Friday, January 26
I always come to Davos with some trepidation about whether the event actually makes a difference. And I’m also concerned about the wear and tear that’s involved in such a punishing schedule! But this year was definitely worth it. There’s been some really positive engagement on the main issues and I leave feeling more positive than when I arrived. I’m still optimistic that a breakthrough can be reached on the Doha trade talks. There’s a growing consensus on the need for government and business to co-operate in tackling climate change. And as for this year’s theme at the World Economic Forum – ‘The Shifting Power Equation’ – there is a growing recognition that we now live in a multilateral world where the balance of power is in constant flux.
As head of one of the world’s biggest accounting networks, I take a particular interest in the related areas of regulation and competition. It is imperative that in this global environment we move to a principles-based approach to regulation, with equivalence of standards that will help to assure the public that capital markets can operate both efficiently and ethically. It may take time to achieve such harmonization, but the prize is worth having. Another theme that has emerged this week is how to embrace diversity and reap the rewards. I attended an excellent breakfast this morning on the subject, hosted by BT chief executive Ben Verwaayen and moderated by CNBC presenter Maria Bartiromo. Ultimately, this is about companies recruiting and attracting the brightest and best talent, whatever their culture or gender, and creating mixed teams.
It’s people, not structures that make the difference. For us at KPMG one of the ways we do this is by supporting sustainable communities around the world to enable our people to broaden their horizons, learn new skills, challenge their intellects and develop their character. This in turn increases their effectiveness, motivation and contribution. And it is a sign of the times that a key member of KPMG’s team at Davos this year is Michael Hastings, KPMG’s head of corporate citizenship, who gave a powerful keynote speech at our reception on Wednesday evening.
I’m off now to the British business leader’s lunch, which is always a pleasurable event. My only relaxation, though, comes later when I get to test drive a hydrogen-fuelled BMW. Given the way I drive, I really hope it doesn’t go too fast!
Then there’s more socialising before I leave Davos tomorrow and head back to reality on Monday. My only regret is that once again I’ve been unable to ski. I’m told the pistes are now in great shape thanks to the snow that has fallen steadily during the week. Oh well, you can’t have everything!
Thursday, January 25
Day Two of Davos and I’m still holding up, despite an excellent late-night dinner hosted by WEF founder Klaus Schwab and a 7.30 breakfast session this morning on sustainable development hosted by Infosys and chaired by the BBC’s John Humphrys.
For such an early start it turned out to be a very spirited discussion indeed with valuable contributions from Shell chairman Jeroen van der Veer, Nestle’s Peter Brabeck, and Infosys chief executive Nandan Nilekani. The lively debate centered around whether there is too much focus on carbon dioxide (CO2) and the degree to which it affects climate change – and what the role of business is.
However, there was consensus that climate change was one of the main issues facing us all; that there should be a partnership between government and business to tackle CO2 emissions; and that government must put some basic, workable frameworks in place.
But I still haven’t got to the bottom of emissions trading. In particular, I don’t know whether it leads to a real reduction in carbon levels - or just reallocates them!
Then it was on to a meeting of the Trans Atlantic Business Dialogue group, of which KPMG is a member. German chancellor Angela Merkel gave an extremely impressive presentation in English. And I’m delighted to say that in addition to being completely committed to making progress on the stalled Doha round of trade talks, she is also very clear about the need to break down trade barriers between Europe and the US.
As you know, Germany currently chairs both the European Union and the G8 group of leading industrialized countries. What a pity trade issues weren’t higher on the agenda of previous presidencies!
Chancellor Merkel’s views are very much in tune with the TABD’s mission to champion the removal of artificial trade barriers, oppose narrow economic nationalism and promote competition and choice.
There is so much at stake – some $3,000bn of trade between the US and Europe alone. If these barriers were eliminated altogether, GDP growth in the US and Europe would be boosted by 3 per cent.
As for Doha, there is an awful lot of behind-the scenes activity going on here – and hopes of a breakthrough are growing. If a deal can be reached in the next couple of days, that would prove the real value of Davos – and help to ease my concern about the carbon cost of staging the event. So there are plenty of reasons to be optimistic as I set off on another round of receptions this evening!
Wednesday, January 24
Well, I’ve finally made it through the snow and heavy traffic to Davos for the annual meeting of the World Economic Forum. I travelled up to Davos from a meeting in our Zurich office, which, with others, had been attacked over the weekend by anti-globalisation protestors. Paint was thrown over the walls – at least it was in KPMG blue! I wonder if my Swiss colleagues will invite me back in a hurry…
In the car I wondered about the size of the carbon footprint that delegates will leave getting to and from Davos. Then I found out that if I paid some organization $150 I could offset my own CO2 emissions. I’m not sure exactly how that works but I’m sure I‘ll find out in the next few days. Of course, climate change is one of the main themes of this year’s WEF and there are 17 such sessions planned over the next few days, bringing together politicians, business leaders, top academics and non-governmental (NGO) representatives.
My first stop is the Congress Centre where Sir Nicholas Stern, author of a recent ground-breaking report on the subject for the UK government, is leading a session on the economics of climate change. It’s the first time I’ve heard him speak and he gave some fascinating insights into the issue – but I came away still confused about carbon trading. Like Stern, I’m a great believer in taking the long term view – and of the imperative to take action now on climate change. While there is no silver bullet, it’s clear to me that the environment is an issue for everyone - governments, businesses and individuals must take their own responsibility.
Indeed, even if the growing scientific consensus on global warming is wrong, we will all benefit from taking action now. In this sense, we can’t lose. But by doing nothing we risk catastrophe. For now, though, a packed schedule beckons. This evening KPMG is hosting a reception for clients at the Belvedere Hotel and I’ll also attend several other cocktail parties before ending up at a private dinner hosted by WEF founder Klaus Schwab.
German chancellor Angela Merkel is also due to attend. I remember last year she was crowned ‘Queen of Davos’ , such was the impact she made on delegates. Given that Germany is currently president of both the European Union and the G8 group of leading industrialized nations, I think she’ll have no problem retaining her title this year!