A Little Less Conversation, A Little More Action Please; Let’s Talk Davos
The abnormally high temperatures and lack of icy-street-inflicted-injuries in Davos at the World Economic Forum this year was testament to its top issue: climate change. More specifically, this global crisis has sparked the choice of theme for this year’s WEF, “Stakeholders for a Cohesive and Sustainable World”. These words are music to our ears at Flat World Partners, and this year we were particularly pleased to see several firms pledging to turn positive talk into positive action:
- The Forum was abuzz with BlackRock’s letter to CEOs. In Larry Fink’s letter, published Jan. 14, the New York-based investment firm explained how it would avoid investments in companies that have a high sustainability-related risk.
- Goldman Sachs Group , Wall Street’s biggest underwriter of IPOs in the U.S., will no longer take a company public in the U.S. or Europe if it lacks a director who is either female or diverse, CEO David Solomon said.
- The SDG500, backed by a coalition of public and private organizations, NGOs, and a private equity firm, is a blended finance initiative set to invest $500 million in businesses working to achieve the SDGs.
- J.P. Morgan announced the creation of the J.P. Morgan Development Finance Institution to expand its development-oriented financing activities in emerging markets.
- The Cherie Blair Foundation for Women announced its 100,000 Women Campaign, which over the next three years aims to raise £10 million ($13 million) for women entrepreneurs.
- The Rockefeller Foundation and the Mastercard Center announced data.org, a partnership platform that seeks to build the field of data science for social impact.
On this theme, Flat World Partner’s own CIO, Kate Starr, also spoke to the re-emergence of stakeholder capitalism in the Harvard Business Review last week. This popular management theory of the mid-1900’s is making a comeback as “increasingly, there’s a sense among business leaders that the prevailing ideology of putting shareholders above everyone else — which has reigned for the past 40 years — needs a serious update.”
Nevertheless, young activists in Davos and abroad marched and proclaimed that our global leaders have long sacrificed sustainable development for perpetual economic growth. While this may be true of some, we also believe that older generations — the Titans of Industry, some might say — are well placed in many cases to facilitate a just transition to more sustainable world. What we need is less reaction, more action, and more collaboration. And, perhaps, a little more peace, love, and rock ‘n roll…
Hayley Mole & Derek Brooks, Investment team
For the first time, climate change or climate-related issues occupied the top five spots as the most likely global risks — in the annual Survey of WEF participants. Weapons of mass destruction were the only non-environment related risk to be on the list of threats likely to have the biggest impact.
The WEF has begun a number of initiatives (as they rightly should) to make the WEF Annual Meeting of 2020 a more sustainable gathering. The event has been carbon-neutral, through offsets, since 2017, and the 2020 Meeting reduced non-recyclable waste output by 25% compared to 2019 through the use of modular backdrops and repurposing old materials. Official transport down the traffic-lined streets of Davos was also 88% electric or hybrid cars, and, by restricting us Hotel Badge holders from official shuttle usage, our personal carbon footprint improved as we were forced to walk all over town (not bitter, clearly).
During the week of the Forum, Davos’ shops, cafes, libraries, and even churches are transformed into corporate headquarters and event venues, disrupting the life in the small swiss city. To engage the community, the WEF hosts the Open Forum in the Swiss Alpine School. This year, cellist Yo-Yo Ma, a member of the World Economic Forum’s Board of Trustees, performed Bach’s Suite for Solo Cello №1 to an overpacked mostly-local audience. He said he joined the Forum in order to remind global economic and political leaders of the unifying importance of culture to seek truth, build trust and act in service of one another.
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