WEBVTT - Bloomberg Businessweek Weekend - October 29th, 2021 0:00:01.040 --> 0:00:05.400 This is Bloomberg Business Week inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:12.559 global business, finance and tech news. As it happened. Its 0:00:12.600 --> 0:00:16.440 Bloomberg Business Week with Carol Messier and Bloomberg Quick Takes 0:00:16.520 --> 0:00:20.919 Tim Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the 0:00:20.920 --> 0:00:23.880 weekend edition of Bloomberg Business Week. It was, to say 0:00:23.920 --> 0:00:26.600 the least, another busy week of earnings as we come 0:00:26.640 --> 0:00:29.600 down the stretch of well ahead. On the program, we're 0:00:29.600 --> 0:00:31.960 gonna talk to a pair of executives who enjoyed strong 0:00:32.040 --> 0:00:34.800 thurm quarters speaking of earnings and even more success on 0:00:34.840 --> 0:00:37.760 the horizon. That's what they're saying. It's Chipotle a CEO 0:00:37.880 --> 0:00:42.360 Brian Nicol also e non Cries Mattel's CEO talking Tacos 0:00:42.440 --> 0:00:45.040 and Toys. Toys and TACCOs say then five times fast, 0:00:45.760 --> 0:00:48.360 both of those companies impacted in different ways by rising 0:00:48.400 --> 0:00:51.320 prices and supply chain constraints. Will also speak with the 0:00:51.360 --> 0:00:53.599 CEO of a T and T business about the fight 0:00:53.640 --> 0:00:56.680 to acquire and retain top talent and why five G 0:00:56.920 --> 0:00:58.800 is ready to change the game in every corner of 0:00:58.800 --> 0:01:01.880 the economy. I have five g already. I don't sorry, 0:01:02.000 --> 0:01:04.560 I got that old iPhone ten. Work on that. Maybe 0:01:04.600 --> 0:01:06.720 under the tree this year, right, if the supply chain 0:01:06.800 --> 0:01:09.679 can figure it out. Well. A record year for mergers 0:01:09.680 --> 0:01:13.680 and acquisitions to the tune of a cool five trillion dollars. 0:01:13.720 --> 0:01:15.679 Also a group of E s G nay sayers. You 0:01:15.720 --> 0:01:18.480 spoke to them, Carol. They're making their voices heard in 0:01:18.520 --> 0:01:20.920 the most critical moment for the American workers since the 0:01:21.000 --> 0:01:24.080 nineteen forties. We are talking the labor movement. It's our 0:01:24.120 --> 0:01:26.920 domestic cover story. It is, indeed all of that straight ahead. 0:01:26.959 --> 0:01:28.800 We begin there with a look at this week's issue 0:01:28.800 --> 0:01:32.600 of Bloomberg Business Week, and specifically our international cover story, 0:01:32.640 --> 0:01:35.160 which is a look at the struggles of working women 0:01:35.240 --> 0:01:38.440 in fifteen of the world's top business cities. It was 0:01:38.480 --> 0:01:40.480 also a Bloomberg Big Take this week, and it's a 0:01:40.520 --> 0:01:43.240 story in the Solution section of the magazine. Ruth David 0:01:43.280 --> 0:01:46.319 and Adam Blenford wrote it. It ranks the performance of 0:01:46.360 --> 0:01:49.520 these hubs in five areas that relate to structural and 0:01:49.640 --> 0:01:55.840 social challenges facing women, including safety, mobility, maternity, equality, and health. Yeah, exactly, 0:01:55.880 --> 0:01:58.240 looking at what's going on in a lot of top 0:01:58.240 --> 0:02:02.680 business cities, and specifically they really talk about the abduction 0:02:02.760 --> 0:02:05.640 of Sarah Everard from a London street and marked by 0:02:05.640 --> 0:02:08.639 a police officer, raped and murdered the thirty year old 0:02:08.639 --> 0:02:12.320 marketing executives for a furious uproar encapsulated by one refrain 0:02:12.400 --> 0:02:15.079 on social media. She was just walking home. And so 0:02:15.639 --> 0:02:19.280 talking about women, we so often talk on you write 0:02:19.280 --> 0:02:22.440 tim about women moving up the corporate ladder and having 0:02:22.520 --> 0:02:26.480 access uh in terms of those senior positions, trying to 0:02:26.480 --> 0:02:29.320 make inroads, and yet when it comes just to basic 0:02:29.520 --> 0:02:32.880 safety of women walking around in our major cities, it's 0:02:33.000 --> 0:02:35.680 lacking big time. And that's what's particularly surprising. I think 0:02:35.680 --> 0:02:38.360 too many people who saw this story were a data 0:02:38.360 --> 0:02:41.919 company Bloomberg, and we love numbers, and this takes a 0:02:42.200 --> 0:02:46.560 data and analytics approach to ranking fifteen cities, Toronto topping 0:02:46.560 --> 0:02:49.399 the list with the highest overall score, Beijing and sal 0:02:49.520 --> 0:02:53.560 Pallo the worst. Yeah, exactly. European capitals such as Berlin, 0:02:53.639 --> 0:02:56.240 Paris and London scored high because of strong maternity and 0:02:56.320 --> 0:02:58.600 legal rights. What was interesting it was a scale of 0:02:58.600 --> 0:03:02.880 one to five on those five criteria that you mentioned, safety, mobility, maternity, 0:03:02.880 --> 0:03:06.520 equality and health and yet none of them scored really 0:03:06.600 --> 0:03:08.480 high on all of it, right, not a lot of 0:03:08.560 --> 0:03:11.280 fours if any in there. Meanwhile, we mentioned earnings at 0:03:11.280 --> 0:03:13.080 the top. One of the tech giants to report this 0:03:13.120 --> 0:03:16.200 past week was Facebook. A lot of news for the company, 0:03:16.200 --> 0:03:20.560 including a name change, Facebook announcing on Thursday that it's 0:03:20.600 --> 0:03:23.640 rebranding itself as Meta as it goes all in on 0:03:23.680 --> 0:03:26.359 the metaverse. Before that, though, as I mentioned, a lot 0:03:26.400 --> 0:03:28.960 of news on Facebook this week, there was a Bloomberg 0:03:28.960 --> 0:03:31.640 report that the company had kept investors in the dark 0:03:31.720 --> 0:03:35.640 about falling usage among teens on their platform. Ker Wagner 0:03:35.680 --> 0:03:37.840 had a hand in breaking that story. He also wrote 0:03:37.840 --> 0:03:40.280 a piece in this week's Technology section of the magazine 0:03:40.280 --> 0:03:43.440 that goes into the social networks. Next chapter, we're talking 0:03:43.800 --> 0:03:45.680 the metaverse, now, I believe you have to say the 0:03:45.720 --> 0:03:49.400 metal I mean, I'm still trying to figure out what 0:03:49.440 --> 0:03:51.640 it is. Uh yeah, I know you're shaking your head 0:03:51.640 --> 0:03:53.360 at me, your eyes are wide, and you're like, I 0:03:53.440 --> 0:03:55.360 know a lot of investors are trying to figure out 0:03:55.400 --> 0:03:56.920 what it is as well. I think a lot of 0:03:56.960 --> 0:03:59.800 people understand the metaverse in the context of gaming. Robe 0:04:00.240 --> 0:04:02.880 for example, is sort of a go to But how 0:04:02.920 --> 0:04:07.480 does Facebook bring it to sort of productivity, and especially 0:04:07.480 --> 0:04:10.680 monetize it if they're thinking about the next generation for 0:04:10.760 --> 0:04:12.680 the social network, which by the way, is closer to 0:04:12.800 --> 0:04:14.600 twenty years old than it is to ten years old. 0:04:14.800 --> 0:04:18.200 Monetizing the metal, that's what it's about. There's a must 0:04:18.200 --> 0:04:21.040 read feature by pre Anon and Mark berg In about 0:04:21.040 --> 0:04:24.360 a company called go Guardian, the leading developer of education 0:04:24.360 --> 0:04:27.680 at tech software, also known as ed tech in the biz. Yeah, absolutely, 0:04:27.720 --> 0:04:30.080 you're so cool. What it really amounts to do, though, 0:04:30.160 --> 0:04:33.480 is educational surveillance software. And it turns out the pandemic. 0:04:33.520 --> 0:04:36.040 We know this, We saw this doing u COVID nineteen, 0:04:36.080 --> 0:04:39.600 the schools being shut down, the pandemic, revitalizing the ed 0:04:39.680 --> 0:04:42.960 tech industries post to get more digital technology into the classroom. 0:04:43.240 --> 0:04:47.200 And much like our smartphones, these programs know exactly exactly 0:04:47.200 --> 0:04:49.280 what students are doing at all times. Well, for more 0:04:49.320 --> 0:04:52.440 than a decade, Silicon Valley entrepreneurs have been pushing digital 0:04:52.440 --> 0:04:56.240 technologies and public schools at the same time, though they're 0:04:56.240 --> 0:04:59.919 struggling to explain how exactly they were helping students. Yeah, exact. 