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Davos fails to address climate crisis or economic inequality [1]
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Date: 2023-03
The 2023 World Economic Forum (WEF) meeting in Davos started five days ago amid an air of pessimism.
Months beforehand, 73% of business leaders surveyed by PricewaterhouseCoopers had predicted a decline in global growth in the coming year, with inflation, volatility and geopolitical conflict topping the risk list. It is hardly a surprising figure given 2022 ended with global stocks having fallen by nearly 20%, with market losses of $30trn, the worst since 2008.
Despite that grim economic forecast, the first three days in Davos were taken up with discussions on EU/US trade issues and then Ukraine, with German chancellor Olaf Scholz and President Zelenskyy the leading speakers.
But day three of the summit also saw a speech from UN secretary-general António Guterres, which emphasised the urgent need for radical decarbonisation, as well as the amplification of systemic global inequalities by a “morally bankrupt financial system”.
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The founder of the Forum, Klaus Schwab, has long wanted it to examine broad global problems, but all too often smaller, specific issues dominate discussion, with matters like Guterres’s concerns over socio-economic divisions and climate breakdown sidelined. The major corporations and opinion formers at Davos are focused on short-term results and shareholder requirements for strong returns, not longer-term challenges.
Schwab himself may be critical of traditional shareholder capitalism and keen on what is termed ‘stakeholder responsibility’ or ‘stakeholder capitalism’, which aims to replace the primacy of profitability and shareholder reward with a wider concern over issues such as climate change and economic marginalisation. It may itself be a questionable concept – but in any case there is little evidence of such a transformation being in prospect for the Davos elite.
Two glaring examples of lack of change came to light just as the WEF got under way. The first related to one of the few achievements of the COP26 climate summit, the Glasgow Financial Alliance for Net Zero (GFANZ), a grouping of 450 organisations in 45 countries with assets exceeding $130trn. Its collective aim was for members to align their investments to help limit the global temperature rise to 1.5°C.
However, indications in the past year reveal little change in behaviour. According to Reclaim Finance, among the banks aligned to GFANZ, 56 of the world’s biggest have invested $270bn in fossil fuel corporations for expansion, while the 58 largest members of the asset management grouping within GFANZ retain $847bn in assets in fossil fuel companies.
Perhaps it is taking time, but time is something we do not have.
The second example of business as usual was the confirmation of a long-held suspicion that fossil fuel companies have known for decades from their own researchers that climate change is directly linked to fossil fuel combustion.
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[1] Url:
https://www.opendemocracy.net/en/world-economic-forum-davos-climate-crisis-economic-inequality/
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