Davos 2020 showed what a crucial shift in mindset can be achieved in one year.
Davos 2019 was the moment when senior executives started pondering whether net-zero was an achievable target for the global economy, and what that meant for their own businesses. This year demonstrated that net-zero is a broadly accepted target, and major asset managers and management consultants are talking about a world where decarbonisation is not just a ‘nice to have’. Discussions are now about how, and how soon, to achieve it.
We saw strengthening signals from investors and global corporates – BlackRock, Microsoft and Volkswagen among them – that they intend to shape the debate, whether or not governments are ready to act. Investors touted sustainability-linked products and portfolios. Nature-based solutions and the circular economy were in the minds of companies and consumers.
The systems change agenda was no longer a sideline, but spilled over into every conversation, and this will surely continue at the Annual Meeting for the decade to come. An increasingly impatient world will look for evidence of collective progress, and leaders will shape new partnerships to accelerate transition. Already, there felt like greater pressure on leading-light countries and corporates to show what’s possible – as one Davos 2020 participant put it, “for everyone to put their logos and egos away, and pitch in”.
But shifting capital and reimagining the economy for a low-carbon future means that investors, business and policymakers all need examples of what works – and what it takes to change the future collectively.
New Agenda on Food – Launching a Decade of Action – The Food and Land Use Coalition saw how far its 10 critical transitions are informing the conversations on global food systems and land use. When people tell you they’re basing their impact fund investment strategy on your report, key messages and analysis are clearly cutting through!
Inclusion and just transition were key themes, particularly how to make farmers and producers central to these changes – this will be a focus of a new Food Systems Economic Commission, in which SYSTEMIQ is a core partner.
Reimagining the automotive sector – The automotive industry needs some big answers on cutting its contribution to climate change: embracing circular economy models could reduce its CO2 emissions by 92%. In a true example of radical collaboration, SYSTEMIQ has partnered with the World Economic Forum and the World Business Council for Sustainable Development to launch the Circular Cars Initiative, bringing together not just manufacturers, but also recyclers, finance, mobility providers and academics. Because the first law of innovation is that progress always happens at the intersections.
Building momentum around reaching net-zero from last-frontier sectors – The Mission Possible Platform, a joint initiative by the Energy Transitions Commission and the World Economic Forum, was a central theme of the official energy programme. Around 25 CEOs and senior executives joined the ETC for a session focused on immediate action to reach net-zero emissions across sectors like steel, cement and shipping by mid-century, creating a “rare opportunity for exchanges between energy producers, energy users and finance players”.
Putting purpose in global value chains, exponentially – Convened by the Fourth Sector Group, SYSTEMIQ, the World Economic Forum and others, the new Buy For-Benefit Coalition calls on companies to use their trillions of dollars of procurement power to advance more sustainable economies by scaling for-benefit business models in global value chains. Members of the coalition can generate a formidable demand signal to create an enabling environment and advance policy reforms to drive this shift at a genuinely system-changing speed and scale.
Investing in resilience – Investors are becoming increasingly aware of the impacts of climate change on their portfolios and the need to integrate resilience into investment decisions. The recent fires in Australia, Indonesia, Siberia and the Amazon were on all our minds, and the best events found ways to address this directly. At a Blended Finance Taskforce roundtable with Willis Towers Watson, the Minderoo Foundation shared powerful evidence of the impact of the Australian bushfires on communities, wildlife and the economy. The roundtable discussed the need to push the financial system to change the way it measures risk – away from backward-looking models, to a proper risk-management framework that looks ahead to a world where a changing climate changes everything.
Solutions for zero plastic waste – The Global Plastic Action Partnership presented its first findings on reducing waste plastics in Indonesia, whose Minister for Maritime Affairs formally committed to five system changes, in pursuit of a 70% reduction in plastic waste by 2025 – a radical vision on circular economy principles, and one that would have been hard to imagine even a year ago.
Throughout 2019, we’ve seen global brands making commitments around the health of our ocean ecosystems – many such as Nestlé and HP through Project STOP, for example. At this year’s Annual Meeting, we provided an exclusive preview of the forthcoming “Breaking the Wave” Report, which shows how the world can radically reduce ocean plastic flows, while the “Sea the Future” initiative continues to push for a transition to a zero-plastic waste value chain.
Away from the noise – A series of ‘Fire Circle’ meetings with XR Catalysers and Mac Macartney explored the human and spiritual dimensions of the crisis we face. The Arctic Basecamp’s scientists and youth delegates took us out of the business bubble and into the reality of rapidly declining landscapes and livelihoods. And, at a private dinner, the words of conservationist and ethnologist Jane Goodall to “choose life” were a vital reminder of the power of individual action.
Bringing in marginalised voices – Around $6 trillion a year will need to be invested to deliver the SDGs, most of it in emerging markets. Summits like Davos need to embrace, not exclude, our partners in developing economies – ultimately, these countries are the most exposed to the impact of climate change. More importantly, they already have many solutions to offer the rest of the world. With this in mind, SYSTEMIQ’s Blended Finance Taskforce co-hosted a dinner with our Indonesian partners from the “Tri Hita Karana Forum for Sustainable Development”.
We discussed the importance of two ‘capitals’ – investment in natural capital and innovation for Indonesia’s new capital. Most importantly, we saw people make real commitments at the dinner: from ensuring gender equity in Davos, to developing a high-quality carbon market in Indonesia in the next 12 months, to building a smart, green capital city that will combine nature-based solutions with the most advanced technology over the coming decade.
Driving integrity – So if the case is finally made, why has $2 trillion been invested in fossil fuels since the Paris Agreement? What are leaders doing away from the Davos spotlight? It was great to see SYSTEMIQ’s sustainable finance team emphasising the need for integrity at a sustainable finance panel with BlackRock and the WWF. We will need to hold the newly enlightened climate champions to their word if we want to shift large-scale capital into a low-carbon economy.
This may have felt like a ‘one-item’ annual meeting – in which, for the first time, the short-term issues of trade or immediate risks to the world economy were dominated by medium-term concerns. But the shift we’ve seen needs to continue into Davos 2021, which must be much more action-oriented around catalytic change, showing how the right policies, investments and new coalitions can deliver better outcomes for people and nature. In the meantime, Europe will hope that the EU Green Deal can provide just such a focus for action, combining political leadership (at home and abroad), more social cohesion and a platform for innovation and the right investments.
As Tim Wu wrote for the New York Times: “It is just too easy to free ride at Davos: to talk the talk, adopt a few cute pet projects, and let that be it.” Too many meetings are still about what we ‘need to do’; rather, it needs to be about ‘how we are getting it done’ – and as quickly as possible.
