(Originally posted on LinkedIn, January 31, 2023)
I recently had the good fortune to be part of the events at World Economic Forum (WEF)’s annual meeting in Davos, Switzerland. It was a most rewarding experience, hearing and learning from so many smart business people from different parts of the world. But exhausting, too! Your mind (and your feet) are racing morning, noon and night from place to place with so many great conversations going on.
For my part, I was honoured to be a speaker at three really fascinating panel discussions: first, at the ICEHouse, talking about Giving Nature a Seat at the Table; secondly the World Benchmarking Alliance hosted a forum on why do leaders lead; and finally a Wall St Journal panel that looked at whether human rights is now the most important topic for boards to consider around compliance and ESG.
Unfortunately, not everyone can squeeze into a small Swiss town, especially one that picturesque, nor has the time to attend all the sessions online. After reviewing my notes from the panels and reflecting on what I heard and learned all week, here are eight key takeaways:
- WEF’s theme for this year’s meeting was “Cooperation in a Fragmented World”. Although everyone arrived daunted by the many challenges that we all face – ‘polycrisis’ was the word du jour – a spirit of optimism and collaboration grew as the days passed. We were not just rearranging the deckchairs on the Titanic, but focused on moving the world to a better place. There were meaningful dialogues, and a true spirit and recognition of the need for collaboration.
- WEF’s Global Risks Report 2023 put climate change front and centre of the top risks for the next 10 years.
- Failure to mitigate climate change
- Failure of climate-change adaptation
- Natural disasters and extreme weather events
- Biodiversity loss and ecosystem collapse
- Large scale involuntary migration
- Natural resource crises
- Erosion of social cohesion and social polarization
- Widespread cybercrime and widespread cyber insecurity
- Geoeconomic confrontation
- Large-scale environmental damage incidents
At first glance, business seems to be the obvious absentee risk factor. However, these are in fact all business risks, and we should treat them as such.
- At WEF’s meeting seven months ago, former US Vice President Al Gore had warned that the efforts of climate change activists and companies would be hindered by the government. Since then, there has been a significant change, culminating in a celebration of “nature positive” and the Kunming-Montreal Global Biodiversity Framework signed at COP15. There was tangible, broad optimism at Davos because of that agreement, but also recognition of the many challenges in sustainability and biodiversity that still lie ahead.
- We’re taking colossal risks now with the future of civilization on earth by degrading life-support systems that we all depend on, gradually pushing the entire system to a point of destabilization. This is now more than just a climate crisis: mass extinctions, air pollution, and a risk to humanity’s future mean this is now a planetary crisis.
- Edelman always makes a splash (or should that be a snowball) by releasing its annual trust report at Davos. This year was no exception, with the 2023 Edelman Trust Barometer, showing that only 40% of respondents now believe they and their families would be better off in five years. This 10-point decline from 2022 is a clear sign of economic anxiety. On top of that, the report showed how a growing sense of distrust is fuelling polarization (as per WEF, above). Very few would help (30%), live near (20%) or work with (20%) someone whose views they disagreed with. Finally, more than half of respondents (53%) said that businesses are not doing enough on climate change.
- Momentum continues to build in the European Union to include ecocide, the mass damage and destruction of ecosystems and the environment, as a prosecutable, international crime against peace. Two more committees have backed proposals to enshrine this in law.
- The discussion we had at Wall Street Journal House revealed to me that human rights issues in company supply chains are still a grey area for most companies. They are unaware of the existence of modern slavery in their supply chains, and the huge risks that this causes for their reputation and ability to attract and retain talent. There is a clear need, beyond the headlines, to go out and educate suppliers, as well as procurement teams. The open leadership of companies such as Rio Tinto, which publicly acknowledged and addressed issues like sexual harassment in the mining industry, serves as an example of how transparency and openness can lead to positive outcomes.
- Everything is interrelated. The war on Ukraine is impacting the climate, biodiversity, and the social and human rights of millions of people leading to modern slavery and climate refugees.
Above all, I got so much positive energy from the people I met. Hearing “Wow, we need what you’re doing, you are doing such great work,” from so many people that I respect was both immensely gratifying and humbling. Because to leave a decent legacy for future generations, we need board directors and business leaders to be properly educated now on all of these ESG aspects.
It’s a good start, but myself and my team will have a lot more work to do this year!Back To News & Views