Fighting climate crisis on Davos' agenda, but people arriving by pvt jets

The World Economic Forum tried to mitigate the environmental impact of all those private jets traveling to and from this year’s conference in the Swiss town by giving them the option to fill up on so-called sustainable aviation fuel, which is designed to lower carbon emissions compared to normal flights. Many attendees who left the conference after the last session on Friday will nevertheless have had to take commercial planes that use conventional fuel.

Given the WEF’s effort this week to tackle the risks facing the world economy from climate change — environmental issues topped its agenda for the first time in the event’s 50-year history — it’s an uncomfortable situation on its own doorstep. It’s also a high-profile example of an issue confronting the entire conference industry: as concern about environmental damage from air travel has given birth to a “flight shame” phenomenon which has darkened carriers’ outlook, there’s the potential for a knock-on impact on the business of organizing business meetings.

An average conference attendee emits as much as 2,000 pounds of carbon dioxide per meeting, according to TerraPass, a sustainability consultancy — about the same as driving from San Francisco to New York City. Some of the environmental impact comes from piles of brochures that might not get recycled, the food that gets wasted and the marketing swag that can end up in landfills. But the vast majority of carbon emissions come from air travel.

“We must get ahead of change and public perception,” Jason Geall, vice president for Northern Europe at American Express Global Business Travel, said in a speech to business travel and meetings executives in London on Monday. “A failure to act now could leave us vulnerable to existential threats, such as flight caps and increased taxation and regulation.”

For now, environmental concerns haven’t hit events companies. Shares of Relx Plc, which derived about 18% of revenue from events in the first half of 2019, and Informa Plc, whose events unit contributed about 8%, were at or close to all-time highs on Friday. UBS AG analysts led by Adam Berlin forecast 4% annual growth in the global exhibitions sector in the coming year, about the same pace as in recent years.

While more organizers are recognizing the need to mitigate the damage their events can cause to the environment, the industry hasn’t settled on an approach for tackling air travel. Some conference holders include carbon offsetting in the cost of the event tickets. Others leave attendees to address the problem themselves.

Take MWC, the annual meeting for the telecommunications industry in Barcelona. This year’s event starts Feb. 24, and in 2019 more than 100,000 people attended. For four of the last five years, Guinness World Records named it “The World’s Largest Carbon Neutral Trade Show.”

MWC lists among its main achievements the creation of a green logo, and the use of recycled post-consumer bottles in the lanyards for attendees’ badges. Guests are also directed to a website where they can calculate and offset their emissions from attending the event, a spokeswoman said. The GSMA, the mobile industry lobby group that hosts the conference, calculates and offsets any emissions remaining, including from travel.

Though the events industry has been slow to tackle the problem of CO2 emissions from air travel, images of the Australian wildfires and calls for action from activists like Greta Thunberg have sparked interest in making meetings more green, said Nancy Zavada, president of environmental consultancy MeetGreen in Portland, Oregon. Demand for her services, which includes helping meeting organizers arrange teleconferencing and carbon offsetting for attendees’ flights, jumped about 20% in the last quarter, she said.

“The climate, the storms, the weather, are really starting to wake people up to what’s going on,” she said. “It’s also the Greta effect.”

Marcia Balisciano, director of corporate responsibility at Relx, says it’s important not to underestimate the efficiencies that can be achieved by big business events.

“If you come to this marketplace where your customers are going to be, or your suppliers, then it’s going to be a lot easier for you to do your business by traveling once,” she said.

MeetGreen’s president also cautions against being too quick to criticize the environmental measures taken at Davos. The WEF doesn’t serve drinks in single-use plastic containers, uses 100% renewable energy, and to encourage walking in the Alpine snow, offers shoe grips and maps.

“They’re trying,” said Zavada. “They’re putting some stuff in place. They are just so public, they’re easy to pick on.”

Cos that invested in tech, innovation saw major growth: Accenture study

A majority of CEOs have strong confidence in the effectiveness of their current IT systems, but most are struggling to achieve levels of innovation that drive growth and revenue, according to a new study.

The global study by Accenture, released here at the World Economic Forum, showed that companies that invest in scaling technology and innovation across their organisation witnessed significant growth in revenue generation.

The survey, with data from more than 8,300 organisations across 20 countries and 885 CEOs, analysed the adoption of both mature and emerging technologies such as artificial intelligence (AI), cloud, blockchain, and extended reality.

It found that just 10 per cent of companies are making optimal technology investment and adoption decisions and realising the full value of those investments.

"It goes without doubt that the technology path chosen by companies today will determine their financial success in the future. However, majority of companies are failing to realise full value from their investments in technology.

"To lead in the post-digital economy, CEOs need to assess company's current position, reconsider sunk investments and design a new Future Systems strategy, said Anindya Basu, geographic unit and country senior managing director, Accenture in India.

The study found that 80 per cent of CEOs believe they have the right technologies in place to innovate, and 70 per cent claim to be very knowledgeable of their organisation's investments in innovation.

"Most companies are risking significant future revenue growth because of the gap between the potential and realised value of their technology investments," said Paul Daugherty, Accenture's chief technology and innovation officer.

Daugherty further added that "our report offers CEOs a new roadmap to help make strategic investments that narrow this innovation achievement gap and fuel higher growth.

