Rio CEO Says World Must Sacrifice Growth to Meet Climate Goals

Rio CEO Says World Must Sacrifice Growth to Meet Climate Goals(Bloomberg) -- Rio Tinto Group’s chief executive officer said the world must be prepared to sacrifice growth to achieve climate goals as the natural resources industry comes under increasing pressure to curb emissions.“The challenge for the world, and for the resources industry, is to continue the focus on poverty reduction and wealth creation, while delivering climate action,” Jean-Sebastien Jacques told investors on Wednesday. “This will require complex trade-offs.”Jacques said consumers, governments and shareholders must all be willing to make sacrifices -- in the form of lower consumption, growth and returns -- if climate targets are to be met. The mining industry, a key pillar of growth in many developing countries, is facing investor demands to cut the scale of emissions created by its products, from thermal coal to iron ore.“There are no easy answers,” Jacques said. “There is no clear pathway right now for the world to get to net zero emissions by 2050. The ambition is clear but the pathway is not.”Earlier, Rio reiterated its position on refusing to set any targets for reducing the carbon emissions generated by its customers, taking a firm stance on an issue that’s quickly dividing the natural resources industry.Instead, the world’s No. 2 mining company put the focus on its own operations. In a presentation on Wednesday accompanying its full-year earnings, Rio said its own business will be carbon neutral by 2050 and promised to spend $1 billion over the next five years to make that happen.The announcement draws a sharp line between Rio and other extraction companies amid a debate about who bears responsibility for Scope 3 emissions -- the pollution created when customers burn or process a company’s raw materials. The producer can take a different approach on addressing Scope 3 emissions because it sold off coal mines and doesn’t have oil assets, according to Jacques.“People are totally mixing drinks, because Scope 3 for a company like Shell and for a company like Rio Tinto is completely different,” Jacques said. “I’m not selling coal, I’m not selling carbon, and I’m not selling oil and gas -- and therefore we’re not starting from the same point.”Still, Rio has huge iron ore operations that create the vital ingredient for steelmaking, a highly polluting industry that involves adding coking coal to make carbon steel. It was a surge in iron ore prices last year that helped Rio post an 18% increase in underlying earnings to the highest since 2011.Rio argues any targets on its Scope 3 emissions would be impossible to meet because it has no control over how steelmakers use iron ore.It’s a stance that sets Rio at odds with its biggest rival, BHP Group, which has urged the industry to take responsibility. Both BHP and Vale SA have promised to introduce targets on Scope 3 emissions. In the oil industry, BP Plc has vowed to cut almost all its customer emissions by 2050.Yet, no one is providing much detail about their plans and the deadlines are usually decades away.While Rio’s refusal to set targets may draw the ire of some investors who have been pushing for concrete plans, the company may find support elsewhere. Last week, the CEO of Glencore Plc, the biggest coal shipper, criticized BP’s announcement.“2050 is a long way to go, and we don’t want to come out with wishy-washy ideas,” said Glencore boss Ivan Glasenberg. Instead, Glencore said its Scope 3 emissions would fall as coal mines are depleted.Rio has previously said it will work with China’s top steel producer, China Baowu Steel Group, to find methods to lower the sector’s emissions and improve its environmental performance.On Wednesday, the company also said that any future growth projects between now and 2030 would also have to be carbon neutral. It plans to expand the electrification of equipment and use more renewable energy.To contact the reporters on this story: Thomas Biesheuvel in London at [email protected];David Stringer in Melbourne at [email protected] contact the editors responsible for this story: Lynn Thomasson at [email protected], Dylan Griffiths, Nicholas LarkinFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Salesforce Loses Co-CEO Block Who Propelled Growth Strategy

