Wednesday, January 28, 2009

CSR Reflections on Davos (Day 1)

It's fair to say that if you're prone to depression, Davos is not a good place to be this year. Not only is the economic outlook gloomier than ever, but it is also snowing heavily "thus forcing everybody to dress in silly boots and bear-like coats that automatically strip even 'masters of the universe' of a bit of their dignity", as BBC Radio 4 Today programme presenter Evan Davis noted.

So what have we learned so far? Here are 5 points that I took away from today:

1. GROWTH - The IMF is expecting the global growth rate for 2009 to fall to 0.5%, meaning growth per capita will be negative. The issue of resilience is key. For example, Rahul Bajaj, chairman of Indian car manufacturer Bajaj Auto, says India's domestic demand has made it more resilient than many countries. Should this be part of nations' responsible competitiveness strategies in future?

2. JOBS - The ILO says as many as 51 million jobs worldwide could be lost this year, pushing the world's unemployment rate to 7.1% by the end of 2009, compared with 6.0% in 2008. Could it be that the biggest CSR issue in 2009 will be around job retention and responsible approaches to redundancy?

3. SPECULATION - Stephen Schwarzman, chairman of the leading private equity company, the Blackstone Group, says that 40% of the world's wealth was destroyed in last five quarters. "It is an almost incomprehensible number," he says. "Business will be very different." Can the casino economy ever be compatible with responsibility, and will we be able to tame it?

4. TRUST - Companies are viewed as less trustworthy than a year ago and consumers want governments to play a greater role in business, according to a poll by Edelman. "Business really has to work its way back. It has to re-earn the trust of its broad sets of constituents," says CEO Richard Edelman. "I think we have moved from a shareholder society to a stakeholder society, and that has massive implications." I hope he's right!

5. CHARITY - South African Finance Minister Trevor Manuel notes that overseas development aid to Africa is suffering: "Already, we are some $240bn (£167bn) short of the commitments made at [the 2005 G8 summit in] Gleneagles." Surely, we can expect corporate philanthropy to suffer in equal measure?

I think WEF founder, Klaus Schwab, best sums up the challenge we face: "We have now a mass crash and we have to figure out first how we help those injured by it. Secondly, we have to find out what rules we need for the future in order to avoid this happening again." 

Finally, former UN Secretary-General, Kofi Annan, continues to be the conscience of the world, when he says: "We need to ensure the poorest in the planet - who will be hardest hit by the financial crisis - are not forgotten." A timely reminder for what should be the central concern of CSR in the coming months?