The View From Davos

From the World Economic Forum Annual Meeting, 2020

The View From Davos is a daily newsletter featuring insight from our Senior Advisors, Partners and Directors at The World Economic Forum Annual Meeting 2020.

Maria Figueroa Kupcu, Partner, New York

INCLUSION & DIVERSITY

At one of the most exclusive gatherings in the world, the conversation about inclusion and diversity has a new twist. Male participants still vastly outnumber females at the WEF Annual Meeting. But the discussion about I&D has moved on from questioning the business case for expanding the influence of groups such as women, LGBTI and, notably this year, people with disabilities. For leaders, learning to speak the “language of inclusion” is essential (though often still intimidating). But it isn’t enough. A new competitive edge is emerging for those businesses that back intention with policies to break-down barriers. For example, ensuring equal access to paid family leave for all employees - regardless of gender identity –promotes productivity, employee loyalty as well as new norms.

However, the dominant conversation in Davos has been about reshaping the global economy from one that is linear - “make, take, waste” – to one that is circular. This too is a question of diversity, equity and inclusion. A great deal of innovation is taking place within supply chains to close sustainability gaps. But there is growing recognition that bigger gains will come when companies collaborate across sectors. Can the plastic waste from consumer packaging become the raw material needed by the industrial sector? Expanding notions of inclusion and diversity will be a key element of creating sustainable, commercially viable and socially valuable change.

Meaghan Ramsey, Partner, London

SHAREHOLDER ACTIVISM

Stakeholder Capitalism, Responsible Capitalism, Capitalism 2.0, Inclusive Capitalism, Conscious Capitalism; wherever you go in Davos, this conversation is hot. But let’s be clear. This is not a rejection of capitalism per se, but a course correction. A recognition that in a world of increasing inequality, the current model is failing to deliver the improvements in quality of life that it was designed for. This is having far-reaching consequences for business and governments, including the rise of populism. A Stakeholder Capitalism approach directly challenges the notion of shareholder primacy and requires businesses to deliver value across all of their stakeholders, from shareholders to employees, customers and suppliers, civil society and policy makers

Palpable this year is a shift in focus towards action, and the number of people really grappling with how to put the concept of Stakeholder Capitalism into practice. For business leaders, this will require a true understanding of the ecosystem of their business’ impact, and taking an equally system-wide approach towards solving it. This is not about pushing negative impact up or down the value chain, or outsourcing it across borders. Leading businesses are leaning into systemic challenges from the core of their business strategy, acting at a scale commensurate with their size and crucially, catalysing change among others including policy makers. Unlocking genuine progress on shared challenges invariably requires forging new partnerships and there is a vibrant conversation about incentivising collaboration. When it comes to driving system-wide change, and moving from concept into action, efforts towards creating a Circular Economy, and a greener financial system are really gathering momentum.

Unsurprisingly, businesses taking a multi-stakeholder approach to value creation face increased scrutiny that brings both risk and opportunity. Those succeeding are delivering the long-term value increasingly sought after by employees, investors, suppliers and other stakeholders. Those that fail, risk the reputational damage that comes with purpose-washing.

Also inescapable this year is the theme of Climate Change. For the first time, the top five risks in WEF’s own Global Risks Report 2020 are climate-related. This reflects an intensifying of the conversation over the last 12 months and a clear recognition that the scale and speed of action that we have seen to date has been insufficient in the face of the challenge. And the geopolitical impacts of climate change left unchecked are unprecedented. Climate geopolitics is the Issue focus of the Brunswick Social Value Review, launched today.

The View From Davos