Salesforce Loses Co-CEO Block Who Propelled Growth Strategy(Bloomberg) -- Inc. Co-Chief Executive Officer Keith Block stepped down Tuesday after revamping the software maker’s growth strategy, helping fuel a fourfold increase in revenue during his tenure.Block garnered less public attention than founder and Chief Executive Officer Marc Benioff during his seven years at the market leader for customer-relations software, but took command of day-to-day operations behind the scenes. Block, promoted from president to chief operating officer to co-CEO with Benioff in August 2018, professionalized the sales organization, taking lessons from his 26-year stint at Oracle Corp. He persuaded Benioff the company should tailor software for different industries, which expanded the universe of customers. And, as co-CEO, Block allowed Benioff time to focus on his many political and philanthropic initiatives.“Keith has really inspired us to be much more committed to verticals and vertical solutions than ever before,” Benioff said on a conference call with analysts. “It’s going to be a huge part of his legacy here.”Benioff said he would partner with Block in his undisclosed “next chapter.” The former co-CEO will remain an adviser, the company said.“Keith Block’s departure as CEO dims enthusiasm over a strong 4Q, as he’s been critical to successes over the past seven years and leaves a short-term vacuum,” Anurag Rana, an analyst at Bloomberg Intelligence, wrote in a research note. Salesforce shares declined about 2.5% in extended trading after the announcement.Despite Block’s departure, Benioff tried to reassure investors that Salesforce has a deep leadership bench. The company recently promoted Bret Taylor, the former product head, to chief operating officer and gave him additional responsibilities, suggesting he will become even more consequential in Block’s absence.Block’s focus on selling industry-specific software will remain prominent at the company, which also Tuesday announced a $1.3 billion acquisition of Vlocity Inc. to bolster that effort. Vlocity’s apps focus on six specific industries and help subscribers manage relationships with their customers, including T-Mobile US Inc. and TELUS Corp.Salesforce was an investor in the San Francisco-based startup founded by former Oracle executive David Schmaier. Vlocity’s software is built on Salesforce’s platform and Schmaier consulted Benioff and other Salesforce executives before starting the business, he said in a 2018 interview. Vlocity had a habit of locating its offices in Salesforce-occupied buildings, ensuring it would remain visible to the cloud-software pioneer.Vlocity’s current headquarters is in the Salesforce Tower, suggesting a relocation won’t be necessary if the deal closes as expected in the fiscal second quarter.Though Block was known for his sales acumen, he wanted to broaden his duties, which was part of the reason he took on a more diversified co-CEO role, Benioff said.Benioff and Block had sought to maintain Salesforce’s annual growth rates of about 25% through frequent acquisitions and international expansion. By the end of the fiscal year, the company is on target to have doubled its annual revenue over the past three years, spurred by snapping up MuleSoft Inc. in 2018 and Tableau Software Inc. in 2019.Sales will be as much as $21.1 billion in fiscal 2021, the San Francisco-based company said. Analysts projected $20.9 billion, according to data compiled by Bloomberg, which is at the top end of what the company had forecast in early December.In the fiscal fourth quarter, Salesforce reported Tuesday that revenue gained 35% to $4.85 billion, marking the second consecutive period of more than 30% year-over-year growth. Analysts, on average, projected $4.75 billion. Earnings, excluding some items, were 66 cents a share, topping analysts’ estimates of 56 cents.Revenue from Sales Cloud, the company’s flagship product, grew about 17% to $1.23 billion in the quarter ended Jan. 31. The company leads the market for sales-tracking software, but growth rates have slowed down, prompting Salesforce to diversify its business.Service Cloud sales increased 26% to $1.22 billion. The software maker offers this tool so companies can communicate with field employees and customers, a space where it faces competition from ServiceNow Inc., Zendesk Inc. and others.To contact the reporter on this story: Nico Grant in San Francisco at [email protected] contact the editors responsible for this story: Jillian Ward at [email protected], Andrew Pollack, Edwin ChanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

