking from a “scarcity” mindset to an “abundance” mindset, and that was a huge shift that was quite challenging—and continues to be challenging when you’re surrounded by the incessant noise, especially on social media. It’s incredibly important for an entrepreneur to live in the abundance mindset, because that is when you can make decisions that are positive, optimistic, and fit your values. Operating from a place of scarcity leads to short-term, panicked, FOMO thinking, and decision making that ultimately hurts the brand and business. It’s exhausting for the entrepreneur to be coming from that place.
As the pandemic continues, the outlook for retail is only looking more dire, but grocery is typically recession-proof space. Still, Brightland might be regarded as more of a premium product for consumers. Does Brightland plan to adjust its business plan for the immediate future?
We have always been a [direct-to-consumer]-first business with strategic retail partners who we work with. When COVID started, we lost some large [purchase orders] from a few retail partners, but we saw a spike on our DTC channel. Since people are at home and cooking more, we introduced a digital content series called “On the Bright Side,” where we have been hosting cooking episodes, Q&As with experts in wine, cheese, tea, etc., and live watercolor paintings, to serve as a place for some positivity and calming content.
The Duo collection: Awake and Alive come in 375-milliliter glass bottles that have been UV-coated to protect the olive oil from damaging light. Courtesy of Brightland
At the same time, how has the economic shutdown affected the future of the business, from product development to raising capital?
The shutdown has slowed things down for us internally. In some ways, it has allowed us to truly focus, and in other ways, everything in our supply chain is slower. We are working on three new products right now. Getting samples, working with our partners, farms, and vendors, and liaising as a remote team have definitely slowed down the usual sprinting process.
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 Brightland and what do you want the business to look like five years from now?
Before we become a larger organization, we want to set some foundations. We are actively building an intersectional environmentalism framework that will apply to all Brightland hiring, creative, partnerships, editorial, alliance and overall business strategy. Intersectional environmentalism is an inclusive version of environmentalism that advocates for both the protection of people and the planet. We have been so inspired by the work of Leah Thomas, an intersectional environmental activist who officially coined the term.
We have also been championing the concept of analog versus digital. I firmly believe that we are all way too addicted to our phones. So as a brand, we always encourage our customers and community to take a step back, spend time in their kitchens without devices, and savor simple, everyday moments at home.


fortune--2020-07-06--Investors sink shares in online retailer Boohoo on reports of labor abuses in its supply chain

Boohoo Group Plc shares plunged after a report in the Sunday Times about poor working conditions at a factory the newspaper described as a supplier of the U.K. online fashion retailer.
Boohoo said it will review its supply chain after the report, which focused on a garment workshop in Leicester, England, the site of a recent flareup in coronavirus infections. The shares fell as much as 12% early Monday in London even as the FTSE and European equities soared.
The Sunday Times said an undercover reporter worked at the factory, where social-distancing measures weren’t being observed and employees were paid 3.50 pounds ($4.40) an hour, less than half the minimum wage. The newspaper said the reporter was helping pack boxes of Boohoo’s Nasty Gal line.
Online clothing retail has boomed as the pandemic has spurred a surge in e-commerce. Boohoo shares have gained more than 70% in the past year.
Boohoo said the factory isn’t an official supplier, and it suspects another company is occupying the facilities. While the location has a sign with the name Jaswal Fashions, that company went out of business, according to Boohoo.
Reviewing Suppliers
The online retailer said it will review its relationship with any garment supplier that may be subcontracting at the factory, and it will stop business with any company that doesn’t adhere to the letter or spirit of its code of conduct.
Boohoo should hire lawyers and advisers to conduct an independent inquiry, wrote Wayne Brown, an analyst at Liberum.
“The response from Boohoo does not go far enough,” said the analyst, who cut his price target on the stock 30% to 350 pence. “The statement only really speaks of investigating the particular factory in question and raises the question of how many other breaches management is potentially unaware of.”
The Guardian said last week that suppliers in Leicester weren’t imposing distancing measures to protect the health of garment workers against Covid-19 despite the local lockdown.
Health Secretary Matt Hancock has said the government is prepared to shut down businesses not complying with lockdown restrictions in Leicester.
Boohoo Chief Executive Officer John Lyttle has been supervising health measures in its biggest suppliers via video calls and written communications due to virus-related limitations, said a spokesperson for the company.


fortune--2020-07-06--We need more leaders like George Marshall—in both politics and business

Investors sink shares in online retailer Boohoo on reports of labor abuses in its supply chain

