WSJ CEO Council: Leaders From Tesla, Intel, Reddit, Pfizer And More Discuss Challenges Facing Business – The Wall Street Journal

New Zealand’s Prime Minister Jacinda Ardern.Ralph Alswang for The Wall Street Journal

New Zealand’s Prime Minister Jacinda Ardern said the Omicron variant of Covid-19 is a reason for concern, but it hasn’t derailed the country’s plans to gradually reopen its border next year.

“It is a time to be cautious not a time to panic,” Ms. Ardern told The Wall Street Journal’s CEO Council. “It sounds like only a matter of weeks before we have the information we need to grapple with it.”

The remote South Pacific country, with a population of around five million, has had one of the world’s strictest rules in place for limiting the spread of Covid-19 and the emergence of Omicron hasn’t caused it to tighten measures materially. New Zealand has stopped travel from several countries in southern Africa.

The country has had about 12,000 cases of Covid-19 and fewer than 50 deaths, among the lowest rates globally of illness and mortality from the virus. No cases of Omicron have been reported in New Zealand so far.

“We haven’t changed any of our reopening plans as yet as a result so we intend to move forward as safely as we can,” Ms. Ardern said. “But I think the whole world would like to see vaccines continue to make a difference for variants.”

New Zealand’s border closure, in place since March last year, will gradually be eased from mid-January for travelers who are vaccinated against Covid-19, the government has said. The first step will be to allow vaccinated New Zealand citizens traveling from Australia to enter without undergoing the current mandatory quarantine.

The easing of restrictions will be broadened from mid-February to include New Zealand citizens and eligible visa holders traveling from other countries and then to foreign nationals from the end of April onward.

Bridgewater Associates founder Ray Dalio, right, says he worries about a possible U.S.-China decoupling.Ralph Alswang for The Wall Street Journal

Bridgewater Associates founder Ray Dalio said investing in China was important because of the benefits of portfolio diversification and because of China’s continuing economic growth.

Mr. Dalio said that when he first started visiting China half a lifetime ago, he would hand out $10 calculators to senior officials that they thought were miracles. Noting how much China had advanced since then, Mr. Dalio said, “There’s been a China miracle.”

“In China’s case they know that it’s very important to have that market economy and to develop those things and that the underpinnings are not the extremism that is widely being perceived. That doesn’t meant there’s not a tightening up… but because of the notion of diversification and the power of what’s coming, I think it’s important to invest in China,” Mr. Dalio said Tuesday at The Wall Street Journal’s CEO Council.

He added that Bridgewater thinks about investing in China the same way it thinks through investing in the roughly 40 countries it invests in and that the firm invests more in asset classes than in individual companies. But asked whether human-rights considerations would ever prompt him to exit China, he said, “If it was clear that there were violations so it was repugnant to me and I knew enough about it, I would not invest there.”

A longtime China bull whose giant hedge fund has counted the Chinese government and other Chinese institutions as among its largest clients, Mr. Dalio last week made controversial comments on human-rights considerations when investing in China. “I can’t be an expert on those types of things,” he told CNBC, adding later, “should I not invest in the United States because other things—our own human rights issues or other things?”

The comments sparked backlash from, among others, Senator Mitt Romney (R-Utah), who wrote on Twitter that Mr. Dalio’s “feigned ignorance of China’s horrific abuses and rationalization of complicit investments there is a sad moral lapse.”

On an internal Bridgewater call Thursday, Mr. Dalio said he had answered the question poorly but that the firm’s investments in China were important to consider. Mr. Dalio clarified his CNBC comments in a Sunday LinkedIn post, writing he believes human rights are important and that he believes in America’s system. He wrote he had been trying to explain that China’s approach to governing “is a more autocratic approach that is like a strict parent. I was not expressing my own opinion or endorsing that approach.”

Bridgewater recently catapulted into the ranks of one of the biggest foreign managers of private funds in China, raising the equivalent of $1.25 billion for its third investment fund in China.

Mr. Dalio on Tuesday also said he was worried about the possibility of a U.S.-China decoupling, noting the interconnectedness between U.S. and Chinese businesses making products he described as “an essential part of our well-being,” and about the prospect of a war between the two countries.

