Thousands of political and business leaders, joined by experts from academia, media and civic society gathered in record numbers in Davos for the World Economic Forum’s 53rd Annual Meeting this week, with chief economists predicting a global recession in the year ahead.
The Chief Economists Outlook published on Monday at the meeting — the first in-person winter gathering since the Covid-19 pandemic — said businesses will continue to grapple with geopolitical tensions, further monetary tightening, inflationary pressures on energy and food, and cost cuts leading to likely layoffs.
The tough macro-economic landscape is likely to pose challenges to the global community’s efforts to progress the United Nations’ Sustainable Development Goals (SDGs), said observers.
Saadia Zahidi, managing director at the World Economic Forum, called on leaders to “look beyond today’s crises to invest in food and energy innovation, education and skills development, and in job-creating, high-potential markets of tomorrow. There is no time to lose.”
“With two-thirds of chief economists expecting a worldwide recession in 2023, the global economy is in a precarious position. The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable,” she added.
Amid the backdrop of what WEF calls a “polycrisis” world, a new initiative called Giving to Amplify Earth Action (GAEA) – a play on the word ‘gaia’, which means earth – was launched by the Switzerland-headquartered organisation.
WEF says the global initiative modelled on new and existing public, private and philanthropic partnerships (PPPPs) will help unlock the US$3 trillion of financing needed each year to reach net zero emissions, reverse nature loss and restore biodiversity by 2050. It did not specify a funding target.
The initiative is supported by more than 45 major philanthropic, public and private sector partners including the Bezos Earth Fund, BMW Foundation, Children’s Investment Fund Foundation, the Clean Air Fund, Rockefeller Foundation, United Nations Foundation, and the Philanthropy Asia Alliance by Temasek Trust.
Philanthropic funding amounted to US$810 billion in 2021, but just 2 per cent went towards the climate, noted WEF. Speaking at the meeting, Neo Gim Huay, managing director of WEF’s Centre for Nature and Climate, said philanthropy was “the third P of the public-private construct to help scale and catalyse climate and nature action”.
The recent agreement reached at the UN Biodiversity Conference (COP15) in Montreal to conserve 30 per cent of all land and sea, known as the 30x30 pact, was a welcome target but it is beset by financing challenges. Current funding is slow and inadequate, while philanthropic giving can address this with its patient, long-term nature, said panelists at the launch, which included John Kerry, the United States’ Special Presidential Envoy for Climate.
Andrew Steer, president and chief executive of the Bezos Earth Fund, a US$10 billion climate fund launched by Amazon founder Jeff Bezos in 2020, noted in a press briefing on Tuesday that “most philanthropy has not been very leveraged, and it needs to be in several ways”.
For example, the fund recently announced US$5 billion to support the 30x30 biodiversity target and alongside government money and private money, “the whole adds up to more than the sum of the parts and that’s exactly what we need to do to bring the different pieces of the jigsaw puzzle together… help design policies, help prepare pipelines of projects and can help de-risk these projects,” said Steer.
McKinsey Sustainability has been announced as a knowledge partner, and will work with the founding partners of GAEA to identify and target climate and nature solutions, pilot and refine funding models and to scale up and replicate successful approaches, said WEF.
For example, the Clean Cooling Collaborative, founded in 2016 with an initial $10 million of philanthropic funding, mobilized more than $600 million in public and private finance to improve equitable access to low-carbon cooling and support 4.2 gigatons of avoided carbon emissions by 2050.
Another example cited was the Government of the Seychelles leveraging philanthropic funding, public loan guarantees and private investment to raise a US$15 million blue bond and convert US$22 million of government debt into conservation funding to protect 13 marine areas, covering an area larger than Germany.
Philanthropy in Asia
Asia is one of the richest places on earth for biodiversity but is also facing the highest rates of a habitat loss, driven by rapid urbanisation and population growth. A recent Oxford study pointed out that under current trends, the outlook for achieving the global 30x30 target is bleak, with Asia set to miss this by an even greater margin.
Similarly, as a region it suffers some of the worst effects of climate change and faces myriad challenges from energy development to poverty allevitation — yet, it is lagging behind the philanthropic efforts of others such as the European Union and the United States in these areas.
Newly-minted chief executive of Temasek Trust, Desmond Kuek, noted that “there is a lot of catching up to do in Asia, but there is a lot of optimism and interest in moving towards sustainability, impact and philanthropy.”
“There is a huge inter-generational transfer of wealth in the order of trillions of dollars and the next generation of the wealthy are [thinking about] leaving a legacy for the future,” he told Eco-Business, adding that philanthropists are moving away from “chequebook charity to the kind of philanthropy that is scalable, systemic and structural.”
“We’re seeing important philanthropic shifts in Asia and there is a keen sense that there is a need for the public, private and philanthropic sector to come together in a much more powerful way to drive catalytic action for climate,” he added.
Lim Seok Hui, chief executive of the Philanthropy Asia Alliance, added that the alliance will “continue to amplify its impact by supporting initiatives such as GAEA to pool our collective resources and expertise, and translate ideas into action”.
“GAEA’s first Asia-focused key deliverable that will be launched later this year by PAA in partnership with the World Economic Forum, is a climate philanthropy report on multi-stakeholder partnerships as a force to combat complex climate challenges,” she added.
This story is part of Eco-Business’ coverage of the World Economic Forum Annual Meeting.