Good morning.
I used the July 4th weekend to finish David Roll’s masterful biography of George Marshall. It’s 600 pages long, but well worth the investment for any serious student of leadership. Marshall was the master at taming his own emotions and ambitions in service of the greater good, both as a military leader and as Secretary of State and Defense. In doing so, he was able to become a principal architect—perhaps the principal architect—of the post-World War II world. After reading Roll’s carefully researched book, it doesn’t feel hyperbolic to hear late Harvard President James Conant call him “a soldier and statesman whose ability and character brook only one comparison in the history of this nation”—George Washington.
So it was dismaying—if not entirely surprising—to learn that President Trump had proposed Generals MacArthur and Patton—but not Marshall (or Eisenhower) for his garden of heroes. The former were undeniably great generals; but the latter were also great men, and exemplars of the notion of servant leadership. Regular readers know we try to avoid politics in this newsletter. But we believe deeply that leadership matters—perhaps now more than ever—and crave more like Marshall in both business and politics.
Since CEO Daily was dark Friday, some feedback this morning, also on leadership. Our report on last week’s Fortune and McKinsey CEO discussion, focusing on the importance of purpose in today’s business, provoked some cynicism, as usual.
“If any of the sentiments these CEOs shared in your call yesterday are real, then I have the answer: change the primary purpose of your business to be the holistic fulfillment of the people involved (as opposed to profit)—Anything short of that is simply lip-service that will last until the end of this news cycle.” —DT
“I don’t want to come across as too cynical because I do think some CEOs really do believe what they’re saying about stakeholders over shareholders, and others probably at least half believe what they’re saying, BUT how much has the CEO-to-worker compensation ratio increased at their companies over the past 30-40 years, or even the past decade, or even during their tenures as CEO?” —CL
But at least some readers see emerging evidence of a real change in business leadership—a view I share.
“Without romanticizing their sentiments too much, it’s nice to see such expressions that are from them as individuals, rather than from an obligated media post. It’s hard for me as a recent grad to find good role models in the business world at this time, so thank you for shedding some light!” —AS
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS Chinese market surge The Shanghai Composite Index is back at its highest point since February, 2018—a surge analysts say has likely been helped by the state's emphasis on the importance of a "healthy bull market." If that market surge has found hope that the country's economy is rebounding, its also found plenty to ignore—within China and beyond. Lockdowns are coming back to parts of Spain and Australia. Meanwhile, Texas is struggling with a surge in cases, and the world at large broke a new record for new COVID-19 cases over the weekend, according to the WHO. NBC Airborn COVID-19 The WHO has maintained that coronavirus is spread by large droplets, expelled by coughs or sneezes, that quickly fall to the floor. But a growing raft of scientists—239 in 32 countries—are pushing for official acknowledgement of the growing evidence that the virus is less likely to be transmitted by surfaces, and is instead airborne: hanging in the air for longer, and potentially requiring masks to be worn indoors even if people are socially distanced. New York Times Buffett's next deal Warren Buffett's Berkshire Hathaway has made its biggest deal in four years, scooping up Dominion Energy's natural gas pipeline and storage assets, for $4 billion, along with the assumption of $5.7 billion in debt. It represents Buffett's push further into the energy sector, just as the industry is shedding assets, battered by low prices and emissions targets. Fortune Uber and Postmates Uber is expected to announce a $2.65 billion all-stock takeover of food delivery service Postmates this morning, as the take-out battle continues. The takeover is expected to help Uber gain ground on the U.S. market leader, DoorDash, and comes on the heels of the company's failed bid to acquire GrubHub (that got scooped up by the Netherlands' Takeaway Just Eat.) Fortune AROUND THE WATER COOLER Covid-19's long road An investigation by the Sunday Times builds on leads that COVID-19 originated in bat caves near the southern Chinese city of Kunming, where Chinese researchers traced the deaths of a group of men who had worked on a mining project from a mysterious, SARS-like respiratory illness, and sent a sample back to a lab in Wuhan seven years ago. But there was little transparency in the ensuing years over the men's deaths, or what caused them. Sunday Times Hong Kong emigrants Since Beijing introduced its new national security law for Hong Kong in May, thousands of the city's residents have applied for foreign immigration documents. The city already has a huge number of dual passport holders, and other countries—including the U.K., Japan and Australia—are also preparing to receive new residents, adding to a history of mass migration from the city, Fortune's Grady McGregor writes. Fortune Gen Z The legacy of the financial crisis a decade ago means Gen Z is bearing the brunt of the economic crisis tied to COVID-19, with unemployment surging. In Australia, for example, young people are facing particularly high levels of unemployment, while falling between the cracks of government stimulus because of casual contracts, which hit the youngest hardest. Fortune Audit the auditors? The fall of German payments company Wirecard, and questions about how it was audited, has raised larger questions: is it time to audit the auditors? Wirecard isn't the first case: there are similarities with the combustion of Parmalat, an Italian dairy company that was also claiming it had billions which didn't exist. FT This edition of CEO Daily was edited by Katherine Dunn.


fortune--2020-07-06--China makes a bullish call on the markets, and global stocks take off

