The Prince of Wales delivers a keynote speech at The World Economic Forum on Wednesday, 22 January 2020.
What good is all the extra wealth in the world, gained from “business as usual”, if you can do nothing with it except watch it burn in catastrophic conditions?
Prince Charles met world leaders, politicians and environmentalists including teenage activist Greta Thunberg in Davos, Switzerland.
He officially launched the Sustainable Markets Council at the forum: the new initiative aims to create sustainable markets whilst helping the global economy become more environmentally friendly.
The annual meeting at Davos encourages open discussions about ways to tackle some of the world’s biggest challenges.
Read Prince Charles’ speech in full:
Ladies and Gentlemen, I am most touched that Professor Klaus Schwab should have invited me to be with you as we mark the 50th Anniversary of the World Economic Forum and its mission to “improve the state of the world”. It is this mission, and the urgent need to shape the next fifty years, that has inspired me to be with you here today, after an absence of 30 years I hate to tell you.
We are in the midst of a crisis that is now, I hope, well understood. Global warming, climate change, and the devastating loss of biodiversity are the greatest threats humanity has ever faced – and one largely of our own creation.
I have dedicated much of my life to the restoration of harmony between humanity, Nature and the environment, and to the encouragement of corporate social and environmental responsibility. Quite frankly, it has been a bit of an uphill struggle. But, now, it is time to take it to the next level.
In order to secure our future and to prosper, we need to evolve our economic model. Having been engaged in these issues since I suppose 1968, when I made my first speech on the environment, and having talked to countless experts across the globe over those decades, I have come to realize that it is not a lack of capital that is holding us back, but rather the way in which we deploy it. Therefore, to move forward, we need nothing short of a paradigm shift, one that inspires action at revolutionary levels and pace. With this in mind, I am delighted to be launching a Sustainable Markets Initiative, with the generous support of the World Economic Forum.
For me, Sustainable Markets offer a new systems-level framework which ground markets in a higher purpose mission – in other words, putting people and planet at the heart of global value creation.
Sustainable markets generate long-term value through the balance of natural, social, human and financial capital. Systems-level change within sustainable markets is driven by consumer and investor demand, access to sustainable alternatives and an enhanced partnership between the public, private and philanthropic sectors. Sustainable markets can also inspire the technology, innovation and scale that we so urgently need.
The past decade has shown us just how quickly industry transformation can happen when you reimagine and re-engineer the business model – we need only look to mobile technology, electric vehicles, the space industry, e-commerce and online streaming for inspiration. Looking forward, new employment opportunities, entire new industries and markets rooted in sustainability are within our grasp, with the potential for unprecedented economic growth.
Changing our current trajectory will require bold and imaginative action, together with determination and decisive leadership. We all know the problem, and increasingly we agree on the direction. 2020 is the time for solutions and practical action. With our S.D.G. and Paris commitments in mind, – and the good news is that they are well within our reach if, Ladies and Gentlemen, we all pull together in a coordinated global initiative to tackle the greatest global threat – I would like to outline ten practical actions that will drive forward the sustainable markets approach.
First of all – shifting our default setting to “sustainable”. For sustainable markets this means everyone in a leadership role putting genuine sustainability at the centre of our business models, our analysis, our decisions and our actions. In other words, put simply, we need to put Nature, and the protection of Nature’s capital – from which we draw an annual return – at the heart of how we operate. It also means further defining and developing the discipline and framework of sustainable markets and sustainable industries.
Second – outlining responsible transition pathways to decarbonize and move to net zero. It is time for businesses, industries and countries alike to design and implement how they will decarbonize and transition to net zero. Moving together, with clear roadmaps, will create efficiencies and economies of scale that will allow us to leapfrog our collective progress and accelerate our transition. A little competition in this area could go a long way.
Third – reimagining industries through the lens of sustainable markets. Using a sustainable markets framework, we have an incredible opportunity to create entirely new sustainable industries, products, services and supply chains, based on a circular bioeconomy, while in parallel helping to transition our existing systems. To do this we must look at our markets using a business model approach to revenue generation and system operations.
Fourth – identifying game-changers and barriers to transition. We need to identify, showcase and invest in the game-changing technologies and solutions that are emerging around the world. To accelerate, we must also identify the barriers to progress, be it policy, regulation, infrastructure, investment or the wider enabling environment. Often, I have found, it is simply about bringing the right people together to help lift those roadblocks out of the way. This convening role is, I hope, at least one practical contribution my Sustainable Markets Initiative can make. Because it is only by seeking out these game-changers and barriers that we will be able to make tangible progress.
