During the past few weeks, a group of colleagues from the World Economic Forum visited Pakistan, including areas which have been devastated by floods and landslides. The experience brought home to us the true gravity of the situation.
Pakistan is already affected by serious challenges including energy shortages, poor water supply, and widespread poverty in addition to constant terror threats and a challenging political situation. Torrential rains have now caused the worst floods in 80 years which many of you may have read about or seen in the news over the past month.
The data is staggering. Some 20 million people are affected by the floods and by some estimates one fourth of the land is under water. Many lives have been lost already, many remain in acute danger of disease and malnutrition and it will take months, if not years, to rebuild the infrastructure that has been destroyed.
The Forum has appealed to its staff to collect funds that will be donated to a trusted and reputable local organization such as the Edhi Foundation to ensure that our support reaches people most in need. Once this emergency relief phase is over, we also hope to be involved in longer-term rehabilitation efforts with our members and partners and by supporting local social entrepreneurs such as the Kashf Foundation.
Dealing with the aftermath of the Haiti earthquake is a daunting task, but one which has opened up new opportunities for partnerships between the public and private sectors. A report by the World Economic Forum shows how new, creative thinking was put into practice by companies and NGOs to try to help Haiti recover from this devastating disaster. In “Innovations in Corporate Global Citizenship: Responding to the Haiti Earthquake”, private sector organisations are encouraged to continue contributing expertise, personnel and equipment, as well as building more lasting relationships with the NGOs on the ground. The report includes case studies of successful partnerships and addresses gaps in the coordination where further involvement could make a big difference.
Selected case studies:
The World Food Programme’s (WFP) partnership with US-based game developer Zynga: Two days following the quake, Zynga launched campaigns on Facebook that generated US$ 1.5 million within five days and reached more than 300,000 users. At the end of the campaign, Zynga gave players of its FarmVille game - which itself raised US$ 1 million - a virtual “high energy biscuit” that made avatars work twice as fast in the game.
The joint initiative of Agility, TNT and UPS, called the Logistics Emergency Teams (LET), supports the United Nations’ Logistics Cluster which is led by the WFP. While none of the LET companies maintained a significant business presence in Haiti, UPS’s operations in the region were most established. In conjunction with LET; UPS and TNT sent personnel to Haiti to coordinate on-the-ground operations in Santo Domingo, oversee warehouse operations and improve efficiency of supply transfer.
World Vision and automated food distribution in Haiti: World Vision, a Christian humanitarian organization founded in 1950, committed several years ago to improving the efficiency of its food-aid provision. In 2006, it began working with Canadian technology firm FieldWorker to reduce cumbersome paperwork processes for logging and processing food distribution. After several months of developing software and vetting systems internally, it launched a one-year pilot programme to test mobile technology involving hand-held scanners and bar-coded identification cards. This system combined hardware from Intermec, a US-based company specializing in mobile computing systems, and FieldWorker’s software, which World Vision licensed at a reduced rate. The result was a system that drew on best practices from the private sector and was customized to meet the needs of humanitarian agencies: food aid recipients were issued bar-coded identification cards, and aid workers could scan these cards with hand-held, wireless computers. The device would automatically calculate rations and log food distribution at the particular site.
Fair mineral development in Mongolia was the issue the World Economic Forum drew almost 100 business, government and civil society leaders together in June to tackle. The Mongolian Presidency, which has just finalized an agreement to start operations on one of the world's richest iron ore and copper deposits which is expected to contribute significantly to its GDP, co-hosted the roundtable in Ulaanbaatar.
The president of Mongolia, Elbegdorj Tsakhia, said in his opening address that the roundtable was especially timely as his country strives to utilize its rich mineral resources in a sustainable manner to ensure a better future for its citizens.
In addition to government and parliamentary representatives from Mongolia, the meeting included multilateral and bilateral agencies such as the World Bank, International Finance Corporation, International Council on Mining and Metals, representatives from the private sector as well as international and local non-governmental organizations such as the Extractive Industries Transparency Initiative, Open Society Forum, and Transparency International.