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, Bull Sheeters. It’s a risk-on Monday with Asia, Europe and U.S. futures all soaring. China is very bullish on its second-half recovery, and in the capital markets—for investors, that’s enough to drown out weak data elsewhere, plus bearish forecasts and new global records in coronavirus cases.
Let’s see where investors are putting their money.
Markets update
Asia
The major Asia indexes are soaring in afternoon trade, with Shanghai up more than 5% .
up more than . Investors in mainland China and Hong Kong are seeing their best day in over a year as the influential state-run China Securities Journal turned bullish on “the wealth effect of the capital markets.” That enthusiasm is lifting global markets.
in mainland China and Hong Kong are seeing their in as the influential state-run China Securities Journal turned bullish on “the wealth effect of the capital markets.” That enthusiasm is lifting global markets. Alas, the coronavirus crisis is worsening, as the WHO this weekend reported a new record daily tally (212,000) led by Brazil, India and the United States.
Europe
The European bourses jumped out of the gates, with the benchmark Stoxx Europe 600 up 1.7% .
jumped out of the gates, with the benchmark up . The U.K. is now expected to phase Huawei out of its 5G buildout plans as soon as this year, a remarkable about-face by Boris Johnson’s government.
is now expected to phase out of its as soon as this year, a remarkable about-face by Boris Johnson’s government. The closely watched German factory order numbers came in below estimates this morning, suggesting the rebound could be a bit more protracted than first hoped.
U.S.
The major U.S. indexes appear set to extend last week’s impressive gains as futures all point more than 1% higher . That’s despite Goldman Sachs again lowering its U.S. GDP forecast, now seeing a full-year 4.6% contraction (vs. -4.2%, previously.)
. That’s despite again lowering its U.S. GDP forecast, now seeing a full-year (vs. -4.2%, previously.) M&A is back on… Uber Technologies is expected to announce today its purchase of Postmates in a $2.65 billion all-stock takeover , setting up a food fight with privately-held Door Dash in the U.S. meals-delivery market.
on… Uber Technologies is expected to announce today its purchase of Postmates in a , setting up a food fight with privately-held Door Dash in the U.S. meals-delivery market. Warren Buffett’s Berkshire Hathaway Inc. is finally putting its mammoth cash pile to work, buying Dominion Energy Inc.’s natural gas pipeline and storage assets for $10 billion. Dominion had just bailed out of a pipeline deal as it seeks to reach net-zero emissions by 2050.
Elsewhere
Gold is down.
is down. As is the dollar .
. Crude is up, tracking in line with equities.
The view from the C-suite
Today’s markets surge is yet another indicator that investors will run with the good news (in this case, from Chinese state media on a China 2H bounce) and shrug off the bad (Goldman’s U.S. downgrade from over the weekend).
So let’s dig into the “good news” this morning. Last week, Deloitte published its latest COVID-themed CFO survey, and the chief finance suite sees reason for optimism as the economy reopens. (A note: the poll, involving 118 large North American companies, is from mid-June, before the latest record daily surges in the U.S. South and West, but it’s still worth parsing the numbers.)
Nearly 20% of CFOs polled by Deloitte say they are already at or above pre-crisis operating levels, and another 12% expect to reach this milestone by the end of this year. That would mean roughly one-third of companies back to normal (or just about) by year-end. As the Deloitte chart below shows, at this stage, companies have bounced back faster than they thought would be the case back in April. That’s encouraging.
The less encouraging news is that this is an extremely uneven recovery. In sectors such as retail, financial services and manufacturing, the majority of CFOs don’t expect to be at or near pre-crisis levels before next year. And, 17% of all CFOs polled said they won’t reach that level before Q1 2022.
CFOs are a conservative lot. Still, these surveys are a helpful indicator to gauge sentiment inside Corporate America. And while it’s not great news, it is showing an improvement in sentiment.
But does that improved sentiment warrant such a rally in equities?
CFOs aren’t convinced, as the next Deloitte chart shows:
Nearly seven out of ten CFOs say equity markets are either “overvalued” or “very overvalued.”
The S&P has climbed a further 2% since this poll was conducted.
***
Postscript
Not all Italians go to mass on Sunday. For a hearty few, it’s the bicycle that brings them closer to a state of grace.
Here, in little Amandola, every Sunday morning cyclists fill the town square at 8 a.m., just outside Bar Belli’s red brick facade. The cyclists then split up. The mountain bikers head up into the mountains. The road bikers descend into the valleys. It’s a remarkable scene of young and old, men and women, guys and girls. There’s also a lot of brightly colored bikes, and skin-tight attire.
The region where Amandola can be found, Le Marche, decided this year to promote cicloturismo—cycling tourism (do yourself a favor: at some point, click this link and escape for 2-minute-48-seconds)—a green, low-impact, pedal-from-medieval-hilltown-to-hilltown message to attract tourists. It was a genius idea: there’s so much history, beauty and good food around every bend, that they figured the best way to discover most of these gems was to tell people: take it slow, and discover it at your own pace—preferably, on two wheels.
What they conveniently left out was: some of these hills will knock you out.
A few years ago, I went for a short spin in the valley below my house. I wasn’t in tip-top shape, and when I finally peddled back into the garden I nearly fell over with exhaustion. I grabbed my water bottle and chugged what little was left.
“Where’d you go?,” a voice asked from the shade. It was Fiore, my elderly neighbor. I caught my breath. “Around here,” I replied. I was knackered, but the details of my ride energized him. Fiore just turned 97. In his teens, he was an avid cyclist. He knows every back road and navigable track around here like he knows his pockets.
Under that shady oak, he recounted a story I don’t think I’ll ever forget.
He was a teenager just as Italy was entering World War II. At the height of the war years, Mussolini wanted every fit male in the land to go and fight for the glory of some destructive vision. Fiore wanted none of it. He wasn’t a fighter. Cycling was his thing, not guns. Whenever he had the chance, he’d get on his bike and ride for hours—all day, rain or shine. As the recruitment drive was picking up, Fiore’s dad devised a plan to foil Mussolini. It all came down to, he told me, a girdle.
“A girdle?!,” I jumped in. “Did you say….?”… Si, he nodded. He’d draw tight (with some help) the girdle around his mid-section, and then hop on his bike. He’d go uphill and downhill. And uphill again. For hours on end. Every day he’d do this. The plan was to ride so many kilometers with that tight-fitting girdle it would transform his appearance, creating an hourglass physique that would force the recruitment office to reject him for military service.
War recruiters are funny about the upper body, apparently.
Fiore so wanted to stay off the battleground that he’d cycle distances on his pre-war bike that I can’t even fathom. He’d make it a good half-way to the sea, or climb straight up into the mountains. He became obsessed. It was hard to know what was his real aim: to achieve some new personal best, or to pull one over on Mussolini.
“Did it work?,” I asked. “Did they make you go to war?”
“They wouldn’t take me,” he said with a grin.
He was done talking. “Tell me about your ride.”
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
If you were to assemble the people who could help you truly understand health care and how it’s affected businesses today, who would you pick? Here’s a few on Fortune’s list:
The CEOs and presidents of healthcare giants Johnson & Johnson, Moderna, Novartis, Aetna
Johnson & Johnson, Moderna, Novartis, Aetna co-discoverer of CRISPR-Cas9 Dr. Jennifer Doudna
Dr. Jennifer Doudna Dean of Stanford Medicine Dr. Lloyd Minor
Dr. Lloyd Minor chief medical officers from IBM, Verily, Google Health
from IBM, Verily, Google Health healthcare venture capitalists like Sue Siegel
like Sue Siegel Thrive Global CEO Arianna Huffington
Arianna Huffington CEO of REFORM Alliance Van Jones
Van Jones NBA Commissioner Adam Silver
Hear from them and more at FORTUNE Brainstorm Health, our virtual health-care conference on July 7-8. As a newsletter subscriber, you’re invited to use this code—BSH20HALF!—and get half off.
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
On stocks and politics. A little recap on 2020: the S&P 500 crashed in Q1 and soared in Q2. Why then is that bad news for Donald Trump and the Republicans? Fortune's Jen Wieczner explains.
Back to full employment. Thursday's stellar jobs report should be taken with a big pinch of salt. This was the equivalent of low-hanging fruit—easy gains, in other words. It will take years to get back to pre-COVID employment levels. That's significant as full economic recovery won't happen until we get near those numbers, Fortune's Shawn Tully explains.
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Market candy
101 greatest things
I haven't been back home to the U.S. in over a year, and so reading this list got me really homesick. What's the list? For the 4th of July weekend, The Fortune staff put together the semi-annual "101 Great Things About America" rundown. Let me know what we left out.


fortune--2020-07-06--Legacy of global financial crisis means Gen Z is hardest hit by the COVID economy

