The World Economic Forum (WEF) was held in snowy Davos on 23-26 January 2018, bringing together a unique mix of political, civil-society, academic, media and business leaders to discuss the state of the world. This year’s theme- ‘Creating a shared future in a fractured world’- drew a clear picture of increased prominence for collaboration, openness and system-wide action. Seven of the top 10 (impact and likelihood) risks in the WEF’s annual Global Risks Report are now related to sustainability challenges.

Emerging trends – system transformation, the future of jobs and circular economy

The words ‘system transformation’ were widely used in events and conversation at Davos to describe the way forward for business and society at large. The Paris Agreement and the Sustainable Development Goals (SDGs) have by now become a key part of ‘Davospeak’ and there is widespread agreement that these frameworks require a fundamental transformation of the world’s major economic systems.

A second buzzword which was close to every conversation on sustainability was ‘the future of jobs’, linking the fourth-digital revolution to the impacts on employment and work. This is just as much a sustainability issue as climate change, particularly in a society where a growing group of people feel under-served by the system.

A third topic that continues to attract more interest is the circularity of our resource usage in the economy. At a CEO breakfast at the beginning of the forum, WBCSD launched our Factor10 project and a new report in partnership with Boston Consulting Group (BCG). While almost all business leaders believe that circular economy is important to a company’s future success, only half are engaged in circular economy activities. Factor10 aims to offer business the solutions and collaboration required to take advantage of circular economy opportunities.

Continued challenges – gender equality, lack of trust and economic disparity

Gender equality has become a focus across the globe. The time for action on issues such as equal representation of women in the workplace and equality of pay is now. The World Economic Forum set an example during this year’s event, hosting its first all-female panel of co-chairs.

On the topic of economic disparity, Oxfam highlighted further areas for system change by stating in their report that 82% of the wealth generated in 2017 was distributed to the richest 1%. Meanwhile, the poorer half of global citizens -3.7 billion people- saw no increase in their wealth at all. The consequences of this trend are demonstrably damaging and unsustainable in the long-term, and will only be accelerated by the challenges related to ‘future of jobs’ mentioned earlier.

We don’t have to wait for the next election or referendum to know how this inequality is being received by global communities- it is detailed in the annual Edelman Trust Barometer, which was – like every year – launched in Davos. In many countries, trust in government, media and business has continued to fall, with trust in the USA now placed in the lowest quarter of the global index. At the other end of the spectrum, technology remains the most trusted industry sector at 75%, followed by education, professional services and transportation. Credibility in CEOs rose seven points to 44%, with more than two thirds of respondents saying that they wanted to see leadership from CEOs on issues such as policy change.

Insights for 2018 – continued economic growth, a short window for action and a fractured political world

The 2018 World Economic Outlook, launched by the IMF at the forum, offered an optimistic picture. 2017 saw the strongest global economic growth in seven years, with the world economy predicted to grow by 3.9% in 2018 – higher than the 3.7% forecast back in October. India is predicted to be the world’s fastest growing economy in 2018 at 7.4%.

The Indian Prime Minister, Nerendra Modi, did not focus solely on economics during his opening keynote address, describing climate change as ‘the greatest threat to civilization’. Prime Minister Modi also named terrorism and the backlash against globalization as challenges facing our global civilizations. Risalat Khan, a young climate campaigner, gave a stark warning when he said that ‘global leaders have just three years to take action to achieve peak global emissions before they will have failed future generations’.

Among 340 political leaders, this year saw a record number of Heads of State make the journey to Davos. Almost every Head of State who spoke at the forum, including Prime Minister Theresa May, Chancellor Angela Merkel, President Emmanuel Macron and Prime Minister Justin Trudeau, made an appeal for collaboration and openness. President Donald Trump, in his closing address added that ‘America first does not always mean America alone’.

WBCSD in Davos

I was proud to see WBCSD lead six events throughout the week in Davos, on issues ranging from food to finance and from zero-emission mobility to integrating environmental, social and governance (ESG) considerations into corporate risk management systems. We have published a separate newsletter called Insider Perspective on our website, providing you with further details from these sessions.

For now, I wanted to share with you this high-level summary and some of the reports and projects launched in Davos. I look forward to working with each of you and your companies to ensure that business has a leading role to play in the system transformations that lie ahead.

