As the World Economic Forum drew to a close last week in Davos, Switzerland, three sobering messages for sustainable business emerged from the 2,500 participants in the invitation-only event. As I followed media coverage closely, my takeaways were the following:
In this recent PwC survey of chief executives, global warming didn’t even make the list of key concerns or priorities. The 1,233 CEOs interviewed in 17 countries in preparation for the World Economic Forum, instead emphasized public sector regulation and taxation as main barriers that could hamper their business. Concern about climate change and its consequences for the global economy were so low in the previous year that the consulting firm did not even ask specifically about the topic this year.
Message 2: In view of new geopolitical risks, the gateway effect of climate change loses recognition
Although water crisis and failure of climate change adaptation were perceived among the most impactful risks the global economy might face in 2015, according to the 10th edition of the Global Risks Report, little has been done to tackle the problem. Again, this might have to do with priorities. In below graph you can see the evolution of two perceived global risks – geopolitical and environmental – since last year: The falling stars of green issues cannot compete with the geopolitical comets.
This perception persists despite the fact that climate change and other sustainable development outcomes are inextricably linked, and that scientists have proven the link between extreme weather events like severe droughts and floods and political destabilization and armed conflictAs Christina Figueres, leader of the climate change negotiations, points out in her blog on Davos, “the fact is that unless we are able to address climate change in a timely manner, all development gains will be under constant economic and social threat.”
Messages 3: Corporate leadership is desperately needed because current actions send the wrong message
At the Forum, an estimated 1,700 private jets carried participants into the Swiss Alps. For those who didn’t charter their own jet, the “Towards a Greener Davos Initiative” was limited to running a shuttle bus for participants from Zurich airport to the event venue. No talk about business leaders going back to their communities and shifting towards a green economy, making investments beyond energy efficiency, incorporating entire value chains in sustainable production practices down to the last small scale producer. Leadership is clearly needed. The US Senate, for example, this weekend passed, by a small majority, a resolution stating that “climate change is real and human activity contributes to climate change”. That signals that the private sector is much better positioned to take a lead in tackling climate change. Yet the actions emerging from Davos are quite lackluster.
While some might get frustrated, we must remember that we all need to act. Christiana Figueres, who leads the global climate change negotiations, made it clear in Davos that the role of business is fundamental in tackling climate change. She boiled it down to three forms of engagement: vision, action and voice. I believe it is the role of organizations like IDB to spread the message of the small number of global frontrunners who are being vocal about green issues and have started to take action. “There’s a huge number of companies – the silent majority – that are not participating in this discussion and are not engaging with governments with respect to the very clear guidance and regulatory certainty that they need,” Figueres said. Let’s help catalyze them into action and let’s make Latin America and the Caribbean the region to champion many of these initiatives!