0:05:00.160 --> 0:05:02.880 COVID forced even the more reluctant schools to finally embrace 0:05:02.960 --> 0:05:05.640 digital learning tools that have continued to be central to 0:05:05.680 --> 0:05:08.480 classrooms even as schools have reopened back in person. Go 0:05:08.600 --> 0:05:11.920 Guardian allows school administrators to watch everything students are doing 0:05:11.960 --> 0:05:15.640 on their laptops and tablets. Sound a little creepy, it does. Sorry, 0:05:15.880 --> 0:05:19.240 it's this constant battle tug of war that we have 0:05:19.360 --> 0:05:21.520 with technology. Look what it can do for us, Like 0:05:21.560 --> 0:05:24.200 there's just so much ease, so much information. But at 0:05:24.200 --> 0:05:27.279 the same time all that information, we're wondering about our privacy. 0:05:27.320 --> 0:05:28.920 What are we giving up as a result privacy? And 0:05:28.920 --> 0:05:31.400 I also wonder about the relationship between students and administrators 0:05:31.400 --> 0:05:34.560 when it comes to trust and how much responsibility they're 0:05:34.560 --> 0:05:37.400 putting on students that we're not putting on students. A really, 0:05:37.400 --> 0:05:40.320 really good point. And then in the finance section of 0:05:40.360 --> 0:05:42.520 the magazine this week a story from Robert Schmidt and 0:05:42.560 --> 0:05:46.080 Jesse Westbrook. It's about a government post that we don't 0:05:46.120 --> 0:05:48.800 often think about. It sounds like a schnoozer. Snoozer, Can 0:05:48.839 --> 0:05:51.400 I say that? We're talking about the position of the 0:05:51.400 --> 0:05:54.520 Comptroller of the Currency. It's a very important one, it is, 0:05:54.560 --> 0:05:57.040 and President Biden's nominee for the position is turning out 0:05:57.040 --> 0:05:59.880 to be well a really divisive one. Sally i'm a 0:06:00.000 --> 0:06:03.480 Ova is a Kazakh San born graduate of Moscow State University, 0:06:03.520 --> 0:06:07.120 the recipient of a V. I. Lenin scholarship. Some Republican 0:06:07.200 --> 0:06:11.120 lawmakers have gone so far as to call her a Marxist. Yeah, exactly, 0:06:11.120 --> 0:06:13.000 a lot of controversy, and this is why it's not 0:06:13.080 --> 0:06:15.440 a snoozer of a story. It's a really important one. 0:06:15.480 --> 0:06:18.200 She'll have a lot of oversight for some different things. 0:06:18.200 --> 0:06:21.880 Of course, that position the controller of the currency. It's 0:06:21.920 --> 0:06:25.080 an agency that supervises banks and help set rules for 0:06:25.080 --> 0:06:27.640 Wall Street. But she's also going to be if she 0:06:27.760 --> 0:06:30.960 got the job, overseeing kind of all of the changes, 0:06:30.960 --> 0:06:33.760 whether it's cryptocurrencies or fintech. All right, some really great 0:06:33.760 --> 0:06:35.719 reads in the magazine this week, so check it out. 0:06:35.760 --> 0:06:38.440 The magazine on newsstands now, at Bloomberg dot com, at 0:06:38.480 --> 0:06:41.320 business week dot com, and of course on the Bloomberg terminal. 0:06:41.440 --> 0:06:43.560 Coming up next. Global m and A is heading for 0:06:43.600 --> 0:06:46.520 a record five trillion dollar year, thanks in part too 0:06:46.520 --> 0:06:50.320 low interest rates and abundant cash and desperate headwinds that include, 0:06:50.320 --> 0:06:53.320 of course, that we are still fighting this global pandemic. 0:06:53.440 --> 0:07:04.000 You're listening to Bloomberg Business Week This is Bloomberg. This 0:07:04.440 --> 0:07:08.080 is Bloomberg Business Week with Carol Messer and Bloomberg Quick 0:07:08.120 --> 0:07:12.880 Takes Tim Stinovik from Bloomberg Radio at the Milk and 0:07:12.920 --> 0:07:16.080 Institute Global Conference in Beverly Hills earlier this month, I 0:07:16.080 --> 0:07:17.800 hosted a panel on the space of M and A 0:07:17.880 --> 0:07:20.560 merigers and acquisition deals that we have seen thus far 0:07:20.600 --> 0:07:24.480 in it has been on fire. To yeah, I've been 0:07:24.520 --> 0:07:27.640 a banner year. And one of the panelists was Tyler Dixon, 0:07:27.920 --> 0:07:30.720 co had of City Groups, Global Banking, Capital Markets and 0:07:30.760 --> 0:07:33.160 Advisory Business. And to say he's bullish on M and 0:07:33.200 --> 0:07:35.680 A in the near term, well, that would be an understatement. 