Already scarred by the global financial crisis a decade ago, a generation of younger people is bearing the economic brunt of the coronavirus. Even billions of dollars in global fiscal stimulus is struggling to cushion the blow as the pandemic worsens generational inequality.
Take Australia as an example. Despite a A$260 billion ($180 billion) injection of financial and economic support, unemployment among 15 to 24-year-olds has surged to 16.1%, compared to about 5.5% for those over 25. That’s in a country that hasn’t seen a recession since the 1990s and is in the vanguard of nations containing the virus.
About a quarter of younger workers aren’t eligible for the Australian government’s flagship wage subsidy package because they are on casual contracts and haven’t been employed for 12 months, according to Catherine Birch, a senior economist at Australia & New Zealand Banking Group Ltd. That compares to just 6.5% for all other age groups.
Elliot Matthews, 21, is one of the unlucky ones. In April, when he learned there’d be no more shifts at the Sydney hotel where he worked, he was just two weeks short of a year’s employment. “That’s a very hard window to fit into,” Matthews said of the government requirement. “While it’s a dark time for everyone, a lot of people are falling through the cracks.”
It’s far from just an Australian story.
As the pandemic drags on, it’s exposing generational fault-lines that were set in train a decade ago when the financial crisis hit Millennials hard and left Generation Z — described by Pew Research as those born after 1996 — with a legacy of insecure work and stunted opportunities.
Across the west, seemingly regardless of the fiscal support, the youngest workers are more likely to be out of a job.
Generational inequality in Australia has long been an issue. Youth unemployment hovered above 12% pre-Covid, higher than in the U.S., the U.K., Singapore, Japan and Hong Kong, according to the World Bank. Home ownership among young Australians is at an all-time low after prices surged beyond their reach — pushed higher in part by generous tax breaks enjoyed mostly by older Australians on their investment properties.
As the coronavirus tips the economy into its first recession in almost 30 years, those issues will be compounded.
“Substantial, targeted, ongoing support, additional to current policies, are needed to ensure young people aren’t left behind,” Birch said. “The labor market for young people is more precarious going into the current shock than it was pre-global financial crisis.”
It’s a similar picture elsewhere.
In the U.K., one-third of 18 to 24-year-old employees, excluding students, have lost jobs or been furloughed, compared to less than 15% of 35 to 44-year-olds, according to research from the Resolution Foundation think tank. Those in atypical jobs, such as zero-hour or temporary contracts, fare much worse. To qualify for Britain’s job support program you just had to be employed on or before March 19.
The casualization of so many jobs for Generation Z has its roots in the last financial crisis. Many entry-level roles were cut and never returned, forcing young people to stay in industries like retail or hospitality for far longer than previous generations, according to Shirley Jackson, a research economist at Per Capita, an Australian think tank that explores issues of inequality.
Going into the pandemic, more than 18% of Australian 15 to 24-year-olds were classed as “underemployed,” more than double the rate of any other age group in Australia and 7 percentage points higher than in 2008, according to Birch. That compares to 12% in the U.K., according to the nearest comparable data from the International Labour Organization.
“The narrative is that we don’t work as hard as our parents, we complain more than they ever did and that we waste our money on silly things,” said 25-year-old Greens Senator Jordon Steele-John, Australia’s youngest sitting member of Parliament. “There are far more people seeking to work than there are jobs for us.”
The crisis, and the Australian government’s response, also risks widening the wealth gap. Australian homeowners, for example, can apply to defer their mortgage payments under a huge program in place for at least another three months.
The temporary moratorium on evicting renters expired in mid-June in the most-populous state of New South Wales and they have largely been left to negotiate with landlords on their own.
“In these kinds of crises, we find out what is already broken,” Tenants’ Union Chief Executive Officer Leo Patterson Ross said. “This will increase the inequality already there between those who own property and those who don’t.”
Another option for those in dire straits is to access their pension savings. Normally near untouchable until retirement, the government has eased the rules on early access. There isn’t comprehensive data on just who is accessing the money, but signs are emerging of the young cleaning out meager pots.
Australia’s Minister for Youth Richard Colbeck, 62, declined a request for an interview. In an emailed statement, a spokesman said the government is “aware young Australians are very concerned about their employment prospects”. He pointed to pre-Covid training initiatives “focused on giving young Australians the right assistance and encouragement to learn new skills, become job ready, get a job and stay in a job.”
Matthews said that he’s been able to live with his parents and now that the economy is opening up, he’s managed to pick up a couple of shifts at a restaurant he worked at previously. Still, he’s aware how vulnerable his generation is.
“I’m not really future-proof at the moment,” he said. “I don’t have a lot of savings to fall back on.”
Jackson, the economist, put it more bluntly: “Generational scarring -– leaving young people outside the labor market for long periods of time — makes them less likely to get better jobs in the future,” he said. “It’s a ticking time bomb.”


fortune--2020-07-06--Uber is buying Postmates in a $2.65 billion all-stock deal

Uber Technologies Inc. has agreed to acquire Postmates Inc. in a $2.65 billion all-stock takeover expected to be announced as soon as Monday morning in the U.S., according to people familiar with the matter.
Uber Eats head Pierre-Dimitri Gore-Coty is expected to continue to run Uber’s combined delivery business, according to a person who asked not to be identified discussing a private deal. It is not immediately clear what role, if any, Postmates Chief Executive Officer Bastian Lehmann will take up following the acquisition.
The takeover would help Uber gain ground against privately-held DoorDash Inc., the current market leader in U.S. food delivery. While Postmates hasn’t kept pace with DoorDash, it maintains a strong position in Los Angeles and the American Southwest, both of which could be valuable to Uber Eats.
Representatives for Uber and Postmates declined to comment.
The move for Postmates comes on the heels of Uber’s failed bid to acquire publicly traded GrubHub Inc., which was scooped up by Europe’s Just Eat Takeaway.com NV for $7.3 billion. Uber’s board of directors has approved the deal, a person said, though the plans could still be subject to change.
Uber closed at $30.68 on Friday, after it had gone up more than 4% on initial reports of its bid for Postmates.
Founded in 2011, Postmates was one of the first to let customers in the U.S. order meal delivery using a mobile app. However, competition has intensified in recent years and Postmates has fallen to a distant fourth. The company said in February 2019 that it had filed paperwork confidentially for an initial public offering but never went public. It raised private capital last year in a deal that valued the business at $2.4 billion.


fortune--2020-07-06--Warren Buffett’s Berkshire ends its deal drought

Warren Buffett finally found his next crisis-era deal.
His Berkshire Hathaway Inc., which has stayed relatively quiet during the tumult of the coronavirus pandemic, broke its silence at the end of a holiday weekend with its biggest acquisition in more than four years. The agreement for Dominion Energy Inc.’s natural gas pipeline and storage assets signaled to the market that Buffett is willing to pounce despite his cautious tone in May about the pandemic, according to David Kass, a professor of finance at the University of Maryland’s Robert H. Smith School of Business.
“He’s willing to make investments now, of a fairly sizable amount,” Kass said. “It’s very positive that he’s sending a signal for the right deal at the right price, $10 billion or more, ‘We’re ready to go, we’re ready to invest.’”
Buffett, who has crafted Berkshire into a conglomerate valued at $434 billion, built his reputation as an investor able to swoop in during volatile markets to strike unique and complicated deals in past crises. After being stymied on the acquisition front during the recent bull market for stocks, Buffett still wasn’t striking any deals during the initial stages of the pandemic and even dumped his stakes in the major U.S. airlines.
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His inability to make a major acquisition recently has drawn scrutiny from his critics who have argued that Buffett has lost his ability to pull off the game-changing transactions that helped vault Berkshire into the ranks of the most valuable U.S. public companies. Now, the deal to buy substantially all of Dominion Energy’s natural gas transmission and storage assets for $4 billion, along with the assumption of $5.7 billion in debt, shows that Buffett is willing to put his money to work, Kass said.
“We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business,” Buffett, who is chief executive officer and chairman of Omaha, Nebraska-based Berkshire Hathaway, said in a statement Sunday.
“I’m inspired to see that, given that he’s bearish, he’s still willing to make acquisitions where he thinks it makes sense and where it meets Berkshire’s hurdle points,” said Darren Pollock, a portfolio manager at Cheviot Value Management, which invests in Berkshire shares.
Buffett has considered its energy business one of the “lead dogs” of Berkshire’s non-insurance operations alongside its railroad. Berkshire’s purchase expands its hold in the sector, adding more infrastructure to handle natural gas to its already sprawling energy operations across states such as Nevada and Iowa. Berkshire also struck the deal at a low point in the market. Natural gas futures in the U.S. dropped last month to their lowest point in 25 years and have recovered just slightly since then.
“This looks like confirmation that commodities like energy are undervalued,” Bill Smead, chief investment officer at Smead Capital Management, which owns Berkshire shares, said in an emailed comment. “At the bottom, assets move from weak hands to strong hands.”
Berkshire is digging deeper into a business that’s been facing increasing scrutiny amid the push for energy companies to shift away from fossil fuels. In its own statement on Sunday, Dominion Energy cited its target to reach net-zero emissions by 2050.
The deal also highlights the work of one of Buffett’s key deputies, Greg Abel, who led the energy business for years and is now chairman of Berkshire Hathaway Energy alongside his role as Berkshire’s vice chairman for all non-insurance businesses. Abel has gained a reputation as a key dealmaker for Berkshire with the 2013 purchase of NV Energy and even the battle to buy Oncor Electric Delivery Co., which didn’t ultimately come together. Abel is viewed as a potential successor to Buffett, 89.
The Dominion deal is set to be Berkshire’s largest acquisition ranked by enterprise value since its purchase of Precision Castparts Corp. in 2016. Still, Buffett ended the first quarter with a record $137 billion on hand and has been hankering for an “elephant-sized acquisition” to put a chunk of his cash pile to work. The Dominion agreement’s total enterprise value would account for about 7% of that total.
“It’s not something that’s going to move the needle from a balance sheet standpoint, but it’ll produce several hundred million dollars a year in net income to Berkshire,” said Cheviot’s Pollock. “That’s no paltry sum. That adds up over time.”


