More than 3000 business leaders, policymakers and thought leaders gathered in Davos at the end of January this year for the 50th meeting of the World Economic Forum. At the top of the agenda: sustainability and stakeholder capitalism.
There was a general consensus among participants that global warming and climate change are concrete and urgent challenges, as shown also by the WEF annual global risk report released just before the opening of the forum, which listed the fallout to the environment in the top five positions for the first time ever.
Teenage climate activist Greta Thunberg took center stage within the WEF on two occasions, serving as bookends for the U.S. President Donald Trump, denouncing the world’s failure to act fast enough to stop the climate crisis. On the other end President Trump criticized climate activists as “prophets of doom” and championed his administration approach to the economy and expansion of U.S. energy supplies.
But despite Mr Trump’s optimism, also the United Nations Secretary General Antonio Guterres warned that “nature would recover; but we might not” and forward-thinking business leaders showed a renewed understanding of their responsibility for making changes. So did the financial sector, as Mark Carney, the departing governor of the Bank of England and the incoming UN Climate Change representative observed, highlighting that big banks are aware of the risks connected to global heating and are willing to take measures to address it.
Business in the Community’s chief executive Amanda Mackenzie said: "Businesses don't just need clear and workable plans for decarbonisation; they need to start putting them in motion as a matter of urgency. The gulf between words and actions remains huge… The challenge for companies in the 2020s is to implement the positive policies they have signed up to, and not just internally but through their entire supply chains."1
It will not be all plain sailing, as observed by Sarah Keohane Williamson, CEO of FCLT Global, a not-for-profit organization dedicated to encouraging long-term behaviours in business and investment decision-making: “Many innovations to address climate change – in areas such as renewable energy, transportation, infrastructure, food, and other natural resources – are ready for implementation. Investing in them, both by companies and directly by investors, requires a long-term focus and a significant amount of capital. However, the short-term nature of our capital markets and the uncertainty that surrounds the analysis of climate-related risks limit the scale of such investments.”2
The climate change debate ran in parallel of another initiative -- ‘stakeholders for a cohesive and sustainable world’.
“People are revolting against the economic ‘elites’ they believe have betrayed them, and our efforts to keep global warming limited to 1.5°C are falling dangerously short,” said Professor Klaus Schwab, Founder and Executive Chairman at the World Economic Forum. “With the world at such critical crossroads, this year we must develop a ‘Davos Manifesto 2020’ to reimagine the purpose and scorecards for companies and governments.”
Several sessions covered the breakdown in trust, discussed the failure of globalization to be more inclusive and underscored the need for companies to think not only about shareholders but also the interests of the stakeholders: their employees, the communities in which they operate and the environment.
Whether the business community should opt for what Nobel laureate Joseph Stiglitz called “progressive capitalism” or a stakeholder approach, the forum reflected this year the strong realization that there has to be another way. As Colin Mayer, professor of management at the University of Oxford, put it: “The purpose of business is not to produce profits. The purpose of business is to produce profitable solutions to the problems of people and planet”. 3
Technology and Artificial Intelligence also topped the WEF agenda this year. Technology took giants step over the last 50 years and we are now entering a new stage of innovation particularly with AI, 5G technology, blockchain and autonomous vehicles. “These technologies have the potential to benefit humankind in numerous ways, but only if they are used responsibly and ethically” wrote Greta Keenan, Programme Specialist, Science and Society, World Economic Forum.
“Take artificial intelligence for instance: the algorithms behind deep fake technology, capable of misleading entire populations and disrupting democracy, can also be used to diagnose diseases like cancer at an early stage, leading to better health outcomes,” she noted.
As Christian Klein, Co-CEO, SAP, wrote: “It is up to all of us to use technological advancements to tackle the world’s greatest challenges and turn them into our biggest opportunities”.
AI is an opportunity but also a risk is clear to Pope Francis, who summoned to Rome next month both the head of Microsoft and IBM to sign the “Call for Ethics”. The meeting will also be attended by the president of the European Parliament and the director general of Food and Agriculture Organization.
1 - https://www.edie.net/news/7/Davos-2020--Calls-to-climate-action-and-everything-else-you-may-have-missed/
2 - https://www.fcltglobal.org/news/blog/article/2020/01/28/davos-2020-wef)
3 - https://www.youtube.com/watch?v=_3uv4iP1c5U