The recently concluded Davos gathering unveiled pivotal insights and strategies from global leaders, shaping the contours of international discourse. The event spanned a broad spectrum of topics, from the complexities of the current geopolitical landscape and impacts of emerging technologies like artificial intelligence (AI), to the pressing urgency of a sustainable future – under the theme “Rebuilding Trust”.
At the 54th Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland, the event concluded with its signature mix of high-profile discussions and elite networking opportunities. Held from January 15 to January 19, 2024, the Forum maintained its long-standing tradition of assembling a diverse array of global leaders.
The insights from Davos 2024 are set to be further explored and discussed at the upcoming ESG Adria Summit, which will be held from 24-26 April 2024 in Tivat, Montenegro, highlighting their relevance and application to the Adria region. Here are our 4 takeaways from this year's Forum.
Accelerating Sustainable Finance
Sustainable finance transcends mere conceptualization, emerging as a vibrant and evolving practice fueled by the collaborative efforts of a broad spectrum of stakeholders. Central to this innovative approach is the strategic integration of public-private partnerships, showcasing a model where combined expertise and resources lead to impactful sustainability outcomes.
“At a time when global challenges require urgent solutions, innovative public-private collaboration is necessary to convert ideas into action”, said Børge Brende, President of the WEF.
The banking sector remained an important driver for implementing the environmental, social and governance (ESG) agenda in the Adria region. With the focus of accelerating sustainable finance, change of risk modelling demands a systematic and integrated approach by financial institutions. There is a need for realistic, sustainable finance instruments to achieve expected outcomes.
Moreover, the shift towards a low-carbon economy, though essential, presents distinct risks for industries or businesses that are unprepared for mitigation measures. For the strategic plan and ESG commitments, developing partnerships with the most relevant stakeholders help design the best solutions to address the challenges of the environmental transition and the need for sustainable financing with new tools to quantify environmental risks.
As we approach the forthcoming ESG Adria Summit, we will be further exploring the role of regional banks, financial institutions, governments, and international organisations in how to leverage an efficient infrastructure network and create an environment for scalable private sector investments, sustainable finance products, and sustainability initiatives based on relevant framework conditions.
Artificial Intelligence
The recent statement by the International Monetary Fund (IMF) revealed that 40% of employment globally is exposed to AI. Key topics included the necessity for regulatory frameworks, apprehensions about job displacement, the dangers of impersonation and misinformation, and the potential exacerbation of inequalities by AI.
Despite these challenges, artificial intelligence (AI) could be harnessed to revolutionise industries, enhance efficiencies, and create new avenues for growth. The emphasis on utilising AI is not just as a technological advancement, but as a critical asset for the public and private sectors, sustainable future, governance and regulation. In response to the challenges posed by artificial intelligence, the European Union has pioneered the EU AI Act.
"Our future competitiveness depends on AI adoption in our daily business”, said Ursula Von der Layen, European Commission President in her special address at WEF.
Within the landscape of technological advancement, the convergence of artificial intelligence (AI) with sustainable practices stands as a critical juncture, offering groundbreaking approaches to tackle the urgent ecological and social dilemmas. In our continued exploration of AI's progress, we will examine its applications in the Adria region, focusing on how it can drive economic growth, enhance environmental conservation, and improve social well-being, thereby contributing significantly to the region's sustainable development and resilience.
At a panel titled Technology in a Turbulent World, Sam Altman, CEO of OpenAI, expressed optimism about demystifying AI. He stated, "AI enables humans to access better tools and more capabilities than ever before."
Green Transition is Unfolding
According to the Global Risks Report 2024, environmental risks continue to dominate the landscape across short-term (0-2 years) and long-term (5-10 years) time frames.
With these considerations in mind, an important topic that will be discussed at the ESG Adria Summit is a strategic review concerning smart urbanisation to foster more sustainable urban practices in the Adria region. The transformative power of innovative urban planning plays a major role in leading sustainable development within cities. In a time marked by significant urban challenges like lack of green spaces, air pollution, and poor traffic management, the shift towards smart city solutions is not merely advantageous but indispensable.This concept of resilience goes beyond traditional urban economic planning, compelling cities in the Adria region to embrace more comprehensive and forward-looking approaches.
Also, being bullish on the Green Deal has spurred a competitive race in future-oriented technologies. This race is characterised by who can more efficiently store energy, escalate the manufacturing of electric vehicles, and incorporate more renewable energy into the EU's power grids. "We are competing now over who will be able to store energy better, and get more renewable energy into our grids," said Maros Sefcovic, Executive Vice-President for European Green Deal.
We have the opportunity to participate in embracing the green transition, aiming to cultivate a sustainable and resilient future through innovative environmental practices, further advancement in sustainable urban development, optimisation of emissions from maritime transport, and promotion of more renewable energy initiatives.
The Trust Imperative
Many experts assert that for businesses to thrive both now and in the future, there is a pressing need to reform their practices, making them less susceptible to the escalating risks posed by rapid changes, technological advancements, and evolving market dynamics. The central challenge confronting companies is striking a balance between continued growth and profitability while simultaneously reducing emissions and halting the depletion of natural resources.
This dilemma poses a significant question: Can businesses sustain their growth and profitability in an era that demands a sharp reduction in environmental impact and earning trust?
"We have to build new economic models, new businesses and possibly new lifestyles or humanity that are just as good, or even better, than what we have today", said Gim Huay Neo, managing director of World Economic Forum Geneva.
The ability of companies in the Adria region to adapt to these changing conditions and to integrate better practices into their core operations will be a defining factor in their long-term success and resilience. Adopting sustainable business practices but also the ability to attract, retain, and especially retrain talent has become imperative for ensuring the longevity of operations. Integrating gender equality into corporate strategies enriches the workplace culture, fostering an environment where all employees feel valued and empowered. This is a key factor in enabling long-term value creation and high performance.
To effectively address ESG issues, it is essential to foster ongoing communication between the initiatives of enhancing community relationships and fostering innovation through collaboration. Building a robust social licence not only strengthens ties with local communities, leading to mutual respect and understanding, but also sets the stage for a more engaged dialogue on ESG matters. By doing so, companies can avoid facing legal and regulatory hurdles, operational disruptions and are better equipped to identify and mitigate potential risks early on, while maintaining their social licence to operate.
