The news at a glance
Finance: Wall Street titan demands good deeds
The world’s largest investor declared this week that “he plans to hold companies accountable” for not just their financial performance but also their contribution to society, said Andrew Ross Sorkin in The New York Times. Laurence Fink, the founder and chief executive of investment firm BlackRock, this week wrote to more than 1,000 CEOs of global companies and declared that his firm, which manages more than $6 trillion in investments, will invest only in companies that “do more than make profits”—they must also make a positive impact on society. Given that Fink has the “clout to make this kind of demand,” the letter could prove to be a “watershed moment on Wall Street.”
It’s going to take more than a strongly worded letter to get corporate America to change, said Stephen Gandel in Bloomberg.com. Fink’s annual missive to executives is timed around Davos, “the ultimate CEO lip-service confab,” and in the past, his bark has been “louder than his bite.” In 2014, he implored CEOs to think longer-term and resist inflating stock prices with share buybacks. Last year, he called for them “to be mindful of changes to the environment.” Sure, Fink has chalked up some small wins with his previous communiqués, but unless he “backs it up with some action, it’s hard to see how it will actually help.”
Energy: Oil prices hit three-year high
Oil prices last week topped $70 a barrel for the first time in three years, said Grant Smith and Ben Sharples in Bloomberg.com. The price rally comes as “production cuts by OPEC and rising demand whittle away a global surplus.” The Organization of the Petroleum Exporting Countries and its allies have been relatively successful in their campaign to clear a glut in supply “triggered by the growth of U.S. shale oil.” Concern that “rising political tensions” could disrupt supply from OPEC member countries Iran and Venezuela has also buttressed the price.
Tech: Net neutrality battle escalates
The battle to save net neutrality is heating up, said Jim Puzzanghera in the Los Angeles Times. A group of 22 Democratic state attorneys general filed a lawsuit this week attempting to block the Republican-controlled Federal Communications Commission’s rollback of net neutrality laws, contending that last month’s FCC vote was “arbitrary and capricious.” The suit is one of several fronts of attack on the FCC’s repeal. Public interest groups have filed a flurry of lawsuits, and 50 senators have so far pledged support for a resolution to stop the FCC’s policy reversal.
Retail: CVS to halt photo touch-ups of models
CVS Pharmacy has “vowed to end touch-ups of its beauty images by the end of 2020,” said Marwa Eltagouri in The Washington Post. The giant drugstore chain also announced this week it would start “alerting customers” if any beauty images featured in its marketing campaigns or on its social media accounts had been “digitally altered.” The company will create a watermark, “CVS Beauty Mark,” that will appear on beauty images in which the person featured “did not have their shape, size, skin or eye color, wrinkles, or other characteristics enhanced or changed.”
Finance: Banks celebrate tax bill
“The nation’s banks are finding a lot to love about the Trump administration’s tax cuts,” said Jim Tankersley in The New York Times. The tax overhaul “provides deep and lasting cuts” to most businesses, but financial institutions are “among the biggest winners so far.” The country’s largest bank, JPMorgan Chase, and Wells Fargo both say their effective tax rate will tumble to 19 percent next year, nearly a third less than what they paid in 2016—giving them “a combined boost of more than $7 billion in 2018 alone.” ■