0:07:36.040 --> 0:07:39.720 Corporates are a great position of strength. Sponsors are cashed up, 0:07:40.160 --> 0:07:42.760 and we even have over four hundred spacks out in 0:07:42.760 --> 0:07:45.840 the marketplace looking for activity. So we think there's a 0:07:45.880 --> 0:07:49.440 good foundation right now and confidence in uh CEOs and 0:07:49.480 --> 0:07:54.679 c suites across the world are quite substantial. Basically every 0:07:54.680 --> 0:07:58.120 industry group, including tough industries like energy, have seen an 0:07:58.160 --> 0:08:01.080 up cycling of activity, and we look across the globe. 0:08:01.080 --> 0:08:03.120 That will not only be a record gear in US 0:08:03.200 --> 0:08:06.320 activity will be a record dear internationally because they can 0:08:06.320 --> 0:08:09.800 do deals, because they have to do deals both. That 0:08:09.920 --> 0:08:12.440 was Tyler Dixon of City Group and Carol. His words 0:08:12.440 --> 0:08:15.160 are ringing true in a big way. Yeah so true. Tim. 0:08:15.200 --> 0:08:17.440 This week in the magazine in Fact Our Deals Reporter 0:08:17.480 --> 0:08:20.600 at Hammond, he writes about the importance of psychology in 0:08:20.600 --> 0:08:23.280 this year's record deal making boom, one that could exceed 0:08:23.400 --> 0:08:26.720 five trillion dollars in total value when all is said 0:08:26.720 --> 0:08:29.400 and done in any circumstance, and astonishing number. But when 0:08:29.400 --> 0:08:32.600 you look at all the environmental factors going on in 0:08:32.640 --> 0:08:34.280 the background, and why you wouldn't want to do a 0:08:34.320 --> 0:08:37.400 deal right now? I think you know alsa well And 0:08:37.440 --> 0:08:39.760 what's interesting Ed, And you really did like set up 0:08:40.880 --> 0:08:43.360 me so well. But what's interesting too is you know 0:08:43.440 --> 0:08:45.920 these deal makers that I talked to bankers over at City, 0:08:45.920 --> 0:08:49.440 at Deutsa and elsewhere. They said that in many ways, 0:08:49.800 --> 0:08:51.920 UM members of the C suite are getting kind of 0:08:51.920 --> 0:08:53.839 poked and product by their board for not doing deals 0:08:53.880 --> 0:08:56.320 right now. Talk to us about what you're hearing. Why 0:08:56.320 --> 0:08:59.560 these deals are getting done despite the backdrop of a 0:08:59.640 --> 0:09:02.720 pen emic and worries about the outlook and supply chain 0:09:02.760 --> 0:09:05.400 problems and so on. I think part of it is 0:09:05.440 --> 0:09:08.400 just the cost of an ursher is is also very high. 0:09:08.480 --> 0:09:11.800 Look obviously, doing a deal at any time carry some risk, 0:09:11.920 --> 0:09:14.200 and you know you can get it wrong and that 0:09:14.240 --> 0:09:16.400 can be consequential. As the CEO, you can do your 0:09:16.400 --> 0:09:19.200 borders or your job stories the board, you can be 0:09:19.840 --> 0:09:23.240 tossed out. But I think right now, with the amount 0:09:23.280 --> 0:09:25.600 of disruption that's going on a cross industries and the 0:09:25.760 --> 0:09:28.280 sort of rapidity of change that almost their industry is 0:09:28.360 --> 0:09:31.240 going through, I think there are a real cost and 0:09:31.400 --> 0:09:35.880 not doing stuff and not growing. And you know, at 0:09:35.880 --> 0:09:38.320 the moment, a lot of companies are matched out on 0:09:38.920 --> 0:09:41.000 organic growth and M and A is obviously a very 0:09:41.080 --> 0:09:43.800 quick and efficient way a lot of the time to 0:09:43.800 --> 0:09:46.319 to to sort of turbo charge that growth in organically. 0:09:47.000 --> 0:09:49.040 In reporting this story, and you also looked at how 0:09:49.080 --> 0:09:52.520 investors react to companies that when a company does announce 0:09:52.559 --> 0:09:54.640 an acquisition, both to the company getting acquired and the 0:09:54.640 --> 0:09:57.080 one doing the acquiring. What did you learn. It's a 0:09:57.120 --> 0:09:59.640 really interesting trend that we've seen to him where you 0:09:59.760 --> 0:10:02.360 have this, uh, this sort of anomaly in the market 0:10:02.400 --> 0:10:05.199 where shareholders are coming out when companies and ounced deals 0:10:05.200 --> 0:10:07.200 and saying, you know, this is something we do like 0:10:07.280 --> 0:10:09.400 and they're reflecting that in the way the shares trade 0:10:09.400 --> 0:10:12.680 obviously a quisitive