A remote Davos focuses on building back better

rethink sustainability

A remote Davos focuses on building back better

It was no great surprise that the central theme of this year's Davos summit was how to respond to the coronavirus pandemic that has ground the planet to a halt over the last year. Furthermore, the 1,200 delegates at this year’s events 'attended' via video link, another illustration of how disruptive coronavirus has become across the world stage.

As the vaccine roll-out continues to various degrees in different countries, the attendees focused their minds on "A Crucial Year to Rebuild Trust," the overarching theme at the World Economic Forum Annual Meeting. In one of the headline talks, Anthony Fauci1, the United States' infectious diseases chief, laid out the importance of getting the second dose of Covid-19 vaccine to people to ensure full efficacy.

Making economies work in a better way for people appeared to be the binding thread that brought the seven themes of the 51st session together: how to save the planet; fairer economies; tech for good; society and work of the future; better business; healthy futures and beyond geopolitics. Klaus Schwab2, the founder of the World Economic Forum, said the pandemic showed the need for a "great reset" around the world, as the existing systems are, evidently, no longer fit for purpose.

…the pandemic showed the need for a "great reset" around the world, as the existing systems are, evidently, no longer fit for purpose

Saving the planet for the next generation

The ongoing threats to the planet and this generation's responsibility to solve them were clearly illustrated by Greta Thunberg3, who again reminded leaders of the promises that they had made to the generations to come. "Because when it comes to facing the climate and ecological emergency, the world is still in a state of complete denial," she said.

'How to Save the Planet' focused on how sustainability is being applied to many areas of human activity in order to tackle environmental threats. However, delegates heard that even if we reached a situation where sustainable solutions were being taken across society, the damage already caused to natural resources and the environment could not be addressed. One of the ways to redress the imbalance and 'build back better' after the pandemic is through helping cities to become net-zero4 by reducing carbon dioxide emissions. Some 75% of emissions come from cities, delegates were told, mainly through energy use in buildings and mobility.

One of the ways to redress the imbalance and 'build back better' after the pandemic is through helping cities to become net-zero by reducing carbon dioxide emissions

Creating a better future is a key theme at Lombard Odier. In January, His Royal Highness The Prince of Wales announced the Natural Capital Investment Alliance, a joint venture between Lombard Odier, HSBC Pollination Climate Asset Management and Mirova, an affiliate of Natixis Investment Managers. The alliance aims to mobilise $10bn towards Natural Capital themes across asset classes by 2022. Although half of global GDP depends on Natural Capital, there are currently only a limited number of initiatives to promote Nature as an investment opportunity. It follows the launch of our Natural Capital strategy, which aims to identify profitable companies poised to take advantage of four unstoppable growth opportunities: the circular bio-economy, resource efficiency, outcome-orientated consumption and zero waste.

Working towards net-zero

Mark Carney, the former Bank of England governor who is now the special envoy for climate action and finance to the UN, told delegates that the world is at a tipping point in the battle against climate change and called on the financial sector to be part of the solution in striving towards net-zero. He said schemes such as the carbon tax were important in starting change on the financial markets as they enabled more money to go towards green projects.

As the world is already in the midst of a massive, wholesale transformation towards a sustainable, net-zero economy, Lombard Odier believes that there will be a $5.5 trillion investment opportunity annually for the next fifteen years.

Commenting on Davos, our Senior Managing Partner, Patrick Odier, said there has been a shift in government thinking as to the shape of the recovery after the pandemic has abated. He said that there has been a move towards investment in more sustainable ventures. “In many cases towards greater investment in greener economies, and this can be positive, but it must be done well and in good time,” he said.

…there has been a move towards investment in more sustainable ventures... and this can be positive, but it must be done well and in good time

The possibilities that exist within the circular economy have prompted IKEA to embrace circular thinking, according to an interview that the company's CEO Jesper Brodin gave as part of the Davos events. The company aims to make 100% of its products renewable or recyclable. "That calls for making sure products can be broken down into parts in an easy way. It's about long-lasting solutions, too. We have a business that makes new mattresses of old ones. That's one example," he said. "But the other part of the equation is to understand it is still okay to use raw materials as long as they're renewable, like well-managed forestry with a climate-neutral value chain."

The transition to a circular, lean, inclusive and clean (CLIC™) economy is an urgent necessity for our current model, which is unsustainable. Moves such as that by IKEA are examples of how we must transform in a more regenerative state.


A more responsible China

The growing economic success of China means that it now has a great international responsibility, said Mr Odier. He said that this could be illustrated by China’s helping developing countries with immunisations.

"An important step in this direction could be to help the efforts of immunisation in developing countries to strengthen their social and economic recovery," said Mr Odier.

It is only through reimagining our future by focusing on a decarbonised planet that we will be able to build back better.


Wrapping up

While this is far from a normal Davos conference, the spirit of tackling the world's big problems is still the consistent theme at this year's event. But it is not just the pandemic that took up the minds of delegates, but also the ever-present threat to the world around us. It is only through reimagining our future by focusing on a decarbonised planet that we will be able to build back better.

1 https://www.bloomberg.com/news/articles/2021-01-25/fauci-says-he-s-worried-about-delaying-second-covid-vaccine-dose
2 https://www.washingtonpost.com/world/2021/01/29/davos-merkel-macron-coronavirus/
3 https://www.weforum.org/agenda/2021/01/greta-thunberg-message-to-the-davos-agenda/
4 https://www.washingtonpost.com/world/2021/01/29/davos-merkel-macron-coronavirus

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