May 27, 2022 - ESG and Climate News
A Very Different Davos
Has Davos lost its mojo? With lower attendance this year, it was great to be able to stroll around without struggling through crowds of Nobel Prize winners, CEOs and billionaires in snow gear, but it also felt like a turning point.
What sets the World Economic Forum annual meeting apart from other events, is the notion that the world’s rich and powerful come together in a peaceful, somewhat relaxed, setting. It provides a warm fuzzy feeling that maybe the world isn’t coming apart after all.
But, founder Klaus Schwab’s vision of global connection and cooperation may be at risk. It’s undeniable that there was a weird vibe at this year’s forum. War, inflation and the pandemic have created a palpable sense of unease in the spring air. One of the popular selfie spots on the promenade was “Russia House” – this year not occupied by actual Russians, but made into an icon protesting their war crimes. Having attended the last Davos event in January 2020 (when a certain virus was just cocktail chat), the juxtaposition with this year’s meeting highlighted the massive changes of the past two years.
Despite flagging attendance, the special sauce of Davos persists. No other meeting brings together a critical mass of decision-makers in a ‘school camping trip’ setting that puts everyone at ease and gives time for informal connections as well as a world stage for more scripted announcements.
Even with war and recession topping the agenda, I would guess that more than half the events had a sustainability focus. Al Gore nearly lost his voice shouting “who cares if we screw up the future?” John Kerry heralded the “First Movers Coalition” where tech giants Microsoft and Alphabet collectively pledged to invest $400 million in carbon removal programs, Boston Consulting Group targeted the removal of 100,000 tonnes of carbon by 2030, and Salesforce committed $100M to scale carbon removal tech.
Reflecting on these announcements, I had a sense of déjà vu. It was just six months ago at the COP 26 meeting in Glasgow, where countries, companies and financial institutions all pledged to cut carbon. As John Kerry said to one packed Davos event, “if the commitments made in Glasgow were on track, keeping global temperature rise below 1.5C would be in reach.”
But that’s not what’s happening. Lofty goals are announced with little follow up and no accountability. UN Secretary-General Antonio Guterres called the cascade of missed milestones "a dismal litany of humanity's failure to tackle climate disruption."
The hope that the ‘build back better’ plans on both sides of the Atlantic would stimulate the green transition has been superseded by the economic upheaval and geopolitical uncertainty brought on by the Russian war. Which makes it even more astonishing that companies continue to step up with voluntary climate commitments. The real issue here is the lack of transparent, comparable data on progress toward these goals.
It wasn’t all doom and gloom though and there was a note of optimism voiced on a Bain and Company panel I was speaking on. Executives from three top tech companies discussed how they are quickly ramping cutting edge technologies that can include supplying the data needed to not only provide confidence and transparency to the market, but more importantly, enable a credible pathway transition to Net Zero.
The Destabilizing Force of the Ukraine War
Russia’s invasion of Ukraine is affecting world food and energy supplies. US climate envoy, John Kerry, warned the WEF audience that the energy crisis wrought by Russia’s war could pave the path for more fossil fuel investment, accelerating the climate crisis. The WEF’s own website marks this as the “first truly global energy crisis” and calls for an accelerated transition to low-carbon energy sources to combat it, rather than further investment in coal and oil.
International Monetary Fund managing director Kristalina Georgieva addressed the Davos audience this week and warned about skyrocketing food prices, as UN experts warned that the world has only a ten-week supply left of wheat. Ukraine is one of the world’s largest exporters of wheat, barley, and sunflower oil, exporting over 50 million tons of produce annually. But now, the UN says that 20 million tons of grain are stuck in Ukraine as the country absorbs increasingly intense waves of attacks from Russia. Ukrainian president Volodymyr Zelenskyy, who spoke to the Davos audience through a video link, called for additional military aid and underscored that Russia has blocked food exports from leaving Ukrainian ports. This has contributed to global food prices rising 30% from last year and could lead to massive food security and famine problems around the world over the coming months.
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