India ranks 76th on WEF's Social Mobility Index, Denmark tops the list

India has been ranked very low at 76th place out of 82 countries on a new Social Mobility Index compiled by the World Economic Forum, while Denmark has topped the charts.

The report, released ahead of the 50th Annual Meeting of the WEF, also lists India among the five countries that stand to gain the most from a better social mobility score that seeks to measure parameters necessary for creating societies where every person has the same opportunity to fulfil his potential in life irrespective of socioeconomic background.

Increasing social mobility, a key driver of income inequality, by 10 per cent would benefit social cohesion and boost the world's economies by nearly 5 per cent by 2030, the WEF said.

But, few economies have the right conditions to foster social mobility.

Measuring countries across five key dimensions distributed over 10 pillars health; education (access, quality and equity); technology; work (opportunities, wages, conditions); and protections and institutions (social protection and inclusive institutions) shows that fair wages, social protection and lifelong learning are the biggest drags on social mobility globally.

In the case of India, it ranks 76th out of 82 economies. It ranks 41st in lifelong learning and 53rd in working conditions.

The Areas of improvement for India include social protection (76th) and fair wage distribution (79th).

The inaugural Social Mobility Report showed that across the Global Social Mobility Index, only a handful of nations across the 82 countries covered have put in place the right conditions to foster social mobility.

The top five are all Scandinavian, while the five economies with the most to gain from boosting social mobility are China, the United States, India, Japan and Germany.

"Creating societies where every person has the same opportunity to fulfil their potential in life irrespective of socioeconomic background would not only bring huge societal benefits in the form of reduced inequalities and healthier, more fulfilled lives, it would also boost economic growth by hundreds of billions of dollars a year," the WEF said.

"The social and economic consequences of inequality are profound and far-reaching: a growing sense of unfairness, precarity, perceived loss of identity and dignity, weakening social fabric, eroding trust in institutions, disenchantment with political processes, and an erosion of the social contract. The response by business and government must include a concerted effort to create new pathways to socioeconomic mobility, ensuring everyone has fair opportunities for success, said Klaus Schwab, Founder and Executive Chairman of the WEF.

The most socially mobile societies in the world, according to the report's Global Social Mobility Index, are all European.

The Nordic nations hold the top five spots, led by Denmark in the first place (scoring 85 points), followed by Norway, Finland and Sweden (all above 83 points) and Iceland (82 points). Rounding out the top 10 are the Netherlands (6th), Switzerland (7th), Austria (8th), Belgium (9th) and Luxembourg (10th).

Among the G7 economies, Germany is the most socially mobile, ranking 11th with 78 points, followed by France in 12th position. Canada comes next (14th), followed by Japan (15th), the United Kingdom (21st), the United States (27th) and Italy (34th).

Among the world's large emerging economies, the Russian Federation is the most socially mobile of the BRICS grouping, ranking 39th, with a score of 64 points. Next is China (45th), followed by Brazil (60th), India (76th) and South Africa (77th).

The report also examines which economies stand to gain the most from increases in social mobility. The economy with the most to gain is China, whose economy could grow by an extra USD 103 billion a year, or USD 1 trillion dollars over the decade.

The US is the economy that would make the second-largest gains, at USD 87 billion a year. Next is India, followed by Japan, Germany, Russia, Indonesia, Brazil, the UK and France.

Most importantly though, the returns are intangible in the form of social cohesion, stability and enhanced opportunity for more people to fulfil their potential.

The report also makes a powerful case for stakeholder capitalism. The most socially mobile economies all share an emphasis on effective social policies that benefit communities as well as provide a platform for healthy, competitive economies. By comparison, economies that are organized more on shareholder value maximization, or state capitalism, tend to perform less well.

It calls for a new financing model for social mobility: Improving tax progressivity on personal income, policies that address wealth concentration and broadly rebalancing the sources of taxation can support the social mobility agenda.

Most importantly, however, the mix of public spending and policy incentives must change to put greater emphasis on the factors of social spending.

Improving social mobility must be the fundamental imperative of this new decade: As long as an individual's chances in life remain disproportionately influenced by their socioeconomic status at birth, inequalities will never be reduced," growth, the green transition, trade and geopolitics," said Saadia Zahidi, Managing Director, New Economy and Society, WEF.

"In a globalized world where there is transparent information on the gulf between the haves and the have-nots', we will continue to see discontent, with far-reaching consequences for economic," she added.

Davos diplomacy likely between India, Malaysia amid palm oil row

Trade ministers from India and Malaysia are likely to meet on the sidelines of the World Economic Forum annual meeting in Davos next week amid a palm oil spat between the two countries, a Malaysian government spokesman told Reuters on Friday.

The government has repeatedly objected to Malaysian Prime Minister Mahathir Mohamad speaking out against recent policies which critics say discriminate against Muslims.

Malaysia, a Muslim-majority nation, is the second biggest producer and exporter of palm oil and India's restrictions on the refined variety of the commodity imposed last week has been seen as a retaliation for Mahathir's criticism of New Delhi's actions.

Union minister Piyush Goyal denied on Thursday that the government was trying to hit out at Malaysia in particular.

The row between the countries, nevertheless, pushed benchmark Malaysian palm futures to its worst weekly decline in more than 11 years on Friday.