Fifth – reversing perverse subsidies and improving incentives for sustainable alternatives. To achieve scale within sustainable markets we must not be afraid to adapt our long-standing incentive structures if we are to reap the benefits afforded by a more sustainable world. Re-orientating economic subsidies, financial incentives and regulations can have a dramatic and transformative effect on our market systems. It is time to level the playing field and to think about how we properly deploy taxes, policies and regulation in a way that catalyses sustainable markets. For instance, for many years I have tried to encourage the adoption of the “polluter pays” principle in order to provide the necessary incentives. Public policy, therefore, has a critical role to play.
Sixth – investing in STEM, innovation and R&D. Whether it is AI (where that does not seek to challenge or replace unique human characteristics and intuition), or indeed nuclear fusion, 3-D printing, energy storage, electric transportation, carbon capture, renewables or biotech. We are on the verge of catalytic breakthroughs that will alter our view of what is possible – and profitable – within the framework of a sustainable future. To move forward, we must acknowledge that sustainability and profitability are no longer mutually exclusive. Effective solutions must ensure that sustainable technologies and alternatives are competitively priced.
Seventh – investing in Nature as the true engine of our economy. Beyond major innovations and technologies, we must also look to invest in Nature-based solutions in sectors like agriculture, forestry and fisheries – indeed, for all the resources that we take from the Earth. Nature’s contribution to the global economy is estimated to be worth more than $125 trillion annually – greater than the entire world’s annual G.D.P., estimated at $85.91 Trillion in 2018. Building conservation and nature-based solutions into our asset base and supply chains can, therefore, offer significant economic growth opportunities for countries and businesses alike – including in areas such as the circular bioeconomy, ecotourism and green public infrastructure. If, Ladies and Gentlemen, we valued our natural capital properly (as I have been trying to say for quite a long time), our national and individual balance sheets might look very different indeed!
Eighth – adopting common metrics and standards. An increasing number of corporations are adopting E.S.G. methodologies and highlighting their S.D.G.-aligned investments. However, it is time to move to unified metrics and global standards. People want to trust that the goods and services they buy are socially, environmentally and ethically produced. Through new technologies we have the ability to tag, track and trace supply chains in unprecedented ways – so it is time to make this level of supply chain transparency the norm.
Ninth – making the sustainable options the trusted and attainable options for consumers. With consumers controlling an estimated 60% of global G.D.P., people around the world have the power to drive the transformation to sustainable markets. Yet, we cannot expect consumers to make sustainable choices if these choices are not clearly laid before them. As consumers increasingly demand sustainable products, they deserve to be told more about product lifecycles, supply chains and production methods. For a transition to take place, being socially and environmentally conscious cannot only be for those who can afford it. If all the true costs are taken into account, being socially and environmentally responsible should be the least expensive option because it leaves the smallest footprint behind. We must communicate better with consumers about the sustainability of the goods, services and investments we offer.
Tenth – connecting investments to investables using platforms that can rapidly scale solutions. On every pressing issue we face, there are solutions that are not just available, but increasingly cost effective. At the same time there are trillions of dollars in sovereign wealth funds, pension funds, insurance, and asset portfolios looking for investible and sustainable projects with good long-term value and rates of return. It is time to align sustainable solutions with funding in a way that can transform the market place. This requires not only showcasing high potential investments, but that we reimagine financial analysis, structuring and models of return.
Now if we all accept that a profitable, yet sustainable, future is the desired end state – the questions we must ask are: How quickly can we get there and who are the leaders who will drive us forward?
I submit that we are, in fact, far further ahead than we might think, making it critical that we leverage the vital work already underway. I would therefore like to highlight just a few examples to demonstrate that in nearly every industry we are seeing progress that we can build on.
To start with, despite great efforts over the past 35 years, I have found that we could never convince financial and capital markets of the overwhelming need to invest in ways that truly benefit people and planet. Yet, in the last two or three years, we have seen a dramatic increase in sustainable investing. Investment managers frequently tell me that the demand for these investments far outstrip supply. At the same time, returns on sustainable investments are increasingly out-performing traditional portfolios.
In the financial sector, many central banks and financial institutions have committed to integrating climate risk into stress-testing, supervision and disclosure. With this progress there are now growing calls from financial institutions and companies alike to make disclosure mandatory.
In aviation, there are opportunities to develop commercially viable, hydrogen-powered and electric aircraft within the decade. In the interim, many in the industry are ready to adopt Sustainable Aviation Fuel made from waste material that can reduce carbon emissions – starting today.