companies and seence shares trade up, which 0:10:12.720 --> 0:10:17.360 goes against almost very historical trends per virus. The recent 0:10:17.400 --> 0:10:19.680 paper US interest deal that was talked about right before 0:10:19.679 --> 0:10:22.880 I came on, obviously that was slightly different where you 0:10:22.920 --> 0:10:26.320 sort paper trends down and trade down heavily on news 0:10:26.360 --> 0:10:29.240 and some extent we think that's why they've now pulled 0:10:29.280 --> 0:10:32.679 the plug on that particular deal. But yeah, investors again, look, 0:10:32.679 --> 0:10:35.440 they're they're happy to see companies going out, getting on 0:10:35.480 --> 0:10:37.720 the front foot and pulling whatever leavers they can to 0:10:37.760 --> 0:10:40.200 achieve growth in this market. And I think that all 0:10:40.240 --> 0:10:42.800 comes back to the fact that we are seeing, you know, 0:10:43.480 --> 0:10:46.400 not reckless deals. We're not seeing companies go out to 0:10:46.480 --> 0:10:50.600 try and do very very large, complex, you know, sort 0:10:50.600 --> 0:10:53.760 of horizontal mergers. This is much more vanilla. Let's go out, 0:10:53.800 --> 0:10:55.679 let's do a deal that actually is in line with 0:10:55.679 --> 0:10:58.080 what we said we want to do strategically from perhaps 0:10:58.080 --> 0:11:00.319 it gets a slightly quicker from eight to than we 0:11:00.360 --> 0:11:02.319 would get their organic to Well, how much of it too, 0:11:02.360 --> 0:11:05.440 is pandemic related or pandemic push and where you know, 0:11:05.920 --> 0:11:10.680 trends disruptions. Digitization was happening, but it might have happened 0:11:10.679 --> 0:11:11.880 over the next three to five years, and all of 0:11:11.920 --> 0:11:15.079 sudden it was like, Bam, it's happening now, and I've 0:11:15.080 --> 0:11:18.760 got to possibly do a deal and acquisition to put 0:11:18.840 --> 0:11:22.840 my business in the right place to embrace that. Yeah, 0:11:22.880 --> 0:11:25.360 And I think that that comes back to this issue 0:11:25.400 --> 0:11:28.080 of disruption and the speed at which it's occurring now. 0:11:28.120 --> 0:11:30.200 And as you say, the pandemic sort of supercharged some 0:11:30.240 --> 0:11:33.280 of that activity. But you look at any industry now 0:11:33.320 --> 0:11:35.760 and they are all you know, if they're not taking industries, 0:11:35.760 --> 0:11:37.920 they take enabled industries. And so a lot of them, 0:11:37.920 --> 0:11:40.120 we've seen a lot of this already this year, are 0:11:40.160 --> 0:11:43.560 going and doing acquisitions that don't necessarily look like a 0:11:43.600 --> 0:11:46.040 sort of straightforward you know, an industrial company buying an 0:11:46.040 --> 0:11:49.160 industrial company. They're an industrial company buying a software company 0:11:49.200 --> 0:11:52.199 because they're realizing that actually, this is the way we're 0:11:52.200 --> 0:11:54.240 going to keep growing, and it's much easier to go 0:11:54.280 --> 0:11:56.560 out and buying something small that we can just tuck 0:11:56.600 --> 0:11:59.240 in than build our own capabilities in it in an 0:11:59.240 --> 0:12:01.480 area that perhaps is not where we have existing skills. 0:12:02.360 --> 0:12:05.160 How do spacts play into the boom that we've seen 0:12:05.400 --> 0:12:08.680 over the last eighteen months. Well, look, in terms of 0:12:08.760 --> 0:12:11.440 the sort of headlines and the amount of noise and 0:12:11.480 --> 0:12:13.520 interest they command their normals, but in terms of the 0:12:13.520 --> 0:12:18.320 actually dollar value they're very, very tiny. You know, certainly 0:12:18.360 --> 0:12:20.920 if you look at the sort of the dollar value 0:12:20.960 --> 0:12:23.199 of the spacts themselves rather than the dollar value of 0:12:23.240 --> 0:12:25.840 the companies, they often reversed into as a minority holder 0:12:26.440 --> 0:12:28.920 you're talking, you know, it's it's it's a minimus. But 0:12:29.840 --> 0:12:33.840 obviously trends they have been, you know, a driver of 0:12:34.040 --> 0:12:36.760 different kinds of activity. I'm sure you've seen some companies 0:12:36.760 --> 0:12:38.840 go out and do M and A because they were 