He also touched on the stock market, saying it wasn’t a bubble, and that crypto “has reasons for rationality.” He said crypto hadn’t been hacked and had gained in perceived value over the last 11 years, and that while it was inferior to other assets, it had to be considered in an environment where governments were printing money.

Army Gen. Mark Milley will speak amid heightened U.S. tensions with Moscow and the Taliban.Alex Wong/Getty Images

Army Gen. Mark Milley, the Chairman of the Joint Chiefs of Staff, will be speaking at The Wall Street Journal CEO Council summit amid heightened tensions over a mounting Russian troop presence near Ukraine, and as Afghanistan reels in the aftermath of the U.S.’s hasty summer withdrawal.

Earlier Tuesday, President Biden and Russian President Vladimir Putin spoke over a secure video line to address what the U.S. has described as “large and unusual” troop movement near Russia’s border with Ukraine in recent weeks.

Fears of a Russian invasion of Ukraine grew last week, with U.S. officials citing new intelligence reports about a troop buildup on the border.

In Afghanistan, military officials fear the emergence of threats less than three months after the U.S. withdrawal.

Afghans are facing the prospect of mass poverty and hunger amid a nationwide economic collapse. And the Taliban, which reclaimed control of the country as coalition troops left, has reimposed harsh restrictions, particularly against women.

SEC Chairman Gary GenslerJustin T. Gellerson for The Wall Street Journal

WASHINGTON—The Securities and Exchange Commission is considering requiring public companies to include the broadest possible measure of greenhouse-gas emissions as part of new climate-change rules the agency hopes to propose in early 2022, Chairman Gary Gensler said Tuesday.

If a publicly traded company tells investors that it plans to eliminate greenhouse-gas emissions, it might have to meet the highest of three standards, Mr. Gensler said at The Wall Street Journal’s CEO Council Summit.

“I would note that there are many companies now making commitments to the public, and thus to their shareholders, that they might on some future day have what’s called net-zero emissions,” Mr. Gensler said. “If these companies are making such commitments, then we’re considering what disclosures they have to the public around those commitments.”

Climate-related financial disclosures comprise three levels of reporting for greenhouse-gas emissions. The narrowest, known as Scope 1, refers to emissions from a company’s own operations. Scope 2 deals with emissions from the company’s use of electricity, steam, heating or cooling. Scope 3 measures emissions from suppliers and other firms in the company’s value chain.

Soon after taking his job in April, Mr. Gensler asked SEC staff for recommendations on whether companies should report Scope 3 emissions, and if so, under what circumstances. Critics, including some companies, say it would be difficult to include that level of granularity in disclosures for which they can be held liable.

Mr. Gensler said Tuesday that the agency was still considering whether to mandate all three levels of reporting from U.S. public companies, particularly those that have goals to eliminate greenhouse-gas emissions altogether.

Sen. Joe Manchin, Democrat of West Virginia, hasn’t signed onto the Build Back Better bill.Alex Brandon/Associated Press

Sen. Joe Manchin (D., W.Va.) will take the stage at the The Wall Street Journal CEO Council summit at a pivotal moment for Democrats in Washington. In the 50-50 Senate, Mr. Manchin is a central figure in the party’s quest to pass their roughly $2 trillion education, healthcare and climate package before Christmas.

He hasn’t signed onto the Build Back Better bill, which Democrats and the White House have slimmed down from $3.5 trillion in an effort to win his support. The bill’s impact on inflation and the deficit remain concerns for Mr. Manchin, who is also seeking to remove a paid leave provision from the legislation.

Mr. Manchin has also criticized the Biden administration’s vaccine rules for private employers, signaling that he may side with a Republican effort to repeal the regulations.

The Justice Department is scrutinizing whether companies are abiding by the terms of past criminal settlements with the government, Deputy Attorney General Lisa Monaco said, promising more aggressive white-collar and antitrust enforcement.

Ms. Monaco signaled the department could put more companies on notice after it recently informed two–Swedish telecom-equipment manufacturer Ericsson AB and British bank NatWest Group PLC—that they had breached the terms of probationary agreements allowing them to avoid prosecution.

