During the Abu Dhabi Sustainability Week, the COP28 team presented itself and laid out its ambitions for and commitments to the COP28 success. The choice of Dr Sultan al Jaber as COP28 President, whilst questioned by some, will for the first time put a committed CEO at the helm of the climate meeting. My read from the engagements with the COP28 team is that this will offer business a unique opportunity to engage in efforts focused on real-economy action at large scale. Having the COP come to the Middle East provides world leaders with a unique opportunity to tackle solutions that work for all, whether in the Global North or Global South.
The theme at WEF’s Annual Meeting in Davos was: “Collaboration in a fragmented world”. This meeting in the mountain village was restored in old form and once again was a unique convening place for business leaders from around the world.
I had expected a negative sentiment around the global economic outlook but was surprised by the slight sense of optimism that seemed to prevail in most meetings. Key topics dominating the sessions were: resilience, climate as the next driver for transformation and innovation, and the (very fast) rise of AI and new technologies.
As per the tradition, the SDG Tent was the location where many of the sustainability topics were discussed over the week. Key focus areas were Climate, Nature (after the success of the Biodiversity COP in Montreal at the end of last year), Food System Transformation, and Inequality.
As usual several key publications were launched during the week in Davos. Let me summarize some of the key findings for you, as they may be informative to shape your thinking in 2023:
- WEF Global Risk report (1,200 experts):
- For the first time, the report split the global risks between short- (2 year) and long- (10 year) term;
- In 2023, the Pandemic risk has been replaced by the Cost-of-living crisis as the top short-term risk. COVID has dropped out the top 10 of short-term risks;
- In the short term, 3 of the 5 top risks are sustainability related (extreme weather, failure to mitigate climate change and erosion of social cohesion),
- In the long-term risks, 8 of the 10 risks are sustainability related (climate, biodiversity and inequality).
- PWC Global CEO survey (4,410 CEOs):
- 73% of CEOs believe global economic growth will decline over the next 12 months;
- 40% of CEOs don’t believe their organizations will be economically viable in 10 years if they do not transform;
- 58% of CEOs are developing strategies for reducing emissions and mitigating climate risks.
- Edelman Trust Barometer (32,000 respondents in 28 countries):
- Economic optimism is collapsing with 40% of people thinking their family will not be better off five years from now;
- Business is the only global institution that is trusted globally (62%) - the main explanation is that business is the only actor that talks in solutions. The other element is “my company” and “my CEO” are trusted more than business (and CEOs) in general;
- There is a higher expectation towards CEOs for being the leading voice. Business is expected to have more social involvement in climate change, inequality and workforce re-skilling;
- One quarter of countries are now severely polarized - inequality is one of the drivers. Income-based inequality is creating two trust realities.
- Oxfam: Survival of the Richest:
- Since 2020, the richest 1% have captured almost two-thirds of all new wealth – nearly twice as much money as the bottom 99% of the world’s population;
- 95 food and energy companies have made $306 billions of bumper profits of which 84% is passed on to shareholders - while 800 million people are going to bed hungry…
Food for thought and action for sure. Allow me to draw a number of conclusions from both the publications and my many meetings in Abu Dhabi and Davos:
- The economic outlook - but more importantly people’s perception of their economic future - remains highly uncertain;
- Climate risks and the need for climate action are high on the agenda. The conversation has now firmly moved beyond the targets that companies set to the transformation of their operations and supply chains. Scope 3 accounting is an urgent action area for business leaders and carbon accountability will become an important theme in COP28;
- The momentum for nature positive action has gained strength after the successful COP15 in Montreal in December of last year;
- Inequality is now widely recognized as a topic of high urgency. The response to it is however still very fragmented. The Business Commission to Tackle Inequality (BCTI) report that WBCSD will publish in Q2 will provide important insights in a holistic business action response;
- An emerging view is that the solutions need to connect and cover the three big global challenges (Climate, Nature and Inequality) in a systemic and transformative way.
In 2023, WBCSD will be plotting significant efforts on many of these areas. Next to the already mentioned BCTI launch, a major effort to have global business play a central role into COP28 is underway, nature positive roadmaps for key sectors are in development, and we will make sure that, through the CFO Network, we are a leading shaper of the Corporate Accountability System.
Despite the uncertainties in the global economy, sustainability is now mainstream.
As the leading global platform for business action, we at WBCSD look very much forward to supporting you and your company in the year ahead.