The World Economic Forum Annual Meeting happened as scheduled in Davos this year with some of the world’s most influential business leaders, public figures, civil society and academia to set out a vision on what economic growth looks like within today’s shifts to purpose-led operations [1-3].
Set to a media background covering mass protests at a coal mine in Lützerath, Germany, major profits from oil companies or even private jets arriving in Zürich for this world conference set the stage to what was happening at Davos: odds combined with reality – yet there are several takeaways from the summit that highlights how change is happening.
- Increased Global Sustainability
With back to back UN conferences focused on climate change (COP27) and the protection of biodiversity (CBD COP15) held at the end of 2022, sustainability has been a key talking point for decision-makers. While COP27 yielded mixed results, the CBD COP15 set a landmark deal to protect 30% of the world’s natural areas by 2030 by investing in blue and green economies that favor environmental protection [2, 4]. This is backed by a shift by major industrial sectors and a range of economic benefits governments are passing down to sustainable businesses [3, 5]. Having sustainability feature so heavily at Davos, only serves to reiterate how economies are being adapted to work with the environment, not against it.
- A Collaborative Shift
Small and Medium Enterprises (SMEs) have increasingly sought to future-proof their business by implementing sustainable operations, of which collaboration is one of their biggest tools [6]. With Davos emphasizing a shift at the top, it can facilitate pathways to sustainability for SMEs. “Large corporates must also play a part when it comes to supporting SMEs in skills-building, especially around digitization and helping create the ecosystem for environmental transition, including unlocking financing,” explains Agility Chairperson Henadi al-Saleh [7], “SMEs are the bedrock of developed and developing economies. They are at the heart of economic growth strategies for most emerging markets looking to climb the development curve.”
- Innovation & Private Finance
While collaboration between SMEs and major companies can certainly fast-track sustainability, SMEs are faster and more nimble than international businesses when it comes to implementing change [8]. Experts at Davos unveiled a report highlighting the need for faster regulations from governments to enable big businesses to shift faster, but also to protect and promote how SMEs are finding innovative ways of implementing sustainable solutions using private funds [3, 5].“There is clearly a gap in supply and demand for finance,” highlights Caribbean Climate-Smart Accelerator CEO Racquel Moses [9], “There is growing interest from across the private sector to improve the resilience of communities at the front lines of the climate crisis [and] lead to long-term growth.”
- Consumers Are Changing
From the protests at Lützerath to panel discussions at Davos, climate activist Greta Thunberg highlighted how climate action is playing a key role in societal behavior. Purpose-led businesses are helping create a more sustainable future, and upcoming generations are more and more educated as to the risks posed by the current economic status quo [1-3]. Young people are demanding change and are following through. The inherent risk for companies not following sustainability trends or greenwashing will be more costly than the cost of their transition [10, 11]. Consumers are changing, businesses must adapt, and as the first three takeaways highlight, there is an appetite for it at all levels and readily available avenues to explore.
Have you thought about how you can level-up your business to become more sustainable?
Key Takeaways
- Sustainability featured heavily at Davos, and highlights how a shift is happening at the highest levels of economic development [2-5];
- Innovative and purpose-led SMEs can lead the transition much faster than major companies, but the latter will be able to provide new opportunities once regulations are clearer [3, 5, 7-9];
- The new generation of consumers are climate-conscious and keen for change, with activists at Davos calling for more action businesses will need to adapt [10, 11].
References
[1] Vincent Diringer, 2022, “Purpose-Led, Value-Driven – What else?”, LEAD-WiSE.
[2] Vincent Diringer, 2023, “The Global Biodiversity Goal Promoting Purpose-Led Businesses”, LEAD-WiSE.
[3] Tom Idle, 2023, “Davos 2023: 5 Takeaways for Companies Engaged in the Climate Fight”, Sustainable Brands.
[4] Vincent Diringer, 2022, “What is the United Nations Climate Conference, COP?”, LEAD-WiSE.
[5] The Economist, 2023, “The Dispatch: 5 key takeaways from Davos 2023”.
[6] Vincent Diringer, 2022, “Circular Economy, Opportunities for Innovation and Collaboration”, LEAD-WiSE.
[7] Henadi al-Saleh, 2023, “Why big business must support SMEs to achieve economic growth and get to net zero”, World Economic Forum.
[8] Laura Chung and Abby Seaman, 2023, “How small businesses are overcoming the challenge of going green”, the Sydney Morning Herald.
[9] Racquel Moses, 2022, “Building climate resilience through private finance”, the Jamaica Gleaner.
[10] Vincent Diringer, 2022, “Gen Z Challenge Status Quo”, LEAD-WiSE.
[11] Vincent Diringer, 2022, “Greenwashing within the Global Business Context”, LEAD-WiSE.