One of China’s Biggest Bubble Tea Chains Seeks $400 Million U.S. IPO

One of China’s Biggest Bubble Tea Chains Seeks $400 Million U.S. IPO(Bloomberg) -- Naixue’s Tea, one of the biggest bubble tea chains in China, has filed confidentially for a U.S. initial public offering that could raise as much as $400 million, according to people familiar with the matter.Bloomberg News reported on Tuesday that the company, also known as Nayuki, has been working with advisers on the share sale that could take place as soon as this year. The firm is also looking to raise about $50 million to $100 million in a pre-IPO funding round, the people have said, who asked not to be identified as the discussions are private.Naixue, started by Shenzhen Pindao Restaurant Management Co. in 2010, has more than 230 stores across China, according to its website. The chain sells fresh-fruit tea -- some with cheese foam on the top -- as well as cold brew tea and baked goods. HEYTEA, another popular bubble tea chain, is among its biggest rivals in the country.Details of Naixue’s offering including timeline, size and listing venue could change as the novel coronavirus outbreak is weighing on market sentiment, the people said. A representative for Shenzhen Pindao didn’t respond to requests for comment.Chinese companies raised about $3.7 billion through U.S. listings last year, led by DouYu International Holdings Ltd. and Luckin Coffee Inc., according to data compiled by Bloomberg. Citic Capital Acquisition Corp. is among the nine Chinese firms that completed their U.S. first-time share sales this year, raising a total of $722 million, the data show.(Updates that the company has filed for IPO confidentially in headline and lead.)To contact Bloomberg News staff for this story: Dong Cao in Beijing at [email protected];Vinicy Chan in Hong Kong at [email protected] contact the editors responsible for this story: Fion Li at [email protected], Joanna OssingerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Stocks Slide With U.S. Futures; Treasuries Advance: Markets Wrap

Stocks Slide With U.S. Futures; Treasuries Advance: Markets Wrap(Bloomberg) -- Stocks fell in Europe and Asia on Wednesday and U.S. index futures erased an advance following another strong sell-off on Wall Street. Treasuries extended gains.Declines in travel and leisure shares led the Stoxx Europe 600 Index lower for a fifth straight session. Futures on the three main American gauges erased an earlier gain to turn lower, a day after the S&P 500 Index fell 3% to cap its worst two-day slide since 2015. Korean and Australian stocks led losses in Asia. South Korea’s won fell toward its weakest since 2016 after the country reported a further escalation in coronavirus cases. Ten-year Treasury yields dropped, on track for another record-low close, while the yen gave up some recent gains.Risk assets are showing few signs of a rebound as the number of global coronavirus cases continues climbing. South Korea said its national total rose to more than 1,000, while American health officials Tuesday warned that they expect the epidemic to spread in the U.S. Traders may be looking out for further signs of policy accommodation after American central bankers said they are closely monitoring the spreading virus, though it’s “still too soon” to say whether it will change the outlook.“The ultimate impact remains entirely unknown at this stage,” said Eleanor Creagh, a Sydney-based strategist at Saxo Capital Markets. “And uncertainty is the enemy of conviction.”Elsewhere, West Texas-grade crude oil slipped below $50 a barrel after slumping for two straight sessions.These are some key events coming up:Earnings keep rolling in from companies including: Baidu Inc., Best Buy Co. Inc., Occidental Petroleum Corp. and Dell Technologies Inc. on Thursday; and London Stock Exchange Group Plc on Friday.The Bank of Korea announces its policy decision on Thursday, with rising risks of an interest-rate cut.U.S. jobless claims, GDP and durable goods data are out Thursday.Japan industrial production, jobs, and retail sales figures are due on Friday.These are the main moves in markets:StocksThe Stoxx Europe 600 Index declined 1.8% as of 8:50 a.m. London time.Futures on the S&P 500 Index fell 0.4%.Nasdaq 100 Index futures decreased 0.7%.South Korea’s Kospi index declined 1.3%.The MSCI Asia Pacific Index dipped 1.2%.CurrenciesThe Bloomberg Dollar Spot Index was little changed.The euro increased 0.1% to $1.0891.The British pound declined 0.2% to $1.2974.The Japanese yen was little changed at 110.23 per dollar.BondsThe yield on two-year Treasuries fell six basis points to 1.17%.Germany’s 10-year yield decreased one basis point to -0.52%.Britain’s 10-year yield dipped two basis points to 0.496%.CommoditiesGold advanced 1.1% to $1,652.77 an ounce.Silver strengthened 0.9% to $18.17 per ounce.\--With assistance from Andreea Papuc and Adam Haigh.To contact the reporter on this story: Todd White in Madrid at [email protected] contact the editors responsible for this story: Sam Potter at [email protected], Yakob PeterseilFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Disney's Big Secret Is Finally Out