0:12:38.880 --> 0:12:40.959 sort of worried about what might otherwise happened with the 0:12:41.000 --> 0:12:43.400 spect potentially buying a target that they were interested. So 0:12:43.640 --> 0:12:47.720 I think it's contributed, But certainly there is a quite 0:12:47.760 --> 0:12:51.319 serious dislocation between the amount of noise spect have generated 0:12:51.360 --> 0:12:53.920 in the actual contribution they've had to overall M and 0:12:53.960 --> 0:12:56.320 as here. So, all right, if we end up with 0:12:56.360 --> 0:12:59.679 five trillion and then some this year, does that mean 0:12:59.720 --> 0:13:02.559 things necessarily slow down? Because I know from my panel 0:13:02.880 --> 0:13:06.439 they all seem gangbusters that it would continue into two 0:13:06.520 --> 0:13:08.079 But what are you hearing? I mean, money is so 0:13:08.160 --> 0:13:10.520 cheap it's easy for They've also got a lot of 0:13:10.880 --> 0:13:14.679 you know, cash to play around with. Yeah, look, money 0:13:14.880 --> 0:13:17.920 is cheap, and that's often sited as one of the 0:13:18.000 --> 0:13:20.120 reasons we're seeing this this great market. What I would 0:13:20.120 --> 0:13:21.640 say to that is money has been cheap for a 0:13:21.640 --> 0:13:23.880 long time, So I don't think it's just cheap money. 0:13:24.480 --> 0:13:27.120 I think there's a lot of momentum going through the 0:13:27.200 --> 0:13:28.880 m and A market at the moment. Some of that 0:13:28.960 --> 0:13:32.679 is obviously catch up after we had that slowdown during COVID, 0:13:33.320 --> 0:13:35.760 and I think some of that will continue into two. 0:13:35.840 --> 0:13:39.200 The conversations we've been having, we had a common taxmen 0:13:39.240 --> 0:13:42.120 Aban Core on Blueboo TV is talking about the strength 0:13:42.200 --> 0:13:45.640 of the pipeline. They actually think it's stronger than the 0:13:45.679 --> 0:13:49.080 current market conditions we're seeing, which would suggest going into two, 0:13:49.080 --> 0:13:50.840 we're going to have a you know, a lot of 0:13:50.880 --> 0:13:53.199 deals backed up ready to go. Whether it continues through 0:13:55.200 --> 0:13:57.800 two stories, who knows um. I think a lot of 0:13:57.800 --> 0:13:59.880 that will depend on on what we see, you know, 0:14:00.080 --> 0:14:03.640 in sort of global affairs, what we see the domestic economy, 0:14:03.679 --> 0:14:06.960 but also obviously some of the sovereign risks that that 0:14:07.040 --> 0:14:09.480 was Bloomberg News deals reporter Ed Hammond, And we should 0:14:09.480 --> 0:14:12.040 note that Ed mentioned there is one potential fly in 0:14:12.080 --> 0:14:14.320 the m and a ointment on the horizon. That would 0:14:14.360 --> 0:14:17.520 be rising interest rates. That's the flying an ointment on everything. 0:14:17.600 --> 0:14:20.080 It is. And we keep hearing from feed officials It's 0:14:20.080 --> 0:14:21.800 not gonna happen next year. It's not gonna maybe not 0:14:21.840 --> 0:14:25.760 happen until we shall see. Maybe it's the only thing. 0:14:25.760 --> 0:14:29.520 It's not a flying anpointment of his inflation, right, what 0:14:29.560 --> 0:14:31.240 do you mean, Well, it's the point is is to 0:14:31.280 --> 0:14:35.400 curb inflation. That's why our interest rates go higher. That's true, right, exactly, alright. 0:14:35.480 --> 0:14:38.240 Still ahead on Bloomberg Business Week, a panel of investing 0:14:38.240 --> 0:14:42.120 in legal minds question the effectiveness of environmental, social, and 0:14:42.200 --> 0:14:45.280 governance initiatives, and one of them, black Rock's former chief 0:14:45.320 --> 0:14:49.240 investment officer for sustainable Investing, is among the skeptics. This 0:14:49.520 --> 0:14:58.840 is Bloomberg broadcasting from the financial capital of the world, 0:14:59.000 --> 0:15:02.440 Bloomberg he Love Rio in New York, to Washington, d C. 0:15:02.640 --> 0:15:07.360 Bloomberg to Boston, Bloomberg one oh six one, to San Francisco, 0:15:07.440 --> 0:15:11.280 Bloomberg nine to the country Sirius XM Chamber one ninety 0:15:11.480 --> 0:15:15.000 and around the globe. The Bloomberg Business and Bloomberg Radio 0:15:15.120 --> 0:15:19.240 dot com. This is Bloomberg Business Week