Greetings, delegates and Davos-watchers!
You’ve reached the end of another World Economic Forum annual meeting, and the final installment of our 2022 Need to Know: Davos newsletter. If you’ll miss us, feel free to stay in touch and be sure to sign up for the Quartz Daily Brief, our year-round newsletter for the globally curious, sent to your inbox each morning.
In any case, don’t fret. January and the 2023 WEF annual meeting are only eight months away. ❄️❄️❄️
🧳 The big takeaway
For years, the WEF presented itself as the epitome of an idea: that if the world’s leaders would come together to talk, they’d start solving the problems of their societies. This year, two important leaders and their delegations were missing. And yet the WEF spent so much time talking about Russia and China that it seemed to embody a new idea: that of a splintering world, rather than a cohering one.
In panel after panel, speakers wondered if globalization was changing, or even regressing. Several factors—the Ukraine war, stressed supply chains, China’s inward focus, covid, energy risks—are giving rise to new blocs of cooperation, in which nations look first to ideologically compatible nations to meet their own needs. The harmonious global market—if it ever truly existed—is rife with discord. Kristalina Georgieva, the head of the IMF, said she was scared “that we’re sleepwalking after the hot war into another cold war.”
Not everyone shares that extreme anxiety. The economist Adam Tooze, calling the notion of the end of globalization “B.S.,” said only the naïve or the apocalyptic will think the genie can be put back into its bottle. But most people agreed that something fundamental is underway: a regionalization of economic networks, perhaps, or a reorganization of economic leverage. In the short term, it may result in rising food and energy prices, military tensions, or higher costs of products we’ve assumed can be manufactured for cheap in distant, superficially friendly markets.
One thing’s for sure. If Russian and Chinese leaders aren’t at Davos next year, the “World” in “World Economic Forum” will sound increasingly hollow.
🎓 Do you speak Davos?
Perhaps you knew exactly what Satya Nadella meant when he talked about urging the cybersecurity teams at Microsoft to take a “shift-left” approach. If so, you’re bound to ace our brand new Davos jargon quiz, based on the latest, most opaque terminology heard this week at WEF. Take the quiz here.
🛢️ ➡️ 🌱 Energy transition: Too slow or too fast?
Joe Manchin, the US senator who single-handedly blocked the most potentially transformative and urgently needed pieces of the Biden administration’s climate agenda, sat in the hot seat at Davos this week and…actually sounded reasonable?
On a panel with fellow legislators, the West Virginia Democrat argued the US couldn’t afford to abandon fossil fuel, because it doesn’t yet produce enough green energy to replace it. “We have the ability to go down two paths, [including] a path of investing in tech that’s going to be needed for the transition that will happen,” Manchin said. “But eliminating one for the other one? That’s the model Germany followed and it was not successful. We shouldn’t repeat that.”
But if Germany moved away from nuclear energy too soon, and ended up reliant on Russian gas as a result, the US, it was argued at Davos by green energy advocates, is not moving away from fossil fuels fast enough. “We lost four years,” John Kerry, the US special presidential envoy for climate, lamented at a lunch hosted by Salesforce’s Marc Benioff, referring to the inaction of the Trump administration. “If we don’t do enough between 2022 and 2030, you can’t get to net zero in 2050.”
Kerry’s prescription? “We have to deploy renewables six times faster than we are now. We have to cut coal five times faster than we are now. We have to [adopt] electric vehicles 22 times faster than we are now.”
This sense of urgency was widespread at WEF, whereas in 2020, many of the climate discussions here were still about convincing companies and governments to make net-zero pledges and disclose carbon footprints. “It hadn’t come to business’s doorstep as it has now,” said Nili Gilbert, vice chairwoman of Carbon Direct, which advises clients like Microsoft on carbon removal.
“We need a whole economy transition, at the scale of the industrial revolution and the pace of the digital revolution,” said Paul Simpson, the outgoing CEO of CDP, the nonprofit carbon disclosure platform.
“The great news is we know how to do this,” said Gilbert. “The terrible news is it’s expensive.”
Indeed, money needs to move much faster into decarbonizing the hardest-to-clean-up industries, from aviation to steel, while also supporting new, green technology. For some realist climate investors that may mean investing more in industrials, increasing the carbon footprint of their portfolios in the short term. Sarah Keohane Williamson, CEO of Focusing Capital on the Long Term, suggests the tradeoff is worth it. “Do you want a green portfolio or a green planet?” she asked.
🌏 The other Davos
Every summer since 1997, St. Petersburg has hosted an International Economic Forum—the “Russian Davos,” as some refer to it. Last June, 13,500 participants from 141 countries participated, including executives from BMW, GlaxoSmithKline, UNICEF, Renault, and Nokia. But who’d be bold enough to go this year, for a forum whose patron, the Russian president, is under sanctions for invading Ukraine?
Interest has been low, the governor of St. Petersburg admitted in April. On the sidelines, Russia has scheduled no “business dialogues” with any European country except Belarus. The agenda, such as it is, doesn’t hold even a whisper of Ukraine (although one session’s cryptic subtitle is “Temporary Disorder or Games without Rules”). If critics accuse the OG Davos of living in its own bubble, the Russian Davos inhabits another bubble altogether.
💡The smallest change
Davos is a place to discuss big ideas about big (some might say intractable) problems. But sometimes even a tiny measure can have a great effect. All week, your Quartz correspondents asked business executives up and down the Promenade: What is the smallest change you’ve made as a leader that has yielded the biggest results?
“We added wellness days.” —Christy Pambianchi, chief people officer, Intel. She says the granting of two paid wellness days per year benefits employees who need the time off and will have “a lasting benefit” for the company “because it’s making it safer to talk about wellness.”
“Talking about my personal life. People really appreciated that, so I kept doing it. I think they feel more personally connected to the company.” —Jeff Maggioncalda, CEO, Coursera
“We shifted to 25-minute meetings versus 30 minutes.” —Deeptha Khanna, head of consumer health, Philips.
“Transparency.”—Peggy Johnson, Magic Leap CEO. Johnson, who joined the augmented-reality company in 2020, said she holds an all-hands meeting every two weeks, where employees are encouraged to ask questions. “It’s quite a change from Magic Leap 1.0, when it was quite a secretive company,” Johnson said.
“Being truly intentional about bringing diverse talent into the organization.”—Paul Knopp, chair and CEO, KPMG US. Meeting the diversity, equity, and inclusion goals that the firm set for 2025 “doesn’t require new tools or technology,” he said. “It didn’t require huge investments of capital. It just requires people to take action, to create a more inclusive environment.”
The circus is leaving town
It takes a lot of infrastructure to make a WEF annual meeting run smoothly. Dismantling it is a big task.
🤓 Thanks for reading Quartz!
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Farewell, Davos. See you again soon.