This week marked the 50th anniversary of the World Economic Forum in Davos. The landmark event, themed around Stakeholders for a Cohesive and Sustainable World, was attended by our Founder and CEO Susan Boster, who had the pleasure of convening a panel discussion in The Equality Lounge.
Titled Powerful Partnerships: Can Private-Third-sector Partnerships Unlock the Future?, the panel explored the partnership opportunities corporations are seizing to promote loyalty, relevance, and social purpose, especially with regards to culture and the UN SDGs. Susan was joined in conversation by Johanna Waterous (NED, Cofra Holding, A.G. and Chair, Patrons of Royal Botanic Gardens, Kew), Huw van Steenis (Group Managing Director and Senior Adviser to the CEO and Chair, Sustainable Finance Committee, UBS), and Ed Williams (President and CEO, UK and Ireland and Vice Chair, EMEA, Edelman). The discussion touched on many of the prominent themes of this year’s forum, from ESG metrics to the importance of purpose and trust. Below are the key takeaways from the panel discussion and our time in Davos.
The climate crisis took centre stage at Davos, amidst an atmosphere of heightened urgency following the unprecedented Australian bush fires and the much-publicised activism of Davos headliner Greta Thunberg. The gravity of the climate emergency was further underlined in the World Economic Forum Global Risks Report, published just prior to Davos, in which the top five spots were occupied by environmental concerns. Concern for the climate manifested in the finer details of the World Economic Forum, with organisers discouraging the distribution of single-use freebies and encouraging attendees to take the train, or better still, travel on foot to events where possible.
Against this backdrop, Huw spoke during our panel about the importance of collaboration in facilitating the transition to a lower carbon economy, making particular reference to the work of UBS in this field. The company’s investment in academia and climate science sits at the intersection of public policy and the creation of frameworks for the measurement of sustainability. Huw is an advocate of partnerships, believing that the success of the transition to a more sustainable future is dependent on the union of government, finance, academia and social groups.
A recurring topic of conversation at Davos this year was the need for improved metrics to measure ESG progress. Companies need to be held accountable for their output in these areas and to report on this in the same way as they would on profit and loss. Huw spoke about the cacophonous abundance of approaches which need to be harmonised to produce a standardised system of measurement. It seems that the answer might lie in the metrics proposed by the WEF’s International Business Council, a hot topic at Davos, which are expected to be adopted by most large companies in the year ahead and are already agreed by the ‘Big Four’ accounting firms. The measurements will focus on governance, planet, people and prosperity, and will be agreed by both operating companies as well as investors, creating a unified system by which to gauge progress towards sustainability and the value companies are creating for their stakeholders.
‘Stakeholder capitalism’ was the phrase on everyone’s lips at Davos, following the amendment of the WEF Manifesto in which companies’ purpose was redefined in new terms: engaging stakeholders in shared and sustained value creation, and achieving ESG objectives should be priorities for businesses moving forward, rather than the focus being solely on the generation of wealth. Key to the discussion on partnerships is the manifesto’s suggestion that companies themselves must act as stakeholders, collaborating with governments and civil society to improve the world’s prospects through the harnessing of core competencies, entrepreneurship and relevant resources. The new direction echoes the American Business Roundtable’s recent call for inclusive capitalism, and the departure of corporations from the Friedman doctrine and shareholder primacy. In the words of Marc Benioff, Salesforce CEO, “capitalism, as we know it, is dead.”
Johanna drew on this during the panel, commenting that the face of capitalism has changed, with businesses now having a purpose to support stakeholders more broadly and not just shareholders. Consequently, the role of the partnership has evolved: partnerships were once solely about financial support, but now are drivers of purpose, values and ethics. Purpose was everywhere at Davos this year, and perhaps the most featured word on company signage on the main promenade. According to Edelman statistics, purpose, together with ethical drivers such as integrity and dependability, drives 76% of the trust capital of business, making it a worthy catchword of the WEF this year.
A much discussed topic in Davos was the legitimacy of ESG initiatives and how far they reflect a company’s true identity rather than being used as a marketing tactic to burnish corporate brands. The role of partnerships within this dialogue is often shrouded in cynicism; sceptics believe that companies are seizing these collaborations as a badging or PR exercise, an approach which in recent years has been labelled as ‘greenwashing’.
Johanna spoke about her concerns over the ever more prevalent idea that money has morality, and the power of activists to dictate what legitimate or acceptable sources of funding are. Failing to consider that imposing these restrictions detrimentally impacts companies’ capacity to bring about positive change is a huge oversight, and one that will surely have a profound impact on areas such as culture, which can not rely on the financial support of government alone.
Crucial to the received perception of cross-institutional partnerships is the notion of public trust, which Ed addressed in relation to the results of the Edelman Trust Barometer, a survey addressing societal trust in government, business, NGOs and media. 2020 is the first year that Edelman has reported on partnerships across these societal institutions, revealing that the public expect the private and public spheres to work together to combat the challenges we face today, from the climate crisis, to biodiversity threats and inequality.
The Trillion Trees Campaign made headlines this week after receiving the support of the WEF. It has been backed by over three hundred companies and many high profile figures, including WEF founder Klaus Schwab. Some have expressed concerns that the scheme is simply a greenwashing exercise, and a way for polluters to clear their consciences without changing their behaviours. Although the initiative is undoubtedly a step in the right direction, it is clear that companies need to do more than simply add their names to the growing list of advocates, and must reflect their commitment to change-making through the prioritisation of sustainable practices within their business models.
In addition to the environment, a key concern outlined in the WEF Global Risks Report was the impact of technology, with respondents citing the lack of a global technology governance framework and cyber-insecurity as significant risks. A prevalent conversation at Davos was around the upskilling of employees in the light of jobs threatened by automation. The Edelman Trust Barometer revealed that although around half of those surveyed trust businesses to solve this problem, partnerships between businesses and government will be crucial in order to equip workers for the future.
Technology has a crucial role to play within the development of multi-stakeholder partnerships, as is outlined in UN SDG 17, which states that the sharing of “knowledge, expertise, technology, and financial support is seen as critical to the overall success of the SDGs.” During the panel discussion, Ed spoke about the Institute of Strategic Dialogue, an organisation that monitors extremism and tracks the spread of disinformation online. The work they do is dependent on their partnership with both government and big tech platforms, and is an excellent example of a cross-sector collaboration bringing about positive change through the eradication of misinformation. Microsoft’s impressive pledge to become carbon negative by 2030 and remove all the carbon it has ever created by 2050 will similarly only become a reality through a multi-stakeholder approach, emphasising once again the importance of partnerships in bringing about large-scale change. In the words of Johanna, “without partnership, nothing is going to happen at scale, and scale is the issue.”
Boster Group’s principal takeaway was that collaboration through partnerships is essential to achieving change. No single entity can take on the complex challenges facing modern society: summarised by Klaus Schwab’s statement that “we can’t make change alone.” The spheres of academia, government, finance and technology must unite. We believe in the power of partnerships to mobilise change on the basis of shared values, untapped assets and complementary capabilities. We look forward to a future in which partnerships are valued as an essential tool in the creation of value, purpose and positive impact.