It was the first multi-stakeholder discussion in the country which focused on: - Who the key participants and stakeholders are when it comes to negotiating mineral development agreements - Transparency issues in the negotiation process - Who has the decision-making authority in the licensing negotiation process - Other issues related to land tenure, royalties and taxes, distribution of revenues, work force and community development, reopening and renegotiation of mineral agreements and dispute resolution mechanisms.
This roundtable forms part of an overall dialogue through the World Economic Forum on fair mineral development and will be incorporated into research on this topic in mineral-rich emerging economies. Visit the Mining & Metals Industry Partnership web page to learn more.
The World Economic Forum's Partnering Against Corruption Initiative in collaboration with the International Chamber of Commerce, Transparency International and the United Nations Global Compact, has launched an expanded version of the landmark RESIST corruption toolkit. RESIST - Resisting Extortions and Solicitations in International Transactions - was unveiled at the UN Global Leaders Summit in New York City.
RESIST is the only anti-bribery toolkit developed by companies for companies and sponsored by four leading global anti-corruption initiatives.
The training tool enables company employees to respond to solicitations and extortions efficiently and ethically, while also helping companies reduce the probability of such demands.
More than 20 companies and organizations contributed to the design of RESIST, composed of 22 real-life scenarios. The expanded edition includes 15 new scenarios which companies could be faced with in their business operations. It includes advice on what to do when a bribe is demanded for the release of perishable goods in customs, to ways of dealing with a tax inspector requesting a kickback against a tax discharge.
The four global, anti-corruption initiatives launching the tool have collaborated on a number of projects since 2005 in their fight against corruption on the supply side of the issue. The initiatives have been developing and disseminating anti-corruption tools and advocacy, acknowledging that business is both part of the problem and the solution. RESIST is the latest in this series of close collaborations. Other collaboration projects include the business case for fighting corruption and a CEO letter to the United Nations Secretary General.
One of the most high-profile and sought-after session at the Annual Meeting was the session on the growing influence of social networks, a workshop where representatives from all main social networks were present.
The discussion, moderated by Loïc Le Meur, Founder of Seesmic included among others Gina Bianchini, CEO, Ning, Reid Hoffman, Founder, LinkedIn, Owen Van Natta, CEO, MySpace.com and Evan Williams, CEO, Twitter, Don Tapscott, Ngenera and George Colony, CEO, Forrester Research, Randi Zuckerberg, Marketing Director, Facebook, Steve Grove, Head of News and Politics, YouTube, Tim Berners-Lee, Director, World Wide Web Consortium, and Michael Arrington, Founder, TechCrunch.
Randi Zuckerberg from Facebook ran a quick poll receiving feedback from over 6000 people on Facebook in only two minutes. Steve Grove from demonstrated YouTube Moderator and you can read the responses here.
Here is the video of the 2-hour session, highlights of the discussions below.
The World Economic Forum's Global Risks 2010 report focuses attention on the legacy of the financial crisis. The basic message is that the interconnected risks might be largely the same as last year - fiscal crises and the threat of protracted unemployment, underinvestment in infrastructure - but that we are now living in a much more vulnerable environment where many countries may not have the funds left to prepare themselves for the complext risks ahead. Transnational crime and corruption, biodiversity loss and cyber-vulnerability have also become more apparent risks. In the above video Sheana Tambourgi, the head of the Forum's Global Risk Network outlines how timely the report is and how its findings will be fed into Davos
The following opinion piece by Klaus Schwab, Executive Chairman of the World Economic Forum was published in The Guardian. A German version appeared in Süddeutsche Zeitung and French versions in Le Monde and in Le Temps.
Bonuses are a symbol of business's bigger problem - an eroded sense of duty to the wider community
Given the uncertainty of the recovery and fears about the social impact of the economic crisis, it is little wonder that debate about corporate bonuses has crept back on to the agenda. You wonder whether managers have learned from the excesses that have to a large extent caused the crisis.
Nevertheless, this discussion is superficial, as it doesn't consider the essential point: the role that companies, including banks, play in society, and the role of executives within those companies. The bonus discussion is actually just a symbol of a much deeper transformation that has taken place in the business world. Let me outline this transformation, as it has severe social implications.