Disney's Big Secret Is Finally Out(Bloomberg Opinion) -- What a day for the Walt Disney Co. to let out its biggest secret.Just as investors were engrossed by news updates on the worsening coronavirus and its convulsive effect on global financial markets, Disney delivered another jolt by announcing longtime CEO Bob Iger was stepping down. Huh? It was the last thing shareholders saw coming. The company’s choice wasn’t even who most people expected. Bob Chapek, the head of Disney’s theme parks business, is taking over, effective immediately. Iger will remain chairman through to the end of 2021.It’s the most significant change to happen to the entertainment giant in more than a decade. Iger had become almost as much the face of the company as Walt Disney was himself, and was responsible for building it into the globally admired brand and content powerhouse that it is now. While Iger, at 69 years old, had been inching closer to retirement, it wasn’t supposed to come until next year. Shares of Disney fell 6% in after-hours trading, as investors tried to pick their jaws up off the floor. Anyone who read Iger’s memoir, “The Ride of a Lifetime,” which was released last year, might have been led to believe that another top Disney executive, Kevin Mayer, was next in line for the keys to the Magic Kingdom. Mayer oversees Disney’s new streaming-TV operations — the very business at the center of the new Disney. It’s become the focus of attention both inside and outside the company in recent months as Disney entered the industry’s streaming wars with the wildly successful launch of Disney+. Iger made repeated mentions of Mayer in the book, and few of Chapek. Mayer is “a master strategist and dealmaker,” Iger wrote. “A CEO couldn’t ask for a better strategic partner.” Partner. The question now is, will Mayer stay, after being passed over for what might be the most enviable job in corporate America? Even though Iger, during a conference call held for investors and analysts Tuesday, tried to soothe concerns about the seemingly abrupt move, it’s hard not to wonder about a larger backstory, one where there’s potentially some internal friction. As Iger kept putting off retirement over the years, other successor candidates seemed to get sick of waiting and left.Not choosing Mayer does raise an even bigger question: How do Iger and the company view the future of Disney? If only for their respective roles, Chapek in some ways represents Disney’s past, while Mayer represents the new Disney. All that being said, Chapek is a widely respected leader, and this certainly wasn’t a decision anyone at Disney would make lightly. From one Bob to another, Iger said Tuesday that it was the right time to transition to a new CEO and that Chapek “is absolutely the right person.” There’s little reason to question that. And it should be remembered, when Iger was first named CEO, investors weren't so sure about him, either.There is one telling nugget from Iger’s book that could be seen as presaging today’s turn of events. Passing over all his transformative dealmaking — buying Pixar, Marvel, Lucasfilm and then the big one, Rupert Murdoch’s 21st Century Fox — Iger instead highlights opening Disney’s Shanghai park as one of the defining moments of his career. Chapek played a big role in that. Chapek “oversaw the largest capital expansion in the history of our parks,” Iger said Tuesday, highlighting the Shanghai opening, as well as the “Star Wars” Galaxy Edge attraction at its U.S. parks and the company’s large fleet of cruise ships. Iger added that he and the board had identified Chapek as his likely successor “quite some time ago.”Iger isn’t saying goodbye just yet. He explained that part of the reason for stepping aside now is so that he can focus more on the creative side of Disney. What he wants to accomplish more than anything before he leaves is “getting everything right creatively.” Content is more important than ever as Disney almost single-handedly props up the box office and lure fans to its streaming services, all the while integrating the Fox assets and keeping alive its traditional media networks that still drive the bulk of its profits. But that’s still only part of the reason for choosing to step down now. Whatever the case, it’s the end of an era for Disney; Iger has left an indelible mark, and left Disney better than it was before him. Chapek has big shoes to fill. To contact the author of this story: Tara Lachapelle at [email protected] contact the editor responsible for this story: Beth Williams at [email protected] column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

U.S. regulator: Airlines should complete inspections on 737 MAX panels before flying

U.S. regulator: Airlines should complete inspections on 737 MAX panels before flyingThe Federal Aviation Administration (FAA) on Tuesday proposed that airlines complete inspections on a key component that could make Boeing 737 MAX airplanes vulnerable to lightning strikes and interference from high-power radio frequency transmitters before returning to service. Boeing Co in December issued a service bulletin that disclosed procedures for detailed inspections and repairs or replacement if needed for panels on top of the engine housing that may not ensure adequate shielding of the underlying wiring. Boeing said on Tuesday it agreed with the FAA recommendation.