2020 World Economic Forum: 6 takeaways from Davos

PHOTO: REUTERS

From climate change to stakeholder capitalism, a host of topics were discussed at the hundreds of talks and panel discussions at this year's World Economic Forum (WEF) in Davos. Here are my six takeaways from the event -

1. Climate crisis

The relatively warm weather and lack of snow for some weeks in Davos, an Alpine ski resort known for its frigid weather, provided a backdrop for the many discussions on global warming here.

Swedish activist Greta Thunberg struck a chord with many when she demanded that business leaders move faster to address the challenge, urging them to act like they "cared for their children above all else".

This was despite United States President Donald Trump having earlier dismissed the "prophets of doom", who sought to control how people lived and worked. He argued instead that technologies not yet discovered would provide solutions to the challenge.

There were also many references to the Larry Fink letters. In the 2020 edition of his annual missive to chief executives, Mr Fink, founder and CEO of BlackRock, declared that his asset management firm would make a fundamental shift and put environmental sustainability as the core issue guiding its investment decisions.

Sustainability has emerged as a major issue on the minds of business leaders in the past couple of years, Mr Oliver Tonby, chairman of McKinsey Asia, told The Straits Times.

"They read the news reports, they see the trends...they are citizens too," he said.

"It's also an issue that is increasingly important to our employees, and also to investors. So, the CEOs want to make a difference, they are in the game to do so."

Asian companies, he noted, seem to be a couple of years behind on this trend, although the gap has been closing.

 

2. Stakeholder capitalism: In this together

For the past 50 years, World Economic Forum founder and executive chairman Klaus Schwab has been championing the idea that business should not be just about profits.

Rather, it should play wider social roles as well, such as safeguarding the interests of its workers, contributing to the community, and protecting the environment.

He set up the WEF to push this belief and over the years it has been "committed to improving the state of the world".

In recent years, the rise of populist movements, fuelled by growing income inequalities, as well as mounting concerns about climate change, has made addressing the underlying social issues all the more important.

Prof Schwab's idea of stakeholder capitalism thus seemed ahead of its time, but it is very well suited to the needs of the world today.

So, as the WEF marked its 50th anniversary last week, he was lauded by many speakers from Mr Trump to German Chancellor Angela Merkel and even Pope Francis, for his efforts over the years.

3. Greening up the earth with a trillion trees

Several new initiatives were also launched in Davos this year. One of them was a WEF platform to bring together various groups which are working on efforts to plant or restore a trillion trees around the world.

Dubbed 1t.org, the new platform aims to mobilise a global effort for this nature-based solution to climate change. The trees, to be planted over the next decade, would help reduce about a third of the emissions that need to be cut by 2030 to meet the Paris Agreement targets that had been set to tackle global warming.

 
 

Several such efforts already exist, but the WEF initiative aims to bring these together, drawing on various community groups which were working on reforestation efforts, and scaling them up.

There was much discussion about how to achieve the ambition tree planting target, the cost of doing so, and whether chasing this headline grabbing number would divert attention and resources from other efforts, and even lead to unexpected ecological impacts if the wrong trees were planted, or the initiative was poorly implemented.

4 Asia for Asia is happening now

The 21st Century has often been hailed as the Asian Century. But Asia's time is now, not some future down the road, declared McKinsey in its Future of Asia report, which it released in Davos last week.

Among the highlights of the report:

- Asia accounts for over US$1 (S$1.35) of every US$2 in new investment in the past decade, with US$1 of every US$3 invested in China.

The upshot of this: Asian companies have increased their share of the G5000 - the world's 5,000 largest firms - by six percentage points to 43 per cent today, more than any other region in the world.

Singapore has 40 companies within this G5000, with the tech sector generating the highest value, creating US$2 billion in profits between 2015 and 2017.

5. Dutch PM: Media crucial for democracy

Dutch Prime Minister Mark Rutte made an impassioned plea to business leaders in Davos to support the media financially, so that they could provide the reliable information that was crucial for voters to be well informed when they exercised their democratic rights.

He pointed to deep fake video clips of former United States President Barack Obama mouthing words that did not reflect his views.

"Imagine if such a clip appeared on television a few days before the election. It could have a huge impact," he said.

 

So, he argued, society needs journalists and media organisations to "explain to the people what is going on".

"But this costs money," he said, noting how much of digital advertising revenues are being soaked up by Facebook and Google at the expense of mainstream media organisations.

"So one of the pleas I have for big business here in Davos is, don't put all your money into the advertising on the Internet."

Instead, use it to back good newspapers, media organisations and television stations, he said.

"Make sure they are able to pay sensible and realistic salaries to the journalists, so that they are able to do this.

" I believe this is crucial," he said, drawing applause, not least from the many working journalists in the hall.

 

6. Bringing joy to the world

This year marks the 250th anniversary of the birth of Ludwig van Beethoven. So it was fitting that the German composer made a special appearance at this year's WEF, when his ninth symphony was performed by the European Youth Orchestra under the baton of American conductor Marin Alsop, who is music director of the Baltimore Symphony.

Ms Alsop also spoke at several sessions during the week on the impact classical music, such as that by Beethoven, can have in giving meaning to people's lives around the world.

She also disclosed her plans to lead an Ode to Joy project, which will see her conduct nine orchestras around the world, each playing Beethoven's ninth symphony, with its famous closing chorus which celebrates universal brotherhood, sung in a variety of local languages.

These concerts will be held in Baltimore, Sao Paulo, London, Sydney, Vienna, Durban, Johannesburg, New York and also in New Zealand.