fortune--2020-07-07--Square rally sends valuation into ranks of biggest U.S. banks

A guide for companies that want to fight the stigma around opioid addiction

A rally in the shares of Square over the past few months has pushed the market valuation of the digital-payment company into the ranks of some of the biggest U.S. banks.
Square has a market capitalization of about $55 billion after doubling since May, making it worth more than Truist Financial Corp. and all but four banks in the KBW Bank Index. While it’s still dwarfed by JPMorgan Chase & Co. and Bank of America Corp., Square is less than $20 billion shy of Goldman Sachs Group Inc.’s market valuation, which stands at $74 billion.
Square shares have continued to set records in recent weeks as optimism swells over the growth of digital payments, and as the coronavirus pandemic changes consumer and corporate spending behavior.The San Francisco-based company has benefited in particular from positive sentiment about its popular cash app, its handling of pandemic-related government stimulus payments and its ability to garner deposits from traditional banks with fewer digital offerings.
Technology stocks have soared this year, while banks have sunk. The tech-heavy Nasdaq 100 Index has gained 21% and the KBW Bank Index has fallen 35%.
Square rallied as much as 13% on Monday after an analyst suggested it could eventually win as much as 20% of U.S. direct deposit accounts.


fortune--2020-07-06--These congressional districts saw the highest number of PPP loans over $150,000

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Where did the money land?
After a long wait and plenty of hounding from Congress, oversight agencies, and outside groups, a deluge of Paycheck Protection Program loan data was released Monday.
Though there are may ways to slice the data, one interesting window is to look at the number of loans by congressional district. As Fortune‘s analysis shows, the districts that saw the most loans tended to be in the wealthiest enclaves in California, New York and Texas. The 10 districts receiving the most PPP loans over $150,000 are represented in the chart below.
The highest number of loans were awarded in Jerry Nadler’s New York 10th congressional district (6,976). The 10th district includes parts of upper and lower Manhattan (including the Financial District) and Brooklyn. Alexandria Ocasio-Cortez’s district, the 14th district of New York, meanwhile, received a much smaller pool of 728 forgivable loans.
Others in the top 10 districts to get the taxpayer loans include Republican Dan Crenshaw, whose district, the 2nd of Texas, came in No. 2 with 5,247 loans over $150,000. Democrat Diana DeGette’s 1st district of Colorado rounded out the top three, with 4,805 loans for her district based in Denver.
Some of the congressional districts, in places like New York City, that took home the most PPP loans were also among the hardest hit by initial shutdowns.
One interesting note: Georgia’s 6th Congressional District is currently represented by Democrat Lucy McBath, which came in at No. 9. That district’s move from a Republican stronghold, which was once represented by Newt Gingrich, to Democratic district is symbolic of the country’s wealthiest enclaves drifting away from the Republican party to the Democratic party. In 2012, Mitt Romney won 54% of the voters with incomes over $200,000 household incomes, that number fell to 48% for Donald Trump, according to New York Times exit poll data.
Meanwhile, chairwoman of the House’s Committee on Small Business Nydia Velázquez’s district secured 4,799 loans for New York’s 7th district—which includes parts of Queens, Brooklyn, and lower Manhattan. Rep. Velázquez has been a key figure in the small business emergency aid program, and has expressed frustration with the administration’s approach to transparency: She wrote in a joint statement with Richard Neal (D-Mass.) and Maxine Waters (D-Calif.) on June 22 that, “only sharing data on disbursements above [$150,000] is utterly inadequate.”
Rep. Carolyn Maloney’s 12th district in New York received 4,441 loans, encompassing areas in Midtown and the Upper East Side, while California’s 33rd district, represented by Ted Lieu, came in at No. 6 with 4,346 forgivable loans.
Among the three California districts to receive the most loans is Katie Porter’s 45th district—securing 4,124 PPP loans for her Orange County, California district. Porter has echoed Velázquez’ concerns about a lack of transparency for the Small Business Administration’s program, and declared on MSNBC on July 1 that, “Even if [Treasury Secretary Steve] Mnuchin gives us some of these data, we need to be acting legislatively to ensure we’re going to have the information throughout the program,” as the program still has over $130 billion of unused funds as of June 30.
Texas representative Kenny Marchant’s 24th district (one of the two Republicans whose districts hit the top 10) secured 3,959 PPP loans.
The 28th district of California, which includes Pasadena and Hollywood, came in at No. 10, with 3,663 PPP loans over $150,000. The district is represented by Democrat Adam Schiff, who also chairs the House Select Committee on Intelligence.
Although the public got its first look at exactly who got loans, the disclosures on Monday only covered about 14% of the total number of PPP borrowers, as the majority of loans fell under the $150,000 threshold. Now, the Select Subcommittee on the Coronavirus Crisis is “working to ensure more oversight and more transparency for this critical program,” Rep. James Clyburn, the subcommittee’s chairman, said in a statement Monday.