The World Economic Forum's Dominic Waughray, Senior Director, Head of Environmental Initiatives is at the United Nations Climate Change Conference in Copenhagen and blogs his impressions
The past couple of days have been extremely difficult for those queuing to get into the Bella Centre. The weather has been extremely harsh; there have been security lock downs all around the congress centre and a heavy police presence has raised everyone’s blood pressure. Admissions for observers became heavily restricted and dependant on the white badge that only your head of delegation could give you. Yet as a head of delegation I couldn’t get into the Bella Centre to collect my white badges that allowed us to get in. Why? Well, you guessed it – because I didn’t have a white badge.
A perfect catch 22. You need to get in to collect your white badges to get your delegation in. But if you don’t have a white badge, you can’t get in to get your white badges. Luckily one of us, Tom, had got himself a white badge courtesy of a Catholic delegation he had also registered with. Our missionary was duly dispatched into the mêlée to sort us out, while we went back to the nearby Crowne Plaza to warm up. Couple of hours later, not only were we all inside, but we had also became extremely popular as we had an envelope full of precious white badges.
Many people were less fortunate and queued for hours in the cold only to be disappointed. It’s hardly a surprise that the angrier of these tried to overpower the fence, causing the police to respond with force. These are the Bella Centre protests that have been on the news. Yet everyone who is registered as an official observer does have the right to be able to access the centre.
Moving inside the Congress Centre and, despite the suspension of proceedings for a while which was initiated by some developing countries, the latest text from the Long Term Group on Consultative Action has arrived. This is the main text (and its addendums of course) that the ministerial teams are now grappling with.
You will see that many brackets still lie around the key issues (brackets means still to be agreed upon); especially on the rather fundamental issue of targets: see p.4 section 2 which has brackets around temperature targets; reduction targets for developed and for developing countries.
So, a lot still needs to be done. But much of it is now political rather than technical, and requires leadership rather than detailed negotiation. Clear and strong targets are an essential part of any robust outcome from Copenhagen, so we must remain hopeful some of those brackets do disappear and more ambitious numbers replace them. As Yvo de Boer said in tonight’s press conference “the next 24 hours really are crucial”.
Other interesting points of substance
The rise of the climate and trade issue. Note the brackets on p.4 section 5 in the text showing the need to elaborate something on trade measures: this could prove to be a much talked about entry, as it is my understanding some major developing countries would like an explicit reference in the agreement to forbid any climate related border tax adjustments, a mechanism of course which can be found currently asleep in the Waxman Markey bill.
As we both warmed ourselves up in the Crowne Plaza lobby, James Bacchus explained to me how in his view the trade and climate issue is a major policy architecture problem fast approaching and of great pertience to many multinational and large industrial companies. (Jim is a former congressman and former chairman of WTO). We discussed how complaints to the World Trade Organisation could be triggered not only by the deployment of border tax adjustments, but also on countries citing other countries giving unfair domestic subsidies to particular industries (for example, either to help fossil fuel/high emitter incumbents cope with tighter GHG policies, or indeed to help them develop new low emission investment technologies).
One can quickly see how a logjam of cases for the WTO to make judgements on could emerge; a tit-for-tat logjam that would soon snarl up market-based progress to an international low carbon economy. And that’s not mentioning how this new workstream could deflect the time and attention of WTO officials away from fixing Doha. Given that a range of other think tanks, industry bodies and companies have also raised this topic with us, the trade and climate issue may be something we pursue more substantively into 2010. We will certainly be having a session at the 2010 Annual Meeting in Davos-Klosters on it and I would welcome any feedback on how you think we might best go about looking at this issue.
Finance. Note also the section on finance in the draft tect (p.8 especially section 37) which refers to the role of private and innovative sources of finance. This is interesting. It reflects to some extent a recognition of much of the work that has gone on over the last several months within the Forum Task Force, UNEP FI, the International Investor Group on Climate Change and several others organisations and initiatives. These groups have consistently promoted the fact that the public finance on offer will simply not be enough to solve the climate finance challenge and private investment will need to be attracted into low carbon infrastructure investments at a dimensionally different scale, in developing countries in particular.
