10 takeaways from Davos 2016

So what to make of Davos this year? Lots of short-term worries (stock market volatility, oil prices, terrorism, migration, Brexit, US elections) jockeyed with the big theme (the Fourth Industrial Revolution).

The result? An underlying sense of fear and uncertainty. After a very positive 2015 for the sustainable business movement. With the United Nations’ Sustainable Development Goals and COP21 successfully signed off you sensed a business community that’s climbed onto the highest diving board but is now hesitant to leap, fearful of what lies below. But you also sense that if it hangs around on the edge of the board, business is going to get a fearful shove in the back, from frustrated citizens, fearful investors, edgy governments and dynamic entrepreneurs with a better (for citizen and planet alike) way of doing business. So what to look out for:

1. The Sustainable Development Goals (SDGs) are starting to play their part in joining up the many different strands of sustainability (equality, education, water resources, health, hunger) – forcing policy-makers and business leaders to recognize “it’s all connected”. As noted below, few institutions have the skills and tools to join the dots effectively.

2. There was a moment in Davos to reflect on the important role that business played in encouraging a strong outcome at COP21, but after that it was into tough discussions about what next – perhaps best summed up by Christina Figueres: “We have re-set the GPS for global growth; now we need the tools to get there and we have literally three seconds (in the context of human time) to develop them.”

3. The very strength of COP21, its bottom-up approach based on each country’s own national plan, means multinational companies will have to navigate through a fragmented global climate marketplace with many different approaches. Nowhere was this more obvious than with a price on carbon. Everyone seems to want one, but as to which level and in what format there was much less consensus. A starting price of 20-40 euros climbing by 2% per year seemed to have most support, and there was much anticipation of the impetus that China’s planned new carbon market in 2017 will provide.

4. But in a very “here and now” world, there was a recognition that sudden extreme weather events would continue to be the shocks needed to counter global complacency, with Miami in the United States singled out as particularly vulnerable.

5. Water seemed to move up the agenda: recognized as a key cause of today’s migration crisis and a definite “risk multiplier” in the volatile Middle East.

6. Forests on a relative scale continue to be viewed as a success, both in terms of the nascent evidence that the worst excesses have been stopped in a number of key countries as well as the potential for yet more future gains in reducing carbon emissions at relatively low cost. Two themes for further progress stood out: the potential for a more jurisdictional approach that rewards countries (or regions) with greater aid and trade if they provide evidence of strong action on forests. Secondly, the key role of smallholders and the need to support and reward them for good forest practice, and the link this can provide to social development.

7. The launch of the Forum’s New Plastics Economy Report, in collaboration with Ellen MacArthur Foundation and McKinsey, was an important step in translating the circular economy from being a tantalising theory into a genuine route map to a better future. Strong insight on the problem and outline of the solutions shows the Forum’s potential to create a better global economy. Innovation in the world of sensors and intelligent assets will be the bedrock for change along with simplification of the materials we use. Finally a new and healthy debate was started on what a circular economy might mean for a company’s balance sheet with potentially many more assets held long term rather than sold and forgotten.

8. The Forum launched its much vaunted Fourth Industrial Revolution. While many argued we are still deep in the Third (digital) Revolution, its clear we are seeing a rapid, powerful convergence of a number of big technology changes (autonomous vehicles, sensors, biotechnology, 3D printing, robotics, artificial intelligence). There was some recognition that this had massive implications for society, jobs, inequality, privacy and corporate control but there was a little too much of a shrug of the shoulders and the view that whenever change occurs there are “winners and losers”. Intriguingly it took US Vice President Joe Biden to spell out powerfully the risk of the “elite” capturing all the benefits of change with the middle class further hollowed out through loss of jobs and job security.

9. How much of this change will play through is always moot, but if only some of it happens it’s clear we are going to need a new form of governmental and business leadership for the future. One that is tech-savvy, can see how the world’s many moving parts are connected into a giant physical and biological ecosystem, and above all has the humanity and humility to try and ensure the maximum number of people prosper in the future.

10. That’s why Davos’s great Achilles’ heel remains its aged, white, male, Anglo-Saxon membership (I know I’m hoist on that petard). Until that changes, it will starve itself of the broad talent, skills and knowledge that’s needed to lead a complex world. So challenge Davos for the morality of its monochrome invitation list, but also more pragmatically for how this will limit economic growth and prosperity in the future too.

So if 2015 was an emotional year of commitment, 2016 is shaping up nicely to be a more granular year of delivery. Never has it been more important for business to provide leadership in an uncertain world, to join partnerships that deliver scale and to innovate with new technologies that are good for the all not just the few. Basically: get things done!

Author: Mike Barry is Director of Sustainable Business (Plan A) at Marks and Spencer