The Path Ahead for 2021 as Seen in the "Davos Agenda"

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▼ "Davos Agenda 2021." January meeting held online

▼Circular economy pilot projects also accelerate

▼ESG momentum intensifies. Initiatives toward "Stakeholder Capitalism Metrics"

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"Davos Agenda 2021". January meeting to be held online

The COVID-19 pandemic has fundamentally altered our values. International conferences, once routinely held in person around the world, are one example.

The World Economic Forum (WEF) Annual Meeting, known as the Davos Conference, traditionally held in Switzerland in late January, brings together world economic leaders face-to-face to discuss the year's critical issues.

"The year begins in Davos." For the first time in its 51-year history, this conference, which has led global discussions for the year, was held entirely online. The in-person Annual Meeting has already been postponed twice and is now scheduled for August.

Positioned as "a critical year for rebuilding trust," this year's event featured over 100 sessions open to the public over five days. Regarding the decision to insist on an online opening event despite postponing the in-person gathering, WEF Chairman Schwab stated:

"Amid the pandemic, the need to reset priorities and the urgency of institutional reform have intensified worldwide."

This meeting, named "Davos Agenda 2021," featured prominent statements by leaders from

At this meeting, named "Davos Agenda 2021," statements by leaders from various countries, including Japan, emphasizing decarbonization, international cooperation, and efforts toward a green society were prominent.

Other topics included

1. Concerns about developed countries purchasing more vaccines than necessary
2. the dysfunction of international organizations
3. Delays in responding to climate change

There were many issues stemming from nationalism, and much of the content reflected expectations for the Biden administration immediately after its inauguration.

Discussions also covered "consumption patterns for a sustainable future" and "resilient public health systems." Young people tackling plastic pollution participated in the meeting, sharing calls to action and innovative solutions with corporate leaders.

Furthermore, it was discussed that accelerating efforts by businesses, governments, investors, and individuals is essential as a challenge toward net-zero emissions (effectively zero greenhouse gas emissions).

In the digital realm, remarks by Google CEO Sundar Pichai drew significant attention.

Regarding balancing freedom of speech and safety on the internet, he emphasized that while the freedom of platforms like video sites should be protected, society needs agreed-upon boundaries. He stressed that while corporate responses vary, governments must provide clear guidelines.

He also predicted that "quantum cloud" services, offering access to quantum computers with overwhelming processing power, will become available within the next 3 to 5 years. He argued that an international framework, similar to the Paris Agreement on climate change, must be urgently established to address ethical issues such as discrimination caused by quantum computers and artificial intelligence.

Circular economy pilot projects are also accelerating

The "circular economy," a concept discussed for several years, is also gaining momentum.

Following discussions at the Davos Agenda, the WEF announced on February 8th that it will establish hubs for circular innovation in Mexico City, Brussels, Turin, and Bangkok.

Led by the WEF's Global Shapers Community—a community of young people in their 20s—this initiative aims to realize grassroots approaches toward a circular society by leveraging young change-makers.

Over 40 cities applied to host these hubs, with four selected. Achieving the UN Sustainable Development Goals (SDGs) by 2030 requires new approaches to current goods and services, as well as future innovation. By considering both local and global perspectives, the initiative seeks to advance progress toward a circular future.

The circular economy is led by the Dutch government, major consulting firms, and the Ellen MacArthur Foundation, each setting their own goals and principles. However, for municipalities and companies to adopt it, they must discern how to incorporate their respective strengths.

Revising economic structures is now unavoidable. We will continue to monitor the progress of this pilot project initiated by the WEF.

ESG momentum continues to accelerate. Initiatives toward "Stakeholder Capitalism Metrics"

Corporate ESG initiatives are also accelerating further.

Aligned with the Davos Agenda, the WEF and 61 participating business leaders announced their commitment to reporting based on the newly created "Stakeholder Capitalism Metrics."

This framework provides universal, comparable disclosure items that companies can report on regardless of industry or region, centered around four pillars: "People," "Planet," "Prosperity," and "Governance."

A united voice is also growing in the field of non-financial reporting. Business leaders have expressed a strong commitment to enhancing their ability to assess sustainability, improving decision-making, and ensuring transparency and accountability.

Specifically, this involves identifying metrics highly relevant to their own operations and more appropriate approaches, and reflecting these in reporting to investors and other stakeholders (such as annual reports, sustainability reports, and proxy materials).

Business leaders feel ESG will become more important than ever for all companies. This clearly reflects the intent of major global corporations to integrate sustainability into their core strategy, business operations, and corporate disclosures.

Bank of America CEO and Chairman Moynihan stated:

"We must deliver returns to shareholders while also contributing to solving societal challenges. This is the practice of stakeholder capitalism. With common metrics, all stakeholders can measure progress and direct the resources mobilized under capitalism—from companies, investors, and others—to where they can make the greatest impact."

stated.

Alan Jope, CEO of Unilever, a company noted for its sustainability efforts, added:

"The challenges facing the world are runaway climate change, environmental degradation, and social inequality. Annual reports and financial statements may not be the first mechanisms that come to mind for driving transformation, but mandating standardized non-financial reporting is essential to creating a new capitalism that tackles these problems."

stated.

The "Davos Agenda 2021" continued to emphasize the "need for reform" from a global perspective, as in recent years. However, many sessions featured panelists urgently conveying the "need to implement reform." It is palpable that we are at a historic turning point for society and the international order.

The "Global Risks Report," released just before the annual January meeting, continued to identify climate change as a major risk. It further pointed out that over the next two years, the spread of the novel coronavirus will pose a significant risk, threatening people's lives and potentially widening disparities in healthcare, income, and digital technology.

It further emphasized that risks must be viewed not only in the short term but also over the medium to long term. It warned that within 3 to 5 years, economic risks like asset bubble collapses and debt crises could emerge, potentially leading to geopolitical risks such as state collapse within 5 to 10 years.

The circular economy has also entered a phase of transition from discussion to implementation, making it crucial to involve frontline operations in driving its progress. The same applies to ESG; how stakeholders maintain their connection with society is vital. I keenly felt this is an era where "communication" is paramount in every aspect.