Warm regards,

Peter Bakker
President & CEO, WBCSD

Zita Szederkényi will take up the position of head of the Future Leaders program at the Business Council for Sustainable Development Hungary (BCSDH) from January 2018.

Zita has been playing an active role in BCSDH’s “Future Leaders” talent program for some years.

Since November 2014 she has been working in the corporate relationship department of Dreher, where she is in charge of communication- and sustainability-related areas. Previously, she was accountable for similar activities at Heineken for many years.

She is most proud of her accomplishments in the field of sustainability. Her company’s sustainability indexes have seen a sharp increase since 2015, and Zita sees the key to success as cooperating with the right partners. She created a breakthrough with the “Ésszel iszom” program which won the Prizma prize, and the initiation of a gapfiller program that teaches about the dangers of alcohol consumption during pregnancy, in which the company cooperated with the LÉTRA Foundation.

She is a volunteer and mentor in the field of debt management at BAGázs, which is engaged in Roma integration. Furthermore, she assists Amnesty International’s work as a volunteer human rights instructor. She holds an arts degree from the French faculty of Eötvös Loránd University, and an degree in economics from the faculty of international communication at Budapest Metropolitan University. She devotes her leisure time to activities like travelling and becoming familiar with different cultures. She is interested in intercultural communication and basically the whole spectrum of corporate sustainability.

She will fulfil the duties involved with the “Future Leaders” talent program while remaining Dreher’s corporate relationship manager.

The previous head of this program, Zsuzsanna Répássy, will continue her career with developing her own business after a very successful year of work with this program. We wish to thank her for her conscientious work!

On 24 November, a professional jury auditioned six university students’ applications at the E.ON headquarters in Budapest for the latest round of The Future Leaders Talent Program, which was started by the Business Council for Sustainable Development Hungary (BCSDH).

The 2018 scholarship was unanimously awarded to Gábor Földvári, who is presently doing an M.Sc. in Finance at Corvinus University. The jury – which consisted of corporate professionals – agreed that not only was the presentation’s quality and creativity remarkable, but so was the applicant’s high-level of theoretical knowledge and commitment to sustainability.

Eighty percent of leading companies already have or are presently developing a carbon reduction strategy

According to 81% of respondents, environmental responsibility is one of the most important and most practical areas in which the long-term sustainability of corporations can be demonstrated – as revealed in the Business Council for Sustainable Development in Hungary’s (BCSDH) own, non-representative survey. The organisation –  with more than 70 corporate members who contribute 30% of Hungary’s GDP – was interested in how 110 companies that signed the Recommendation for Business Leaders evaluate their progress in taking responsibility for environmental accomplishments, and the action they have taken towards protecting the climate.

The survey reveals that while 2016 reflected an attitude of euphoria after the signing of the Paris Climate Accord – as reflected in the survey from that year – in 2017, especially after the USA pulled out, this optimistic picture became more nuanced.

“It is already quite clear that this turnaround by one of the most powerful countries in the world cannot put a stop to climate-related cooperation. This fact is also proven by the stand taken by our parent organisation, the WBCSD, which articulated its commitment to continuing its work – which we also support. High-level leaders of the largest American corporations have also reiterated their support for climate-related action, giving hope that sustainability issues will remain on the top of their list of priorities regarding their operations, and the members of the BCSDH support this.”- stated Attila Chikán Junior, President of BCSDH about the relevant points of the survey, carried out with 59 companies.

Four-fifths of all companies already have or are presently developing a carbon-reduction strategy

The practical realization of the BCSDH protocols which were created in 2016 to apply to climate protection are clearly traceable in the survey.

71% of respondents operate an environmental management system. In response to another question, 93% of corporate leaders claimed that it was important to properly measure and report carbon emissions, and 63% of all companies already have a strategy in place to reduce their carbon footprints.

This also offers hope that more leaders of domestic companies are realizing that the responsible use of natural resources and the creation of goals and measures related to this goal are similarly important.

Organizations are open to using alternative energy

Nearly half of all respondents stated that they are willing to change to using alternative energy in the future, and they have already taken steps to achieve this goal.

A further 32% responded that they already use alternative energy. This means that almost all large enterprises are undergoing a process of changing to use alternative energies. It is important to point out, however, that the uptake of alternative energy and the improvement of its composition depend very much on regulators.

The downloadable version of the BCSDH survey is available here:

http://bcsdh.hu/wp-content/uploads/2017/10/Felmeres_2017_ENG.pdf