The meeting of the global elite at Davos is all about insights and trends — but, there is one risk not yet on the business radar, that is actually the one to watch, says Jim McClelland.
The air up in the Swiss Alps might seem pretty rarified, but even this stellar get-together of the global elite — where heads of state and government big-wigs rub shoulders with business titans and finance gurus — has not proved immune to pandemic disruption.
Therefore, the Davos Agenda 2022 took place in a virtual event format last week, 17-21 January, with the in-person meeting of the World Economic Forum (WEF), held annually in the mountain resort, now deferred until May.
Begin your business plan for biodiversity, today!
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Covid notwithstanding, Davos remains such an influential event on the world business calendar that its importance can be measured in the myriad indirect outcomes and effects. For the many uninvited, it serves as much as a catalyst for action, as an actual host event.
In this sense, it works a bit like the month of Veganuary does for plant-based markets, stimulating and showcasing hundreds of announcements and product launches worldwide.
As a result, timely updates aired and shared this month range in theme from Transitioning Industrial Clusters to Net Zero, via a Call to Action for Shipping Decarbonisation, to the latest Circularity Gap Report, presenting 21 solutions for every business, city and nation.
Stepping into the limelight on sustainability issues, therefore, is a veritable who’s who of corporates and consultants, from Enel and Accenture, to Edelman and Coca-Cola HBC.
Letter from Larry Fink
Also sent out around this time and much-discussed at Davos is the annual open letter to CEOs penned by billionaire businessman Larry Fink, the heavyweight Chairman and CEO of multinational investment management corporation BlackRock.
Not surprisingly, Net Zero is a key topic in his letter once again and under the section on Capitalism and Sustainability, he forecasts a shift in the future shape of privately-owned startup companies valued at more than $1 billion, more commonly known as ‘unicorns’:
“The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators — startups that help the world decarbonise and make the energy transition affordable for all consumers.”
One word conspicuously absent from Larry’s current letter, however, is ‘biodiversity’ — but, that notable omission looks set to change in iterations to follow over the medium- to long-term future, according to findings from leading global risk experts surveyed by the WEF.
Nature and order of global risk
In truth, the Global Risks Report 2022 published by the WEF does not make for happy reading. Only 11% of respondents thought the world would be characterised by an accelerating global recovery towards 2024, while 89% perceived the short-term outlook to be volatile, fractured, or increasingly catastrophic
Fully 84% of those surveyed expressed negative feelings about the future. When you get beyond the immediate fear factor and drill down into the detail, though, both the identity and the priority of the risks perceived alters significantly over time.
Over the long term — the next 10 years — half the Top 10 global risks by severity are categorised as environmental, including all the top 3: Climate Action Failure, Extreme Weather and Biodiversity Loss.
However, in the short term (0-2 years), whilst Climate and Weather are both top three, they are separated by Livelihood Crises at number 2. Biodiversity Loss is not even on the list.
Then over the medium term (2-5 years), Climate and Weather are up at 1 and 2 respectively, this time with Social Cohesion and Erosion in third place and Biodiversity Loss making its first appearance, way down a number 9.
So, what we see, as a progression over time, is an understandable short- to medium-term concern about economic downturn and disruption in a post-pandemic world, potentially leading to divergent fortunes and exacerbated social inequality.
The big medium- to long-term risk factor, though, that is literally not on the Top 10 business radar for the next two years, is Biodiversity Loss. This is the one to watch.
So, looking down the line, what can a business do to plan for future risk, whilst at the same time necessarily responding to the challenging market conditions it faces in the short term?
The quick answer is simple: Decide who is responsible for biodiversity (loss).
Business plan for biodiversity
Right now, this late-emerging trend might not warrant the creation of a full-blown new C-Suite position of company CBO (Chief Biodiversity Officer), or maybe VP, Director, even Senior Manager job titles. However, somebody in your organisation should still be given strategic responsibility for the direction and management of your biodiversity portfolio.
Tasked with writing and communicating your biodiversity strategy through to 2030, they will likely not occupy a true power seat at the boardroom table over the first 24 months, but according to WEF survey soundings, their voice will get stronger with every passing year.
So, put a big green tick in your calendar for 22 May — which is not only Biodiversity Day 2022, but also, conveniently, the date of the first face-to-face day back in Davos. Whether you want to call it horizon scanning, resilience planning, or just plain risk management, 2022 can effectively mark the start of a new (and renewed) business focus on biodiversity.
Begin your business plan for biodiversity, today!