fortune--2020-07-06--A guide for companies that want to fight the stigma around opioid addiction

Cruise companies enlist former FDA head and other big names in health to a bid to woo back passengers

While the entire globe has been focused on battling COVID-19, our nation’s ongoing opioid crisis has not disappeared. In fact, it may be worsening.
Early data from the Overdose Detection Mapping Application Program, a federally funded national surveillance tool, shows that drug overdoses are increasing during the pandemic, and local medical and law enforcement authorities across the U.S. are reporting spikes in overdose calls and deaths.
Public health officials fear the pandemic could spark a wave of new addictions due to increased drug and alcohol use linked to historic unemployment, as well as isolation fostered by state shutdowns and stay-at-home orders. One study by Well Being Trust estimated the COVID-19 pandemic could lead to 75,000 Americans dying from drug or alcohol misuse or suicide.
Opioid addictions are a financial problem for businesses, of course, but the toll in human suffering is far greater and more disturbing. Even in “normal” times, too many people who privately struggle with addiction do not reach out for help for fear of being judged. Fewer than one in five Americans are willing to be a friend, colleague, or neighbor of someone who is addicted to prescription drugs, according to a survey conducted by the Associated Press–NORC Center for Public Affairs Research.
I have learned from interactions with our nonprofit partner Shatterproof—and with colleagues who have lost loved ones to a drug overdose—that one of the most impactful ways to fight this national crisis is to take on the stigma associated with addiction.
Often, the language used when discussing addiction includes words that contribute to the stigma and shame, such as “drug abuse,” “addict,” and “clean and dirty” blood tests.
I personally have seen, as CEO, how I can change the perception of addiction by leading a companywide dialogue. I encourage all business leaders to drive cultural change within their companies and change the way we think and talk about addiction so that we can remove the hurdle of stigma for those who might otherwise seek timely help.
First, leaders need to educate themselves before leading a companywide dialogue on this once-taboo topic. They can learn by listening to local health experts and reading educational websites. Then they must ensure everyone in the company has access to these resources.
For example, on our company’s intranet, every article about the opioid crisis includes a link to an educational website offered through our Shatterproof partnership. Companies can provide addiction resources to employees in a number of ways, including links to the websites of federal agencies, such as the Centers for Disease Control and Prevention, within emails delivered to all employees.
Leaders can kick off a companywide conversation about addiction in many ways, such as an all-hands meeting. For me, it was a public call to action to companies, communities, and citizens to work together to end the opioid crisis in 2018. I outlined how the opioid crisis was taking a heavy toll on employers and employees who need addiction education and support such as employee assistance programs. My call to action was published externally on a magazine’s website, as well as on our intranet.
Because I have talked openly and nonjudgmentally about the opioid crisis and addiction, employees at The Hartford have felt more comfortable talking about these topics as well.
Our employees have responded by sharing their accounts of helping family members with substance misuse, losing loved ones to overdose, and volunteering at community organizations, such as Shatterproof Rise Up Against Addiction 5Ks. They have written blogs and social media posts on our intranet, which is like a social media platform allowing them to quickly create and share, and shared their thoughts with the entire company. One employee discussed her son’s struggle with opioid misuse. Another employee told the story of her 25-year-old daughter who died of a drug overdose. Others have reflected on losing a family member, friend, or neighbor as a result of the opioid epidemic.
In an intranet post, Allie Doney, who works as a senior legal assistant in our East Windsor, N.J., office, described her brother’s battle with opioid addiction after sustaining hockey injuries, which eventually led to him dying of a drug overdose. She tackled misconceptions about opioids and addiction: “This epidemic does not discriminate. It doesn’t matter your age, your ethnicity, race, religion, how much money you have in the bank, where you grew up—nothing.”
To continue the dialogue in a highly visible way, I engaged employees by commenting directly on their posts. Doing so was important to show that our company’s leadership stood behind them. In a small face-to-face meeting, I met with Allie and other employees whose loved ones died of drug overdose, asking to hear their stories and how our company could better support them.
Business leaders also have the responsibility to ensure that managers are empowered with information about the company’s benefits and health resources. They can direct their human resources and communications teams to educate managers so they can spot the signs of substance misuse and connect employees to support and treatment. They also can instruct their HR teams to talk with benefit providers, such as workers’ compensation and disability insurers, about addiction prevention strategies. Also, HR can speak with health care and prescription providers about improving access to treatment, including telemedicine and digital options.
Finally, as business leaders, we must use our voices to champion effective public policy solutions that address the addiction crisis. Over the last year, I connected with state and federal lawmakers regarding public policies dealing with the opioid epidemic. These discussions have focused on opioid prescription duration and dosage restrictions; mandatory physician and provider education about appropriate prescription opioid use; states’ prescription drug monitoring programs, which are electronic databases of prescriptions within the state that can help identify and deter or prevent drug misuse; and the adoption of restrictive drug formularies, which are lists that designate specific prescriptions for medical conditions.
Prior to the pandemic, we saw progress resulting from our nationwide, multi-stakeholder response. Now, in the face of COVID-19, adequate funding remains critical. I am encouraged to see federal lawmakers prioritizing the inclusion of substance use disorder and mental health funding in the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act and other legislative proposals, such as the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act.
There’s more to be done at the individual level as well.
Let us all commit to removing stigmatizing language from our vocabulary. It’s something that can be done no matter where we live or work.
Instead of “drug abuse,” we can say “substance use disorder.” Instead of “junkie,” we can say “person with a substance use disorder.” Instead of “reformed addict,” we can say “person in recovery.”
Most important, we can foster empathy and hope instead of stigma—and together, we can overcome the crisis that the pandemic has compounded.
Christopher J. Swift is chairman and CEO of The Hartford.


fortune--2020-07-06--Cruise companies enlist former FDA head and other big names in health to a bid to woo back passenger

Cruise companies enlist former FDA head and other big names in health to a bid to woo back passengers

