Reflections from Davos 2020

Unseasonably and somewhat unnervingly mild temperatures provided a fitting backdrop for what emerged as the top issue at the 2020 World Economic Forum Annual Meeting: climate change and its risks.

But that was far from the only topic. At the end of this year’s Annual Meeting, I sat down with Rik Kirkland, our director of publishing, to share my reflections.

Here are four key takeaways, which are also captured in this video.

Climate risk is firmly established as a C-suite issue. Research published in reports like the McKinsey Global Institute’s “Climate risk and response: Physical hazards and socioeconomic impacts” has clearly convinced more and more global policy makers and business leaders that the problem of climate change has moved from a far-off priority to a here-and-now risk that demands action. Personal experiences, whether from watching the wildfires in Australia or California or numerous other small examples, have also brought home the reality that this is a topic that requires leadership from the top.

While there wasn’t much debate about the science, executives and investors were concerned about the lack of reliable data on the efforts companies and society are making, not to mention their impact. Greater clarity is required in order to speed development of new standards to help markets act more efficiently and reward progress.

Beyond metrics, the leaders I spoke with are thinking about the problem in new and creative ways. They are taking a clear-eyed look at what is driving their carbon footprints, beginning to quantify the cost of inaction, and asking how they can accelerate positive change in a way that fits within their core business agenda.

That’s a huge shift in tone from even a year ago.

The short-term economic outlook is “optimistic.” First, a caveat: the Davos consensus is not always right. Last year, many feared 2018’s synchronous growth would turn into synchronous recession. That did not prove to be the case. In fact, by a number of measures, economic growth in many countries in 2019 turned out just fine and markets hit all-time highs. […]

People love AI. People fear AI. While climate bumped technology from last year’s number-one slot as the Big Topic, tech and AI in particular again featured prominently. […]

The stakeholder era is here. The Annual Meeting’s overarching theme this year was “stakeholders for a cohesive and sustainable world.” A number of sessions covered the breakdown in trust, probed globalization’s shortcomings, and underscored the need for companies to think not only about investors but also the planet, employees, and the communities in which they operate. […]

Kevin S

By Kevin Sneader

Serves as the global managing partner of McKinsey & Company

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