Stakeholder Capitalism. Klaus Schwab
and water stress and approximately half of our climate change impacts,” the organization warned.
These trends coincided with one of increased pollution of at least three sorts: water, air, and soil.
Take first the issue of water. UN Water, the agency coordinating the United Nations work on water and sanitation, estimated that globally 2 billion people live in countries experiencing high water stress,71 often due to climate change. But even when water is available, it is often heavily polluted. Globally, the agency said,72 “it is likely that over 80% of wastewater is released to the environment without adequate treatment,” with pollution often happening because of “intensive agriculture, industrial production, mining and untreated urban runoff and wastewater.” It threatens the access of clean water everywhere from cities to rural areas and poses a great health risk.
Moreover, there is the issue of plastics, whose impact will be felt most dramatically in the coming decades, as the plastic that is currently accumulating in the world's oceans may affect life on land in a myriad of ways. Microplastics have become ubiquitous in the world's water, in part because they take decades to decompose: by current measures, it is estimated we could end up with more plastic than fish in our oceans by 2050.73 The most famous example in popular imagination is the “Great Pacific Garbage Patch” consisting largely of the debris of microplastics in the Pacific Ocean. But the issue is a global one, affecting all of the world's bodies of water.
Second, almost two-thirds of the world's cities also exceed WHO guidelines on air pollution, according to Greenpeace.74 Many of the large metropoles of Asia are so polluted it is unhealthy even to walk outside,75 as many who live or have been there will be able to attest. And third, according to the Food and Agricultural Organization of the UN (FAO),76 soil pollution is a hidden reality all over the world and a direct threat to human health.
This rapid exploitation and pollution also started to wreak havoc on the world's natural ecosystems and threatened to make global warming spin out of control, with major consequences for people in regions hit hard by climatic change and for future generations. Other data also reveal the human impact on the environment.
The UN-sponsored Intergovernmental Platform on Biodiversity and Ecosystems Services (IPBES) concluded in a 2019 report that “nature is declining globally at rates unprecedented in human history,” with species already becoming extinct “at least tens to hundreds of times faster than the average over the past 10 million years.”77 Quoting the research, the Financial Times also wrote that “one million of Earth's estimated 8 million plant and animal species are at risk of extinction.”78
Another specialized UN agency, the Intergovernmental Panel on Climate Change (IPCC), issued a warning late 2018 that the current path of CO2 emissions would also lead to an unstoppable cycle of global warming—with major disruptions for life on earth—if major reductions weren't achieved by 2030. It said, “Pathways limiting global warming to 1.5°C with no or limited overshoot would require rapid and far-reaching transitions in energy, land, urban and infrastructure (including transport and buildings), and industrial systems.”79 But hopes for even that narrow path to a limited global warming of 1.5°C had all but evaporated two years later. The World Meteorological Organization, another UN-affiliated institution, in July 2020 said that a 1°C warming would already be a reality in the next five years (2020–2024) and believed there was a one in five chance that warming would already reach 1.5°C in that period.80
There is no one who hasn't experienced at least some of the realities of a changing climate. As I write this, the past two summers have once again been among the hottest on record.81 Even high in the Swiss Alpine town of Zermatt, where I go to walk in summer and where temperatures are usually quite moderate, global warming and extreme weather events are hitting home—literally. The Theodul Glacier is retreating further every year, and when I visited in the summer of 2019, the melting glacier caused flooding in the valley, even though not a drop of rain had fallen in days.82
Faced with these changes down the ages, people have responded with one simple act: they have started moving. Today, the UN Migration Agency IOM warns that “gradual and sudden environmental changes are already resulting in substantial population movements. The number of storms, droughts, and floods has increased threefold over the last 30 years with devastating effects on vulnerable communities, particularly in the developing world.”83 It expects that the total number of climate migrants alone will by 2050 be as great as the total number of international migrants in the world today, at 200 million people.84
Business leaders know environmental risks are rising, as they rank them ever-more prominently in the World Economic Forum's yearly Global Risks report. For the first time in 2020, it said, “Severe threats to our climate account for all of the Global Risks Report's top long-term risks.”85 It pointed to the risks associated with extreme weather events, failure of climate-change mitigation and adaptation, human-made environmental damage, major biodiversity losses, resulting in severely depleted resources, and major natural disasters.
We should not take these risks lightly like we did in the 1970s, especially as the next generation is already looking over our shoulder, wondering what legacy we plan to leave. That would be nothing short of a betrayal of future generations.
Indeed, the dangers posed by global warming have become a major worry for the next generation of youth these past few years, as they start to demand more urgent climate action. Inspired to a large degree by peers such as Swedish school student Greta Thunberg, hundreds of thousands of climate activists have been hitting the streets, giving speeches to whomever would listen and changing their own habits where possible. We understand their concerns and for this reason invited Greta Thunberg to speak at our Annual Meeting in 2019. Thunberg's foremost message was that “our house is on fire”86 and that we should act with an utmost sense of urgency.
We hope we will heed the next generation's call to create a more sustainable economic system with more urgency than in 1973. Since Aurelio Peccei's speech, decades have passed. Since then, we failed to act with sufficient results and have, in doing so, worsened the economic, health, and environmental outlook for future generations—and still left many people behind economically. It was Kuznets’ final curse. He had never suggested that our economic system was indefinitely sustainable.
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We did not listen to Simon Kuznets’ cautious warnings: he told us GDP was a poor measure for broad societal progress, as it was more geared toward measuring production capacity than any other signs of prosperity. He wasn't convinced that the declining income inequality during the 1950s would be a permanent feature but rather saw it as a temporary effect of the specific technological advances that favored inclusive growth at the time. And he never subscribed to the notion of any “Environmental Kuznets’ Curve,”