An in-depth look at the 2023 Fortune Global 500

Fortune

This year’s list tells a story of inflation and global tensions.

Transcript

00:00 (upbeat music)

00:02 - The Global 500 ranks the largest companies

00:04 in the world by revenue.

00:06 The smallest company on this year's list

00:08 has about $31 billion in revenue.

00:11 In contrast, the smallest company in the US 500

00:14 this year has about $7 billion in revenue.

00:16 (upbeat music)

00:19 - While the world's getting more fragmented in ways,

00:23 the risks are getting more connected and correlated.

00:26 So I think the challenge is resiliency.

00:29 Mortgage rates rose more than 3%.

00:31 Home prices rose by 8%.

00:33 That impacts affordability for home ownership.

00:36 - The economics of every geography are slightly different,

00:39 but there is definitely commonality

00:41 around inflation and general uncertainty.

00:43 (upbeat music)

00:45 - 2022 really stood out for expectations

00:53 that we were going to have a recession.

00:56 There was also an increase in focus on US-China tensions,

01:01 a lot of talk about decoupling,

01:03 and a big transformation to the global commodity markets

01:08 with a real redirection of commodity exports

01:11 as Russia directed more of its exports east and south.

01:16 And you saw that Europe did a pivot to the west

01:19 and away from Russia.

01:21 - Inflation was starting to rise

01:23 before Russia invaded Ukraine,

01:25 but that invasion affected the world's oil and food supplies

01:29 and drove prices up for that.

01:30 The conventional wisdom is that inflation

01:33 hurts corporate profits.

01:34 The profits of the Global 500

01:36 were down slightly from last year,

01:39 but collectively they still earned

01:40 almost $3 trillion in profits,

01:43 which is the second highest total ever.

01:45 Number one is Walmart.

01:48 It is their 10th consecutive year at number one.

01:51 Number two is Saudi Aramco,

01:53 the Saudi Arabian national crude oil producer.

01:56 Number three is State Grid,

01:57 which is China's big national electric utility.

02:01 Number four is Amazon.

02:03 And number five is China National Petroleum.

02:06 The story that the US 500 tells

02:10 has recently been very much a story

02:11 about the huge domination of big tech.

02:14 All of these companies building tech expertise

02:17 into huge businesses.

02:18 And of course, that's an important global story.

02:20 But the Global 500 reminds you

02:22 that the rise of big tech is just one story.

02:25 All those companies are still there,

02:27 but you also look down the list

02:29 and you're seeing huge European and Chinese oil companies,

02:33 big global auto manufacturers like Volkswagen and Toyota.

02:37 And it reminds you how much of the global workforce

02:41 and how much global capital is still tied up

02:43 and laboring in these dominant industries

02:46 of the 20th century.

02:47 All of these companies are trying to transition

02:49 into a 21st century economy

02:51 that might be greener and higher tech,

02:53 but they're not there yet.

02:55 And this list kind of proves that.

02:57 - We need a holistic policy

02:59 that takes into consideration energy reliability,

03:03 affordability, and energy security.

03:07 Oil and gas will continue to be part

03:09 of the energy mix for decades.

03:11 - Oil prices surged in 2022.

03:14 And as a result, Saudi Aramco's revenue

03:16 was up about 50% over 2021.

03:20 So they were just within about $8 billion

03:22 of catching Walmart, which in terms of companies this big,

03:24 that's like a rounding error.

03:26 Came really, really close.

03:27 They also had the most profitable year

03:29 that any Global 500 company has ever had.

03:32 They earned $159 billion, with a B, in profits.

03:37 There are more companies from greater China

03:41 than there are from the US,

03:42 but the US companies on the Global 500

03:44 collectively brought in quite a bit more revenue

03:46 than the ones from greater China.

03:49 (upbeat music)

03:51 - We are a long way, a long, long way

04:00 from being anywhere close to the kind of representation

04:03 in leadership, whether that's of companies

04:06 or governments or institutions,

04:09 that better represents the societies that we serve.

04:11 - At Fannie Mae today, close to 60% of our employee base

04:16 are people of color.

04:17 As a Latina myself, I'm passionate about diversity,

04:21 inclusion, equal opportunity.

04:24 First of all, it's good for business.

04:26 It responds to changes we're seeing in demographics

04:30 and it honors our mission.

04:31 - I think that in 2023, the market is still waiting

04:39 to see this recession because of the magnitude

04:42 of rate hikes that we've seen across central banks

04:45 and what kind of slowdown will it be?

04:47 Is a soft landing possible?

04:49 Is it gonna be a mild recession?

04:51 Or is there a risk that the longer this is delayed,

04:54 that you could have a synchronized global downturn?

04:57 We have yet to see a resolution of Russia's war on Ukraine.

05:01 We've seen permanent shifts into the commodity markets,

05:04 but we'll continue to see that trade patterns,

05:07 investment flows, supply chain resilience,

05:10 reducing dependencies remain very much in the narrative.

05:15 And I think you will see that the global South,

05:17 the emerging markets countries are going to play

05:19 a bigger role, Brazil, Mexico, Indonesia.

05:23 - Indonesia economic growth in 2023 is predicted to grow

05:29 in the 4.5 up to 5.3%.

05:32 We believe Pertamina will grow due to the potential increase

05:35 of domestic economy ahead.

05:37 - And I think when it comes to Russia,

05:42 when it comes to the pandemic,

05:43 to climate change and to those challenges

05:46 that are part of the agenda for us leaders

05:50 of our generation,

05:52 I think we were not trained for any of those.

05:55 - These past few years of pandemic, geopolitical crisis,

05:58 supply chain disruption, climate change

06:01 and inflationary pressures mark the dawn of a new era,

06:05 which I call multipolar.

06:06 This new multipolar world requires companies

06:09 to become better, to become ever more agile

06:12 and to constantly transform and adapt.

06:14 - I don't know what the future is going to look like,

06:16 but what we've learned as Walmart

06:18 through the last few years in particular,

06:21 is staying agile, staying nimble, having data,

06:25 really thinking about how we use that is critical.

06:28 - You need to adapt much faster.

06:30 You no longer have time to learn everything.

06:34 You need to learn as much as you can and then act.

06:37 (upbeat music)

06:39 (upbeat music)

06:42 (upbeat music)

06:44 (upbeat music)

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