Davos and the challenge of redefining capitalism

The World Economic Forum is celebrating its 50th anniversary this year. Between 21–24 January, CEOs, investors and policymakers are again gathering in the Swiss city of Davos, where they will meet to discuss the challenges facing the global economy and the need to rethink the rules of capitalism as we know them.

At the meeting, discussions will cover the most pessimistic predictions about global economic growth, geopolitics and international rivalry. For the first time, the climate emergency and its consequences will feature in this year's programme.

Another addition to the 50th Annual Meeting is the attendance of young climate activists, who will be demanding that world economy leaders end fossil-fuel investments and subsidies.

Davos, rethinking capitalism

If capitalism is to be a viable economic system in the future, the rules of the game must be redefined and companies need to set objectives that extend beyond their profits and those of their investors.

The Davos 2020 slogan is "Stakeholders for a Cohesive and Sustainable World". In its 50th edition, the Davos Forum presented attendees with a Manifesto, in which it states that the universal purpose of a company in the Fourth Industrial Revolution must not only be to generate value for its shareholders and employees, but for society as a whole, and to encompass significant environmental and social challenges within economic objectives. According to the manifesto, a company needs to pay its fair share of taxes. It should have zero tolerance for corruption, integrate respect for human rights into the entire supply chain and support fair competition. Klaus Schwab, the Founder of the World Economic Forum and author of the manifesto, believes that stakeholder capitalism "is quickly gaining ground" over traditional capitalism.

For example, just a few months ago, 177 of the world's largest companies pledged that they would reduce their greenhouse gas emissions to zero by 2050, aligning their businesses with the objectives outlined in the Paris Agreement and the recommendations of the scientific community to limit the worst impacts of climate change.

It remains to be seen whether the latest World Economic Forum Annual Meeting in Davos will elicit any meaningful commitments from businesses.

Davos also affected by climate crisis

In the midst of the climate crisis due to global warming, according to the IPCC, greenhouse gas emissions have continued to rise to 1.5 % per year, despite the fact that they need to decrease by 3–6 % per year between now and 2030 to the limit the rise in temperature to 1.5–2°C.

It is for this reason that climate change and the concerns about its consequences will be at the top of the agenda in this edition of the Davos Forum. The title of one of the sessions is rather blunt: "Averting a Climate Apocalypse".

Greta Thunberg will attend the event since, as Klaus Schwab explained, the environment will be of particular significance during the meeting. In addition, the summit host has asked all the companies attending Davos to commit to achieving net-zero carbon emissions by 2050 or earlier and has highlighted how this meeting would be a perfect opportunity to demonstrate leadership in the area of climate change.

El encuentro contará con la presencia de Greta Thunberg ya que, según ha explicado Klaus Schwab, el medio ambiente jugará un papel particularmente importante durante la reunión. Además, el anfitrión de la cumbre ha pedido a todas las compañías que acuden a Davos que se comprometan a aspirar a emisiones netas de carbono cero para 2050 o antes y señala cómo este encuentro es una oportunidad perfecta para mostrar el liderazgo en el cambio climático.  

Sources: Word Economic Forum, The Guardian, Expansión, El País