with Carol Messer 0:15:19.480 --> 0:15:24.800 and Bloomberg Quick Takes Tim Stenovan on Bloomberg Radio. At 0:15:24.840 --> 0:15:27.440 this week's Bloomberg Equality Summit, I spoke with a panel 0:15:27.480 --> 0:15:29.560 that's taking some of the shine off the concept of 0:15:29.600 --> 0:15:33.760 investing in environmental, social and governance initiatives. The Agitators, a 0:15:33.840 --> 0:15:36.320 group drawing attention to the downside of e s G. 0:15:36.840 --> 0:15:40.200 On the panel Tarek Fancy, founder and CEO of the 0:15:40.320 --> 0:15:43.680 Roomy Initiative, also the former Chief investment officer for sustainable 0:15:43.720 --> 0:15:46.840 investing at Blackrock. Lord Murphy, president of the law firm 0:15:46.880 --> 0:15:49.360 that bears her name. A pioneer of the corporate civil 0:15:49.440 --> 0:15:52.280 rights audit, She's known for conducting racial audits of Facebook 0:15:52.320 --> 0:15:56.000 and Airbnb. Also Barbara and Bernard, founder in c IO 0:15:56.200 --> 0:15:59.440 at Windcrest Capital. This excerpt of our conversation begins with 0:15:59.480 --> 0:16:03.320 Turk expressing his skepticism of e s G. The answer 0:16:03.360 --> 0:16:06.600 to climate change is clearly. I mean, Nobel Prize winning 0:16:06.600 --> 0:16:08.800 economists are telling us it has to be policy. Reform 0:16:09.160 --> 0:16:11.880 starts with a price on carbon. That is a systemic 0:16:11.960 --> 0:16:15.600 reform um that you know addresses a systemic problem that 0:16:15.680 --> 0:16:18.480 has to be government action. And I think that the 0:16:18.520 --> 0:16:21.160 economic system is being so seized by a set of 0:16:21.240 --> 0:16:24.440 narratives that have underlie the system and are almost invisible 0:16:24.760 --> 0:16:26.720 that emerged in the eighties that tell us that free 0:16:26.720 --> 0:16:30.239 market solve all problems, that even when faced with market failures, 0:16:30.320 --> 0:16:33.320 you know, thirteen years after the financial crisis, we're still 0:16:33.320 --> 0:16:36.160 sort of hitching our ride to a set of solutions 0:16:36.160 --> 0:16:38.080 that don't really work. And the problem is the asset 0:16:38.120 --> 0:16:41.680 management industry is incentivized today. I mean, no one wants 0:16:41.720 --> 0:16:44.760 taxes and regulation, even if that's clearly the solution, right, 0:16:44.800 --> 0:16:46.680 and climate change is gonna cost money. Someone's gonna have 0:16:46.720 --> 0:16:49.840 to pay, and so faced with that reality, there's an 0:16:49.840 --> 0:16:52.560 incentive to sort of take one hand and hold off 0:16:52.600 --> 0:16:54.880 taxes and regulation with a set of narratives that say 0:16:54.920 --> 0:16:57.760 that business will solve these problems all by themselves, kind 0:16:57.760 --> 0:16:59.960 of like a sports game where you know, the athlete 0:17:00.000 --> 0:17:02.280 now we need any referees, will self referee, and good 0:17:02.320 --> 0:17:06.159 sportsmanships the answer. And then into the growing social angst 0:17:06.160 --> 0:17:08.800 that starts to develop because people see nothing getting done 0:17:09.520 --> 0:17:11.840 on these major problems, then there's an incentive to sell 0:17:11.880 --> 0:17:14.320 a bunch of products that for the most part have 0:17:14.440 --> 0:17:16.680 no empirical evidence at all that they create any kind 0:17:16.680 --> 0:17:20.760 of impact or lower emissions, but are lucrative, particularly for 0:17:20.920 --> 0:17:24.879 financial you know, for asset managers who are facing feet 0:17:24.880 --> 0:17:29.120 pressure for you know, largely increasingly commoditized products. Bart Whare 0:17:29.119 --> 0:17:31.040 wants you to come in on this because over the 0:17:31.080 --> 0:17:33.920 summer we did see the European market for sustainable investing 0:17:34.320 --> 0:17:37.800 contracted by two trillion. There was kind of a rethink, 0:17:37.960 --> 0:17:41.320 right because of the introduction of anti greenwashing rules. So 0:17:41.440 --> 0:17:43.840 does that tell you that maybe we're getting smarter about 0:17:43.920 --> 0:17:45.600 E s G or do you still think a lot 0:17:45.680 --> 0:17:47.560 of the E s G that's out there is nonsense. 