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Chalk this up as another COVID sea change for cruising: The industry better known for organizing events around Kid Rock and Mickey Mouse is now assembling a super-group of epidemiologists and former senior government health officials.
The beleaguered cruise industry, closed for business until at least the fall, is hoping that a new “Healthy Sail” panel of public health experts can help it figure out better post-pandemic health and safety standards–and ultimately woo back passengers in the wake of COVID-19. The panel includes several bold-faced names, and is co-chaired by Scott Gottlieb, a former head of the U.S. Food and Drug Administration, and Mike Leavitt, a former governor of Utah and former U.S. Secretary of Health and Human Services.
Royal Caribbean Cruises and Norwegian Cruise Line Holdings, which organized the panel last month, announced it Monday. The panel also includes Julie Gerberding, a former head of the U.S. Centers for Disease Control and Prevention and the current chief patient officer of Merck; Helene Gayle, a longtime CDC veteran and former CEO of CARE, who’s now running the Chicago Community Trust; Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota; and several other public health experts.
It’s a hefty array of expertise for the leisure-travel niche of cruising, one of the first industries to feel the impact of the global pandemic and still one of the most deeply affected. Royal Caribbean, Norwegian, and larger rival Carnival Corp. remain shut down under a CDC “no sail” order, and do not expect to resume cruising before mid-September at the earliest.
The “Healthy Sail” panel is expected to deliver its initial recommendations by the end of August. Its organizers promised to make those guidelines “open source” and available to competitors.
“This unprecedented disease requires us to develop unprecedented standards in health and safety,” Richard Fain, Royal Caribbean’s chairman and CEO, said in a press release. “Bringing aboard these respected experts to guide us forward demonstrates our commitment to protecting our guests, our crews and the communities we visit.”
Meanwhile, Carnival is rounding up its own group of public health experts to discuss the future of the industry’s health and safety. Separately on Monday, the world’s largest cruise company said it will host a “Global Scientific Summit on COVID-19” on July 23, in partnership with the World Travel & Tourism Council (WTTC).
Carnival and the WTTC said their event will include government agencies and private businesses, who will “share the very latest science and medical evidence that can be used to inform practical, adaptable and science-based solutions for mitigating and living with COVID-19.” There are no former government agency heads yet listed on the event‘s website–but it has so far signed up several scientists and at least one Nobel laureate, biologist Michael Rosbash of Brandeis University.


fortune--2020-07-06--Justin Trudeau will not attend new NAFTA summit in U.S. this week

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Justin Trudeau declined to attend a trilateral summit in Washington this week to inaugurate the new trade pact between the U.S., Mexico and Canada.
The Canadian prime minister’s office confirmed the decision in a statement Monday, saying Trudeau would remain in Ottawa this week for cabinet meetings and parliamentary debate.
“We wish the United States and Mexico well at Wednesday’s meeting,” spokeswoman Chantal Gagnon said in an emailed statement.
Mexican President Andres Manuel Lopez Obrador told a daily briefing earlier that Trudeau wouldn’t be joining him on his visit to the U.S. capital for talks with President Donald Trump.
The White House had signaled it was envisioned as a trilateral meeting before Trump’s weekly schedule listed only Lopez Obrador, who is known by the acronym AMLO, as a guest.
Health concerns
The U.S. was in talks with Canada in hopes Trudeau could attend, but a senior administration official said the prime minister had multiple scheduling conflicts. Health regulations for travel by Canadians during the Covid-19 pandemic were also a factor, the official said.
Trudeau’s government is due to unveil a long-awaited budget update on Wednesday that will provide an accounting of recent virus-related spending
The prime minister said Friday he was deciding whether to attend due to concerns around the pandemic, which has made it more difficult for world leaders to meet in person in recent months. He also said he was concerned about the potential reimposition of U.S. tariffs on Canadian aluminum imports.
Canada’s border with the U.S. remains closed to all non-essential journeys and any travelers must quarantine for two weeks upon entering the northern nation. Trudeau would have been required to follow this procedure or face a political backlash at home for ignoring his government’s rules.
Trudeau has asked to speak with Trump by phone about the agreement, known in America as USMCA, entering into force, the U.S. official said.
AMLO’s forecast
Lopez Obrador and Trudeau spoke Monday morning about the new trade agreement, according to a readout from the Canadian prime minister’s office.
The two leaders also discussed renewable energy infrastructure during the call, Trudeau’s office said. The issue may be a sticking point between the two countries as Lopez Obrador’s administration has attempted to crack down on clean energy production in a bid to help the Mexican state utility, Comision Federal de Electricidad.
Because of the new continental trade deal, agreed to after more than a year of intense negotiations and known in the U.S. as USMCA, “more investment will come” to Mexico, Lopez Obrador said. “That’s my forecast as well in a time when we need to drive growth, to reactivate the economy.”
Lopez Obrador added that USMCA—which was negotiated by the administration of his predecessor, Enrique Pena Nieto—will also protect the rights of workers in all three countries, something he said would not have been done previously.
The Mexican president will face a juggling act in the meeting with Trump and has come under heavy domestic criticism for his decision to attend. Mexican commentators warn that Lopez Obrador, who has denounced the U.S. president’s anti-migrant rhetoric in the past, risks undermining himself in Washington.
The trip will be Lopez Obrador’s first foreign visit since taking office in 2018. He is scheduled to leave Tuesday and will return to Mexico on July 9.
With assistance from Josh Wingrove and Lorena Rios.


fortune--2020-07-06--Will food delivery prices rise following Uber’s purchase of Postmates?

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Uber’s planned $2.65 billion acquisition of rival Postmates is turning up the heat in an already hot food-delivery market. But as the number of competitors shrinks, one question remains: Will fewer delivery services result in higher prices for people who want their pizza, pad thai, and tacos delivered to their homes?
The answer, according to three analysts is: probably, in some form.
“Over the intermediate and long term I would expect that consolidation will lead to higher prices for diners,” Tom White, analyst for investment banking firm D.A. Davidson, told Fortune. “These businesses need to get profitable.”
Analysts said consumers will likely see either fewer promotions for free delivery or an increase in delivery fees in the future. But they said such changes would have likely occurred even without the recent proposed acquisitions of Postmates and Grubhub, which Europe’s Just Eat Takeaway agreed to buy for $7.3 billion last month.
“Uber has been pretty clear that [promotions are] a thing of the past,” said Brad Erickson, an analyst at investment banking firm Needham & Co. “My view is, as these businesses get bigger, it’ll happen less and less.”
Food delivery companies like Uber Eats, DoorDash, and Postmates have experienced explosive growth in the past few months, as more people stayed home because of the coronavirus pandemic. Meanwhile, more restaurants turned to the services following city mandates that allowed eateries to fulfill only takeout and delivery orders, analysts said. But the rapidly growing food delivery services are still suffering from big losses, mainly the result of steep diner discounts and big driver incentives.
Though the coronavirus has altered the outlook for these services, they’re still expected to crack down on expenses and start working toward profitability—following a similar approach to ride-sharing services.
Mark Shmulik, analyst at brokerage firm AB Bernstein, said that as seen with ride-sharing, price changes will likely happen city by city, as food delivery services determine where they can pull back on promotions or raise delivery fees. Acquiring Postmates and its clientele will likely help Uber Eats in places—including Los Angeles, San Diego, Phoenix, and Las Vegas—where it has historically struggled to gain popularity.
“This is going to play out on a metro-market level,” Shmulik said. “These companies are going to battle it out, and they’re going to pick and choose which cities’ [prices]” will change.
Food delivery services will likely have to both cut some marketing costs, such as free delivery promotions, and raise delivery fee prices to reach profitability, White said. With three large players, Grubhub, Uber Eats, and DoorDash, in competition, each will have to find some way to increase revenue. Given the economic pressures the coronavirus has placed on restaurants, White said, the services likely won’t increase fees for eateries. Therefore, consumers will likely have to pay more.
But Erickson disagreed. He said fewer promotions, which already aren’t as common these days, combined with increasing efficiency fueled by growing demand and consolidation will be enough to get these companies on the path to profitability. He added that food delivery services are aware of their customers’ price sensitivity, and that driving up delivery fees in a lot of cases means driving away customers.
“[The companies] test that all the time, so they have a keen sense of what they can do and can’t do,” Erickson said. “When they talk about getting to profitability, it’s not about raising the [delivery fee] for consumers.”
Because Uber’s proposed acquisition of Grubhub reportedly fell apart owing to antitrust concerns, Erickson said Uber will likely lie low and not raise prices anytime soon. An antitrust investigation could postpone the deal for several months, at least.
At the end of the day, though consumers may have less opportunities for free delivery, the acquisition works in their favor, said Shmulik.
“Consumers probably spend way too much time figuring out what to eat on these apps,” he said. “The fewer there are, the simpler it is to figure out what we want to eat.”