“At the end of the day, we cannot have a system where it appears that entering into one of these agreements is just the cost of doing business,” Ms. Monaco said Tuesday at The Wall Street Journal’s CEO Council. “You are going to see, in the days and weeks to come, a desire and a focus on making sure companies are living up to those commitments, and when they don’t, there will be consequences.”

Her comments were in line with other statements from the Biden administration that it would further crack down on corporate crimes such as involvement in overseas corruption and money laundering.

Prosecutors have sought since the 2008 financial crisis to bring enforcement actions that involve more than just financial penalties. Instead of taking companies to court, the Justice Department in many fraud cases has come to rely on probationary settlements known as deferred or nonprosecution agreements, which require companies to admit wrongdoing, pay fines and improve how they monitor employees’ conduct.

Critics have said that many big companies, including some Wall Street banks, repeatedly get the probationary treatment, showing that such outcomes don’t adequately deter wrongdoing and that provisions for ending those agreements aren’t applied often enough.

“We will invoke those breach clauses in the agreements that we enter into with corporations, because there has to be consequences for not living up to those agreements,” Ms. Monaco said.

She also promised tougher antitrust enforcement, noting that the Justice Department has more ongoing investigations now than at any time in the last 30 years, including some before grand juries.

“We also have our prosecutors preparing for more trials right now than at any time in the last decade,” Ms. Monaco said.

Among current cases alleging criminal violations of the antitrust laws, the department is prosecuting top executives in the chicken industry for alleged price fixing.

In civil matters, the Justice Department in recent months has blocked a major insurance-industry merger between Aon PLC and rival Willis Towers Watson PLC; filed aggressive challenges to a sugar-industry merger and a partnership between American Airlines Group Inc. and JetBlue Airways Corp.; and withdrawn from a real-estate industry settlement in order to take a deeper look at whether industry practices keep some broker commissions artificially high.

“We are very busy, and we are moving out aggressively to protect consumers, to protect workers and to protect competition, whether it’s from killer acquisitions or other forms of consolidation and anticompetitive practices,” Ms. Monaco said.

—Brent Kendall and Dave Michaels contributed to this post.

BP PLC Chief Executive Bernard LooneyThe Wall Street Journal

BP PLC Chief Executive Bernard Looney said that investors are increasingly buying into the oil giant’s plan to transform itself from a fossil fuel-focused company into a big player in renewable energy.

Mr. Looney, speaking at The Wall Street Journal’s CEO Council on Tuesday, said BP has to convince investors it can simultaneously remake its business to chart a nascent energy transition while sharing returns with them in the near-term.

“It’s a big pivot for our shareholders,” Mr. Looney said.

BP has unveiled the most aggressive plans yet by a major oil company to pivot toward cleaner energy. The British energy giant’s strategy—the biggest overhaul in its 111-year history—calls for a 40% reduction in oil-and-gas production over the coming decade, greater investment in low-carbon energy and a ramp-up in wind and solar power.

But the revamp has received a mixed reaction from BP’s investors despite growing interest in renewables. The company’s stock is up about 2% over the last six months, while the stocks of U.S. rivals Chevron Corp. and Exxon Mobil Corp are up around 10% and 3%, respectively. Chevron and Exxon have said they will not invest in renewable energy, but will continue to invest heavily in fossil fuels.

Mr. Looney said Tuesday that BP’s transition is the right thing to do for society, as governments around the world seek to mitigate the effects of climate change, but also presents a huge business opportunity. Customers are increasingly asking for greener sources of energy, he said.

“Customers all around the world… obviously are increasingly anxious about their carbon footprint,” Mr. Looney said. “People are willing to pay extra for a more environmentally-friendly product.”

BP was also among the first energy companies to pledge to reduce its net carbon emissions to zero by 2050. It will seek to achieve that by reducing emissions from operations, divesting oil and gas assets, and purchasing carbon offsets. Mr. Looney said that purchasing carbon offsets should be a last resort, but is a necessary tool to cut emissions while the world remains reliant on fossil fuels for years to come.