0:17:48.520 --> 0:17:51.280 I think E SG needs to be disrupted. I believe 0:17:51.280 --> 0:17:53.240 an E s G two point out. An E s 0:17:53.280 --> 0:17:56.880 G two point oh is about materiality and authenticity, and 0:17:56.920 --> 0:17:59.800 that's the portfolio that sits at the intersection of profit 0:17:59.840 --> 0:18:01.720 and purpose. So I believe in a lot of what 0:18:01.840 --> 0:18:04.640 Terrek said, but I'm not as jaded. I'm hopeful um 0:18:04.760 --> 0:18:07.160 And so I think E s G one point oh 0:18:07.520 --> 0:18:11.640 was either investing in naturally low carbon tech companies or 0:18:11.760 --> 0:18:15.160 the index hugging just slightly overweight tech slightly underweight energy, 0:18:15.359 --> 0:18:18.760 and that is nonsense, and that is grainwashing. And when 0:18:18.800 --> 0:18:20.920 you talk about this big numbers in E s G, 0:18:21.400 --> 0:18:24.800 the problem is seventy E s G money is passively invested. 0:18:25.359 --> 0:18:28.000 So we will not have an energy transition unless we 0:18:28.080 --> 0:18:31.200 have an investor transition. And so the reason Engine one 0:18:31.240 --> 0:18:33.800 point oh was so popular. Engine number one was so 0:18:33.880 --> 0:18:37.240 popular that I think was it enabled these large passive 0:18:37.280 --> 0:18:41.199 asset managers to take an E s G box without 0:18:41.280 --> 0:18:45.320 changing their passive investment strategy. So I'd say we've gone 0:18:45.320 --> 0:18:48.600 from passive to passive aggressive. And if I look at 0:18:48.640 --> 0:18:51.800 that strategy, if even if they get everything they want, 0:18:51.840 --> 0:18:54.639 what are they doing accelerating the demise of Exxon Like, 0:18:54.720 --> 0:18:57.320 I'm not sure that's the answer either. I think E 0:18:57.520 --> 0:19:00.320 s G two point oh is active management because I 0:19:00.320 --> 0:19:03.880 think you get what you inspect, not what you expect. Laura, 0:19:03.960 --> 0:19:06.159 come on in, because I think you have created a 0:19:06.200 --> 0:19:09.359 new format for companies to really take an inward look. 0:19:09.840 --> 0:19:11.639 Talk to us about what we're doing. Do you really 0:19:11.720 --> 0:19:15.560 think companies are something's happening that they are looking much 0:19:15.600 --> 0:19:18.600 more inward when it comes to their biases and how 0:19:18.600 --> 0:19:21.240 they approach customers. And clients and how they do things. 0:19:21.480 --> 0:19:25.679 We don't want greenwashing type activities in the civil rights space. 0:19:25.800 --> 0:19:30.800 It's you know, over uh five corporations said something after 0:19:30.840 --> 0:19:36.000 the murder of UM George Floyd. And you know, there 0:19:36.040 --> 0:19:39.679 were a lot of good statements, and there were charitable contributions, 0:19:39.720 --> 0:19:43.000 and there were a few good programs. But companies need 0:19:43.040 --> 0:19:46.800 to go deeper. And so I've outlined what I think 0:19:47.040 --> 0:19:50.640 is a set of baseline practices for companies to use 0:19:51.160 --> 0:19:56.120 if they are serious about ending discrimination within their own walls. 0:19:56.720 --> 0:20:00.480 And it goes further than diversity, equity and inclusion. I mean, 0:20:00.480 --> 0:20:03.880 we're asking questions a lot. We want companies to ask 0:20:03.960 --> 0:20:08.200 questions like are my products hurting communities? Um? Do people 0:20:08.200 --> 0:20:12.880 with disabilities have access to our our our platform? Are 0:20:12.920 --> 0:20:19.280 we locating toxic waste plants in minority communities only? You know, 0:20:19.800 --> 0:20:25.000 is our facial recognition software working on people with darker skin? 0:20:25.520 --> 0:20:29.240 And how do we address those practices and make companies 0:20:29.240 --> 0:20:32.520 more equitable so that they stopped hurting people. That was 0:20:32.600 --> 0:20:35.360 Laura Murphy, Barbara and Bernard and Taric Fancy. Check out 0:20:35.359 --> 0:20:37.879 that full conversation. You can do that by going to 0:20:37.880 --> 0:20:40.960 Bloomberg Live. Dot Com clicking on the Equality Summit. You're 0:20:40.960 --> 0:20:44.040 listening to Bloomberg Business Week. Up next Chipotle chairman and 0:20:44.080 --> 0:20:47.119