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Executive Perspectives

EXECUTIVE PERSPECTIVE: Message from Davos: We are Sleepwalking our Way to Catastrophe

“Many current economic incentives and growth models are focused on delivering incremental and marginal growth – boosting GDP by a percentage point here and there. Meanwhile, we’ve lost the equivalent of 25% of global GDP in a single generation.”

This piece strikes a familiar refrain.  We, as a planet, are slowly accumulating risk which will be devastating if left unchecked.  And many of the most alarming trends continue to worsen. Why?  Looking at the emissions data on the largest carbon-emitting business models of the world, the answer is clear.  There is insufficient leadership from those who lead and invest in these businesses.  With warnings like in this piece from experts at the World Economic Forum’s Davos meeting, the risks and opportunity around leadership are steadily rising.  Tim Nixon, Managing Editor, Thomson Reuters Sustainability.

Humanity currently appears to be sleepwalking its way to catastrophe.

From cyber security and data fraud through to economic vulnerabilities, the world we live in is certainly fraught. But of all the potential risks we face, none are as likely to occur and cause as much damage to humanity, as extreme weather events, climate change, natural disasters, and other environment-related risks.

For the third year in a row environmental risks feature prominently in the World Economic Forum’s Global Risks Report 2019 in which experts’ forecast the biggest risks facing the world. Add water crises and ecosystem collapse into the mix and we have a recipe for physical, economic, and societal disaster.

Source: Global Risks Report 2019, World Economic Forum

The last year has provided new evidence – as if we needed any more – that our natural world provides a vital foundation to our economic growth, human health and wellbeing of our communities. And that this foundation is continuing to become more fragile.

Consider how climate change is increasing the fragility of the human food system, which in turn affects human health and productivity. Increased levels of carbon dioxide in the atmosphere, for example, affects the nutritional composition of crops like rice and wheat – dietary staples in much of the world.

By 2050, this could lead to zinc deficiency in 175 million people, protein deficiency in 122 million, and loss of dietary iron for 1 billion people. Where climate-related disasters strike, it can cause acute food insecurity. In 2017, approximately 39 million people across 23 countries suffered this fate.

The supply chains which underpin the food and goods we consume are also affected, while the infrastructure we rely upon for food, water, travel, and communication – enabling us to live and work as we do today – are also at risk from climate change and rising sea levels.

In the US East Coast a study estimated that high tide flooding caused 100 million hours of delays for drivers every year, while a sea level rise of just 30cm in the US would expose 60 wastewater treatment plants, affecting more than 4.1 million people.

We also saw further evidence of the vicious cycle between environmental deterioration, conflict and regional stability. The President of the UN Security Council identified “climate change and ecological changes” as drivers of instability in West Africa and the Sahel, which together cover 26 countries.

While in Central America, observers suggest that drought and climate change will further increase migration to the US. Five Central American countries are among the 15 most climate-vulnerable in the world. We also learnt that in 2017, extreme weather displaced 18.8 million people.

We’re just scratching the surface. Despite these quite profound risks, the deteriorating state of our natural environment largely remains an issue at arms length for many people. It is overtaken by more pressing issues – work pressures, balancing the household budget, getting the kids ready for school, and so on. There’s a long list of things that feel more immediate and as though they are more tangible parts of our everyday lives.

The same dynamic is at play for many business and government leaders. There is a long list of things that feel more immediate and more urgent than safeguarding the environment.

If you feel like you’ve heard this all before, it’s because you probably have. We made a similar warning last year. And the year before. And we’re certainly not the only ones saying this.

Humanity currently appears to be sleepwalking its way to catastrophe.

The Intergovernmental Panel on climate Change could not have put it more bluntly when it said in October 2018 that we have at most 12 years to make the drastic and unprecedented changes needed to prevent average global temperatures from rising beyond the 1.5°C target nations signed up to in the Paris Agreement.

But climate change is not the only threat. Our oceans have been warming 40% faster than previously thought and are also struggling to cope with the 12.7 million tonnes of plastic waste that end up in the ocean every year.

The accelerating pace of biodiversity loss is also a significant. WWF’s Living Planet Index reports that the average abundance of more than 4,000 species across the globe has declined by 60% since 1980.

These are interconnected risks – and the stakes couldn’t be higher.

According to one global study, the value of ecosystem services back in 1997 was estimated at $145 trillion per year. By 2014 this had dropped to just $125 trillion due to damage to Earth’s ecosystems. This drop is roughly equivalent to one quarter of the world’s GDP.

Many current economic incentives and growth models are focused on delivering incremental and marginal growth – boosting GDP by a percentage point here and there. Meanwhile, we’ve lost the equivalent of 25% of global GDP in a single generation.

We seem to be missing the forest for the trees. Sometimes quite literally.

While the window for averting catastrophe is closing quickly, it hasn’t slammed shut just yet. That’s why these issues are firmly on the agenda as Heads of State, global CEOs, and heads of international organisations, civil society, and youth representatives met in Davos at the World Economic Forum’s Annual Meeting.

The Secretary General of the United Nations will also host a high-level climate summit in September to further rally action. Just last month he told countries gathered in Poland at the UN’s annual climate meeting that wasting our current opportunity to take action to stop runaway climate change would ‘not only be immoral, it would be suicidal’.

In fact, the next 2 years provide a series of ‘moments’ that could stimulate enough awareness, ambition and action to set us on a path to recovery. It’s an incredible opportunity to set things right for the interconnected challenges of climate, oceans, biodiversity, and forests.

For our part, we retain hope that humanity can awake from this deadly slumber. To lose such hope would be unthinkable.

Now seems like a very good time for the alarm clock to ring.





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