Photo: Bloomberg Photo By Jason Alden.
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There’s always been a whiff of hypocrisy surrounding the World Economic Forum’s annual gathering in Davos, Switzerland, where the global elite congregates in a ritzy ski village to debate topics such as hunger and global warming, and basically tell the world how to manage itself better. In a world blighted by a pandemic, the event risks looking completely inappropriate.
The organization celebrated its 50th anniversary in January, with an attendance list featuring 2,000 guests representing about 100 countries. Among them were at least 119 billionaires, according to calculations by my Bloomberg News colleague Tom Metcalf. Moreover, while the gender imbalance has improved in recent years, more than three-quarters of the attendees were male which is, frankly, still pathetic. Davos Man looks increasingly anachronistic.
Those optics have raised misgivings for one of the Alpine gathering’s regular attendees. “When people are struggling and unemployment is soaring, the very idea of a global elite meeting in a Swiss ski resort is divisive at a time when we need unity of purpose,” Standard Life Aberdeen Chief Executive Officer Keith Skeoch told the Daily Mail newspaper last week.
So he decided to pull his company out of Davos. “It is very apparent that we are heading into a significant global recession that will create real hardship in our communities,” Skeoch said in a memo to staff last week. The 3 million pounds ($3.7 million) that would have been spent on the conference, including hosting a whisky bar where a traditional Scottish bagpiper would serenade guests, will instead be donated to “community projects” in the regions where Standard Life Aberdeen operates.
The nature of such shindigs means Davos is often caught napping, missing the breaking news that should dominate its agenda. It reflects a basic flaw in human nature: We’re programmed to look for the next banana, and pretty terrible at long-term planning.
So when asked about the biggest risks facing the world, respondents to the WEF’s 2020 survey rated extreme weather events, the failure of climate-change mitigation, major natural disasters, loss of biodiversity and human-triggered environmental damage highest. It was the first time climate concerns had dominated the list in the survey’s 14 years, reflecting the prevailing news agenda in the months before the conference.
Chronic diseases haven’t made the top 10 of most likely outcomes since 2010, after being rated the second most-probable risk in 2007. Pandemics haven’t featured since ranking as the fourth and fifth highest-impact dangers in 2007 and 2008, respectively.
While the world was aware that a virus was spreading outside of China in January, the danger it posed seemed minimal, with fewer than 30 deaths reported by the time delegates gathered. The looming epidemic did make a brief Davos appearance. In a Bloomberg Television interview, Thomas Buberl, the CEO of French insurer Axa, said “new viruses will pop up” because of mankind’s encroachment into more regions of the world. But Pascal Soriot at drugmaker AstraZeneca said that while the virus “must be taken seriously,” his personal opinion was that global warming was a much bigger threat.
Adapting Davos to respect the strictures of social distancing may prove impossible when the whole point is to rub shoulders with influential people from the globe’s four corners. If the show does go on, you could argue that companies would have a fiduciary duty to keep their senior managers away: I suspect there’s not a single insurance company that would pay out on a Key Person Protection policy if a CEO caught the new coronavirus, or even covid-20, at a Davos breakfast or sipping cocktails at the Piano Bar.
The potential hazards of attending the WEF’s conclave have occurred to at least one member of the financial aristocracy. “I had this nightmare that somehow in Davos, all of us who went there got it, and then we all left and spread it,” JPMorgan Chase CEO Jamie Dimon said in February. “The only good news from that is that it might have just killed the elite.”
There’s also the growing awareness of the climate crisis as a real and present danger to act on. The pandemic has already had a beneficial, if potentially short-lived, effect on the environment, with lockdowns around the world curbing pollution by closing factories and slashing travel. Jellyfish have been spotted floating in the canals of Venice (although, sadly, not dolphins), and whales are enjoying swimming in quieter oceans without the low-frequency noise generated by ships.
With the average Davos attendee generating about 2,000 pounds of carbon dioxide, the bulk of which is emitted by the plane flights there and back, a trip to the conference looks less and less justifiable. If the organizers want to get ahead of the curve by announcing something, they should declare that the 2021 gathering will be held via Zoom. For once, Davos would truly reflect the zeitgeist.
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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Gilbert is a Bloomberg Opinion columnist covering asset management.