fortune--2020-07-06--The DOJ may bring an antitrust suit against Google. But are Americans ready to break up Big Tech?

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Apple, Microsoft, Amazon, Alphabet (Google), and Facebook are the five most valuable public companies in the world.
The big five are amassing incredible market power even outside their core businesses: Amazon is the third-largest digital ad platform, and Apple’s Services business would be No. 66 on the Fortune 500 if it were its own company.
And now politicians on the left and right are calling for the federal government to investigate these tech giants. This is the summer the Justice Department is expected to bring an antitrust lawsuit against Google for its dominance in digital ads and search.
To see where Americans stand on breaking up Big Tech, Fortune and SurveyMonkey polled 1,276 U.S. adults between June 25 and 26.*
More than half of U.S. adults (65%) want the feds to investigate at least one tech firm for antitrust, but the public can’t agree on which tech company. A third of them (29%) want Google to be investigated. Facebook (48%) and Amazon (31%) received the highest percentage of U.S. adults calling for them to be investigated, but those are far from a full sweep.
The majority of the country (53%) isn’t ready to see the federal government break up a big tech firm. However, 46% want to see at least one big tech firm broken up. Facebook leads the group, at 27%. But that still indicates barely over 1 in 4 U.S. adults who named the company. It was followed by Amazon (21%), Alphabet/Google (16%), and Apple (14%). Meanwhile, Microsoft had only 12% of U.S. adults calling for it to be broken up.
The public is not gung ho about breaking up big tech companies. Then again, the DOJ doesn’t necessarily need public sign-off. Just look at its case against beloved Microsoft in the 1990s.
*Methodology: The Fortune-SurveyMonkey poll was conducted among a national sample of 1,276 adults in the U.S. between June 25–26. This survey’s modeled error estimate is plus or minus 4 percentage points. The findings have been weighted for age, race, sex, education, and geography.


fortune--2020-07-06--More than 130,000 Americans have died of COVID and hospitalizations are mounting

Good afternoon, readers. It doesn’t give me any joy (quite the opposite, in fact) to send depressing missives like this. I hope you enjoyed the Fourth of July holiday before returning to a bizarre and complicated world.
On July 1, America recorded nearly 51,000 new active COVID-19 cases in a single day. That was a record before going into a holiday weekend when, let’s face it, many people were probably loathe to wear a mask or socially distance after months of pandemic fatigue and hot weather.
It’s true that coronavirus is a strange pathogen that we still don’t fully understand. It’s true that many who get infected don’t present symptoms; It’s also true that hospitalizations and deaths keep racking up.
The number of COVID deaths in America crossed 130,000 people on July 6, according to Johns Hopkins. And the hospitalization numbers provide little comfort, either, and continue to overwhelm local medical capacity.
On Sunday, Texas reported a record high of 8,181 COVID hospitalizations. The mayor of Austin, Texas said that its own city of nearly one million could face a hospital bed shortage within the next two weeks if cases keep swelling. Nearly 30% of the beds allocated for coronavirus patients are already occupied in the city.
People tend to focus on death rates when it comes to a strange new disease. But the suffering endured by those who don’t die is also an important consideration.
We’ll be discussing such health care issues, coronavirus and beyond, during our first-ever virtual Brainstorm Health conference on July 7 and July 8 (i.e., tomorrow and Wednesday). We’ll have industry leaders from across the health care space, including from our founding partner IBM, hosting vigorous discussions on the most important medical issues of the day. Check out the agenda here, and look to this space and Fortune.com for coverage if you’re not digitally attending.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
IBM AI deployed as a virtual assistant during COVID crisis. IBM Watson AI technology is giving a virtual boost to U.K. physicians during the coronavirus pandemic. A British hospital system created a virtual hospital assistant tech called "Ask Maisie" with IBM's technology. It's tailored towards doctors rather than patients, providing tips about COVID testing, proper precautions for frontline workers, and life-work balance tasks such as child care during a time when health workers are particularly strained.
INDICATIONS
The price of generic remdesivir. With coronavirus treatments in high demand, companies making therapeutics will face a supply chain crunch that necessitates cooperation. To that end, generic drug manufacturer Mylan is one of a number of companies authorized to make a version of Gilead's COVID treatment—and it's named a price in India, a densely populated country grappling with the pandemic. Mylan will sell its product for $64 for a 100 mg vial of the drug, or about an 80% discount to the price in wealthier nations. Drug companies regularly strike licensing agreements for cheaper therapies in low-income countries, and the pressure to do so has only grown in the midst of a pandemic. (Reuters)
THE BIG PICTURE
Scientists urge more guidance on airborne COVID spread. The New York Times reports that nearly 240 health experts are urging the World Health Organization (WHO) to issue more direct information about how the coronavirus spreads. The WHO, an agency known for its general caution before making claims, has said that research showing that coronavirus spreads through the air, especially in enclosed spaces, is still inconclusive. But the experts point to mounting evidence in a call for clarity as countries grapple with reopening schools, nursing homes, and businesses at large. (New York Times)
REQUIRED READING
A double-digit unemployment rate is the norm for Black Americans, by Lance Lambert
Three major deals to have on your radar, by Lucinda Shen
How realtors are giving virtual home tours during the pandemic, by David Z. Morris
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