In shipping, the manufacturers of ship engines are proposing it may take two to three years to build engines that run on green ammonia and methanol made from solar and wind power. These ships could start operations in the middle of the decade and become the norm around 2030. This hasn’t all been certified and tested, but if the industry and the regulators make a real effort, we can make it work – creating a real tipping point.
In renewable energy, we are witnessing breakthroughs in the cost of solar that have the potential to revolutionize almost every industry. We are rapidly approaching a time when renewable energy will be an order of magnitude cheaper than fossil fuels.
In carbon capture and storage, there are a growing number of initiatives that might just buy us vital time as we make our transition to sustainable markets and a net zero economy.
In forestry, Ladies and Gentlemen, we can now transform wood, the most versatile natural material on the planet, into a new generation of wood-based products capable of offering alternatives to plastics, chemicals, textiles, transport and construction. Increasingly, we are seeing that the bioeconomy has the potential to ignite new industries and fuel sustainable markets – thus providing, at last, the economic incentive to value the vastly important eco-system services provided by the immense biodiversity and carbon-capture potential of restored and expanded forests, along with huge opportunities in integrated agro-forestry systems.
When the right sustainable goods and services are developed, proved and affordable, the choice to adopt them will become obvious. Truly to seize these opportunities, we need to visualize the future and have the confidence to invest in it.
If there is one critical lesson we have to learn from this crisis it is that Nature, Ladies and Gentlemen, is not a separate asset class. Nature is, in fact, the life blood of our financial markets and, as such, we must – rapidly – re-align our own economy to mimic Nature’s economy and work in harmony with it.
After nearly fifty years of trying to champion this cause, I cannot help but feel that, finally, we are ready to change our trajectory.
For my part, I have made Sustainable Markets my priority for 2020 and actually beyond – for however long it takes. I have instructed my teams and my organizations similarly to align with this effort – and I expect them to contribute. With the stakes this high, I would challenge you to do the same.
And, critically, we must foster innovation – and here, if you will allow me, I would like to acknowledge the new Earthshot initiative of my son, The Duke of Cambridge, which seems to me to extol the sort of horizon-lifting approach we need in order to give us hope.
Beginning here at Davos, and throughout the year – and in order to identify game-changers, investments and barriers to transition – I will be convening a broad range of industry and issue roundtables including, but not limited to: aviation; water; carbon capture and storage; shipping; forestry; plastics; financing; digital technology; the bioeconomy; nature-based solutions; renewable energy; batteries, storage and electric vehicles; fisheries; integrated healthcare; cement; steel; traceability and labelling; and agriculture – at the end of which I shall probably be dead. So Ladies and Gentlemen, as we look to design and create sustainable markets and industries, these roundtables will bring together system innovators, investors and decision-makers to start designing and charting the course.
I believe profoundly in the critical importance, at this juncture, of forming an unprecedented global alliance of investors which can genuinely mobilize the kind of trillions of dollars needed to put our economy on the correct path. This would be the most dramatic act of responsible leadership ever seen by the global private sector and would at once provide a catalytic incentive for the public sector to follow.
With 2020 being seen as the “super year”, kick-starting a decade of action for people and planet, there is also an opportunity to bring sustainable markets into focus in each of this year’s major global meetings. While it will be a bit of a challenge for me to get to them all, I intend to do my utmost to ensure that the message of urgency, systemic change, collaboration and integration is heard.
After all, Ladies and Gentlemen, do we want to go down in history as the people who did nothing to bring the world back from the brink in time to restore the balance when we could have done? I don’t want to. And just think for a moment – what good is all the extra wealth in the world, gained from “business as usual”, if you can do nothing with it except watch it burn in catastrophic conditions?
This is why I need your help, your ingenuity and your practical skills to ensure that the private sector leads the world out of the approaching catastrophe into which we have engineered ourselves.
It is my greatest possible hope that you will join me this year in accelerating the transition to sustainable markets and rapid decarbonisation – Ladies and Gentlemen, you all have a seat at the table as this must be the year that we put ourselves on the right track.
Everything I have tried to do, and urge, over the past fifty years has been done with our children and grandchildren in mind, because I did not want to be accused by them of doing nothing except prevaricate and deny the problem. Now of course, they are accusing us of exactly that. Put yourselves in their position, Ladies and Gentlemen. We simply cannot waste any more time – the only limit is our willingness to act, and the time to act is now.
Thank you, Ladies and Gentlemen.