The top five challenges for the World Economic Forum this year in Davos were related to climate and sustainability. However, climate is not considered among the top ten risks for CEOs, according to a survey published by accounting firm PwC ahead of the forum on Monday (20 January).
“It was very surprising and a bit disappointing”, Bob Moritz, chairman of PwC network, told EURACTIV on Monday in an interview on the margins of the Forum.
This year’s CEO survey by PwC detected unprecedented pessimism among global CEOs. Could that lead to a self-inflicted recession?
It is clear that the CEO survey saw a record drop in the optimism and a record level of pessimism, with 53% business leaders predicting a decline in the rate of economic growth in 2020. If we were to do this survey today, I think you probably would see a little bit more muting of those phenomenon.
Having said that, we don’t want it to be a self fulfilling prophecy, because the mindset of the CEO should be ‘come with confidence and take the actions you need’.
In addition, let’s not overestimate that pessimism. There are some real risks out there. The question is: how can I differentiate between a risk I can do something about versus a risk that’s not controllable? You should take actions on the risk you can control. You should scenario plan and move with speed on the risks you can’t control.
Again, let’s make sure that we don’t get overcome by the amount of risks, and rather focus on what we can do to take actions to be successful and sustainable over time.
Speaking of sustainability, only 25% of the CEOs you surveyed believe that they could seize the opportunities brought by climate action and the shift to a green economy. Is it not surprising, considering how important this issue has become in Davos or in Europe?
To me, it’s very surprising and a bit disappointing that climate did not end up among the top 10 risk list for the CEOs.
It was pleasantly surprising that more than 50% of the CEOs are now seeing it as an opportunity. If they take action and blend climate and sustainability into their strategy, they can differentiate in a positive manner. That’s where there is a competitive advantage to be gained.
The question is: how do you get that across an entire organisation, not only for the case of CO2 emissions, but also in terms of water pollution, or the scarcity of resources? My hope is that the dialogue in Davos this week and the business community over the next year will put this issue higher on the agenda and, more importantly, actions will be taken.
There is a lot of talk about strengthening Europe’s sovereignty vis-à-vis the US and China. Where do you see the EU’s strengths, considering its incomplete monetary union and its internal divisions on foreign matters?
Europe is a region of the world that has opportunities both in terms of what it offers to the rest of the world and what countries within the EU need to do to transform themselves.
For example, many European countries probably focus more on farming and manufacturing. You don’t have a large technical or technology driven agenda today. You don’t have a large organisation like Alibaba, Tencent, Amazon or Facebook.
Governments are going to have to think differently. How do I become a magnet for investment? How do I become a magnet for talent? How do I become a magnet to demonstrate the transformation, so we can get more business and government leaders to change the aura of continental Europe?
Those organisations and countries that do that with speed and urgency will have competitive advantage going forward.
The US and China started de-escalating their trade dispute, but there is an underlying economic decoupling that worries business leaders and analysts. How concern are you about its impact on global trade?
The agreement between the US and China is only a first step. It has to be expanded to other products and services. If you think about trade, it has not yet taken on what I call the technology issues, or on fair practices and abuses. Therefore, there is a lot more tension that still may exist within the system that have to resolve over the longer term.
Secondly, we cannot minimise the need to deal with trade more globally. Government officials and business leaders have to be much more vocal about making sure people understand the upside of the potential for integration and inclusiveness of trade.