For the rich and powerful descending around the Swiss Alps next week for the World Economic Forum (WEF), the global economy’s ability to react to climate risks has risen to a top priority.
For the very first time, environmental concerns dominated the very best five long-term global risks for business leaders, investors and policy-makers surveyed in the WEF's annual report, published on Wednesday.
In its 50th edition, the WEF in Davos will concentrate on preventing the erosion of international solidarity – a principle that underpinned the WEF’s foundation – and seek ways to build political and societal cohesion that can drive a global response to issues for example climate change.
US President Donald Trump, who's taking out from the 2023 Paris climate agreement, German Chancellor Angela Merkel, EU Commission President Ursula von der Leyen and Swedish climate activist Greta Thunberg are among those because of attend the 21-24 January event.
The 750 respondents to the WEF’s 2023 Global Risks Perception Survey ranked extreme weather events, climate action failure, natural disasters, biodiversity loss and human-made environmental disasters the top five most likely risks for the global economy this season – in front of data fraud, cyberattacks, water crisis, global governance failure and assets bubbles.
The world’s elite also identified climate action failure as the risk using the greatest impact on the worldwide economy. In the short-term extreme heatwaves and the destruction of natural ecosystems were ranked third and fourth as the risks most likely to increase in 2023.
“The horizon has shortened for preventing- or even mitigating-some of the direst consequences of global risks,” wrote Borge Brende, WEF president. “It is sobering that when confronted with this development, when the challenges before us demand immediate collective action, fractures inside the global community seem to simply be widening.”
The Usa is the only nation quitting the Paris Agreement with Trump doubting that man-made emissions are the main cause of worsening climate change. He wants instead to bolster jobs in the US coal industry.
Policy fractures also appeared strongly at the UN climate talks in Madrid, Spain, in December when large emitters blocked progress despite an increasing alliance of vanguards among small, vulnerable and progressive European countries calling for ambition.
Teresa Ribera, Spain's minister from the ecological transition, warned countries that although “the rule-based multilateral order is being challenged,” the planet needed “global cooperation to manage the global challenge of climate change”.
“The good news would be that the window for action continues to be open, if not for much longer,” Brende wrote within the report's preface, citing growing commitments from businesses to “look beyond their balance sheets”.
And indeed, concerns of climate and environmental risks’ negative impact on the global economy take presctiption the rise.
In recent times, an increasing number of businesses and investors have committed to more ambitious climate action and the decarbonisation of their operations and investments.
On Tuesday, BlackRock, the world's largest fund manager with $7tn in assets, revealed changes to the fund's purchase of instructions to clients, naming climate change a vital element in affecting economic growth, asset values, and financial markets.
The fund said it can finish direct investments in companies generating more than a quarter of the revenues from thermal coal production. However, it will remain among the largest investors in fossil-fuel companies.
“Climate change has turned into a defining factor in companies' long-term prospects,” wrote Larry Fink, BlackRock chairman and CEO. “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.”
BlackRock has previously belong to fire from climate campaigners for backing fossil fuel investments and neglecting to shift its investment strategy in the face of mounting climate emergency. Now, the choice could push other fund managers and companies across the world to consider climate risks in decision-making.
“Climate change is nearly invariably the top issue that clients around the world raise with BlackRock,” Fink added.
But for climate activists, commitments and promises alone won’t do. As the Davos elite needs solutions on methods to mitigate global warming’s negative impacts on the world’s economy, campaigners are demanding governments and also the private sector stop cashing in on the fossil-fuel economy.
Writing in the Guardian, Thunberg and 21 other young climate activists demanded all companies, banks, institutions and governments attended the Davos summit “immediately halt all investments in fossil fuel exploration and extraction, immediately end all fossil fuel subsidies and immediately and completely divest from fossil fuels”.
They wrote: “Young climate activists and college strikers from around the world is going to be present to put pressure on these leaders.”