The kind of text in the draft agreement (un-bracketed so no one seems to disagree with it) is exciting: it could be a gateway that enables the Forum, for example, to host a substantive private-public platform into 2010 to bring pension funds, fund managers and development banks etc together to develop new low carbon investment mechanisms for developing countries. This was a core recommendation of the Low Carbon Economy Task Force (download the full report, section 3).
The draft text as it stands enables a clear connect between the UNFCCC framework and such innovative public private work in the investor space. 2010 could see an interesting confluence between the Forum’s work on green investing, energy poverty, financing for development and low carbon growth; a connection that could trigger dimensionally larger investment platforms for developing countries. All of this potentially from a small bullet point in a draft text...
Forests and Land Use. Note that Section 27, p7 (again, with no brackets) introduces the forest and land use dimension, in the form of REDD+ (policy approaches and positive incentives on issues relating to Reducing Emissions from deforestation and forest Degradation in Developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries)
This is an important issue, as much of the abatement potential to 2020 can be found in the avoided deforestation and land use change space. If the REDD+ section remains, 2010 will require a push of public finance to get forested nations “ready for REDD+”. To ensure that these policies and the projects they inspire are able to attract in as much private finance as possible (as the REDD+ space cannot be sustained into perpetuity by public finance alone), new public-private initiatives will be needed that can work with forested nation governments to develop smart polices and a high volume of bankable project deal flow. Done right and the financial flows could be very large. Done wrong and it will be a development, business and abatement opportunity missed.
This is why on Monday evening the World Economic Forum hosted a major dinner in Copenhagen on avoided deforestation and land use change. Reacting to the potentially huge economic opportunity we think REDD+ offers, we are developing a substantive partnership in this area, in order to provide a platform of very practical policy and project development to help a few key forested nations get REDD+ right. We have started to build a partnership with parliamentarians and legislators from forested nations through GLOBE, leading scientists through the Terrestrial Carbon Group and NGOs through WWF as well as with a range of our Industry Partners and agenda council experts.
Currently Shell, Zurich Financial Services and PWC are working with us to help build the partnership, with about 10 or so Forum partner companies behind that. We believe this will be a vehicle attractive to many from the financial services, mining and land use arena and also to companies less well represented at the Forum such as paper and pulp manufacturers.
Their is also interest at the project level from our Young Global Leaders community too. The Minister of Environment from DRC and Governor Eduardo Bragas of the Amazonas Region were among the guests at dinner, which also included the renowned scientist Tom Lovejoy (who introduced the term biological diversity to the scientific community in 1980). Pavan Sukhdev who is the chair of the Forum’s ecosystem and biodiversity global agenda council was also present. Special thanks should go to Shruti Mehrotra an Associate at the Forum, who pulled the event together, along with Tom Watson of the Forum and colleagues from GLOBE and the Terrestrial Carbon Group.
I wanted to talk also about another excellent event on public-private finance, but I shall leave that until tomorrow.
As the Bella Centre is locked down now, I actually returned home today Geneva. So I will be blogging just three more times: tomorrow and Friday on what I am hearing from our sources still there in Copenhagen and on the inside. Saturday, we expect the final text to be posted in the early hours of Saturday morning so by Saturday evening we hope to have gained a considered perspective on it, from those in the know, which I will post. That will be the final COP 15 posting.
Industries with private equity activity grow more rapidly (as measured by total production, value added and employment) and experience no more volatility in the face of industry cycles than other industries. In some cases, industries with private equity activity are less volatile, particularly in terms of employment.
The working papers also find that modest levels of direct and indirect government venture capital support (in conjunction with private funding) can help the performance of young enterprises. Public support seems most effective when provided at a national or international organization level.
The research project included an international team of noted academics led by Josh Lerner, Jacob H. Schiff Professor of Investment Banking at Harvard Business School.
Join the discussion on YouTube about the global challenges requiring new approaches for real solutions. Watch and listen to what leaders from business, politics, civil society and academia have to say about issues like poverty, gender inequality and climate change, and their innovative solutions like using technology, energy and new education schemes to solve them.
Over 700 leaders from 90 countries are currently in Dubai for the World Economic Forum's Summit on the Global Agenda 2009. At the end of their three day brainstorming, they will present their breakthrough ideas on how to work together to address the world's interconnected problems.