“These are all part of the tool kit the world needs to get to net zero,” Mr. Looney said. “We can’t simply switch off fossil fuels.”

Online home-goods seller Wayfair Inc. is making its biggest bet yet on physical retail, as it plans to open three new bricks-and-mortar locations in Massachusetts next year.

The retailer will open two stores under its AllModern brand and one location under its Joss & Main brand, the company said.

More retailers that got their start online are realizing the benefits of having physical stores, including Inc. and Allbirds. And after a yearslong industry shakeout, retailers this year will open more stores than they close for the first time since 2017, according to industry estimates.

The store announcement comes ahead of Wayfair Chief Executive Niraj Shah speaking at The Wall Street Journal’s CEO Council Summit.

Mr. Shah will join Intel Corp. CEO Patrick Gelsinger and Accenture PLC CEO Julie Sweet in a discussion about leaders managing through supply-chain disruptions and other pandemic-related business and workplace changes.

SEC Chairman Gary Gensler.The Wall Street Journal

Securities and Exchange Commission Chairman Gary Gensler said Tuesday his agency had had discussions with cryptocurrency trading and lending firms after he publicly urged the companies to register with the agency.

“We’ve had a lot of interesting meetings in the last handful of months,” Mr. Gensler said at the Wall Street Journal CEO Council Summit, when asked if any crypto platforms have heeded his calls this year to register with the agency.

The SEC chair, nominated by President Biden, has likened crypto markets to the Wild West, promising to bring them under the SEC’s investor-protection framework. He hopes to achieve this by focusing on the trading and lending platforms that many investors use to buy and sell cryptocurrencies like bitcoin.

“Work with the SEC,” Mr. Gensler said. “Get registered. They’re fundamentally exchanges.”

Crypto platforms have tried to avoid running afoul of the SEC by only offering cryptocurrencies that they believe to be outside the agency’s remit of regulating assets classified as securities. But Mr. Gensler has repeatedly said that for platforms that offer dozens or hundreds of what are known as tokens, some are likely to be unregistered securities. A challenge for the SEC, Mr. Gensler said Tuesday, is the global scope of crypto markets, with many projects located offshore.

“They find a lawyer that finds some ambiguity–maybe because they’re incorporated in the Bahamas or in Singapore or in the Seychelles or Malta or wherever they might be incorporated–and they might say, ‘Well we’re not going to offer this or that to the U.S. public’,” Mr. Gensler said. But he added that the Americans can still find their way to such platforms by using virtual private networks or similar technology.

“There’s all too many projects trying to sidestep international standards,” Mr. Gensler said. “Few technologies in history, since antiquity, can persist for long periods of time outside of public policy frameworks.”

WASHINGTON—Transportation Secretary Pete Buttigieg defended the Biden administration’s plans to invest billions of dollars in electric vehicle-charging networks, saying it would help speed a transition away from fossil fuels.

Mr. Buttigieg, speaking at The Wall Street Journal’s CEO Council on Tuesday, was responding to criticism of the plan by Tesla Inc. Chief Executive Elon Musk during a CEO Council session Monday.

Mr. Musk said Democrats’ $2 trillion reconciliation bill pending in the Senate should be scrapped, saying that federal investment in building out car-charging facilities was unnecessary.

“Do we need support for gas stations? We don’t,” Mr. Musk said. “Delete it.”

Asked for a response, Mr. Buttigieg said the charging networks are one of the measures needed to accelerate electric-vehicle adoption to meet targets for reducing tailpipe emissions. He said federal tax credits would also be necessary to make it possible for many consumers to afford the higher cost of EVs.

Rural and low-income city dwellers who use cars stand to benefit the most from a switch to electric vehicles, Mr. Buttigieg said, “but they can only capture those benefits if they can afford to buy in in the first place.”

He also defended a provision to provide larger tax credits for union-made electric cars. “Of course we believe in the benefits of union jobs,” he said. “These are things that don’t happen on their own.”

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Last Updated: Dec 7, 2021 at 3:45 pm ET

The Wall Street Journal is gathering prominent leaders in business and politics to discuss how CEOs can best navigate the current political and economic climate.