Prince (now King) Charles Speaks at World Economic Forum in Davos. Video: https://youtu.be/8jaTt7sfI1k (Streamed live on January 23, 2020; The Telegraph; 3.75M subscribers; 62,917 views.) Transcript. • [Prof. Klaus Schwab; 0:00]: It is truly a great honour and privilege [0:06] to welcome His Royal Highness. To welcome him back to the annual meeting. I’m [0:13] particularly delighted because it has been almost thirty years ago since your last [0:19] participation. I sense the signals that [0:24] we are reaching a global tipping point, as it has been mentioned many times here, [0:29] in areas that are so close to the heart [0:35] of His Royal Highness. Your Highness, your [0:40] years of dedication passion and work are highly relevant to the scene of this year’s [0:47] annual meeting of stakeholders, for a more cohesive and more sustainable world. We [0:54] are grateful for your leadership on stakeholder responsibility, in accelerating the transition to a [1:03] sustainable market, and we are very honoured to be to work with you on such a [1:11] flagship initiative. Today we are all keen to hear from His Royal Highness his [1:18] mission for a more cohesive and sustainable world. Please welcome His [1:26] Royal Highness, the Prince of Wales. [Applause]. • [Prince (now King) Charles; 1:49]: Ladies and Gentlemen, I am most touched that Professor Klaus Schwab should have [1:56] invited me to be with you as we mark the fiftieth anniversary of the World Economic Forum and its mission to improve the [2:06] state of the world. It is this mission, and the urgent need to shape the next fifty [2:14] years, that has inspired me to be with you here today, after an absence of thirty [2:21] years, I hate to tell you. Now, Ladies and Gentlemen, we are in the midst of a crisis that is [2:28] now, I hope, well understood. Global warming, climate change, and the [2:34] devastating loss of biodiversity, are the greatest threats humanity has ever faced, [2:40] and one largely of our own creation. Now [2:45] I have dedicated much of my life to the restoration of harmony between humanity [2:52] nature and the environment, and to the encouragement of corporate, social, and [2:59] environmental responsibility. Quite frankly it has been a bit of an uphill [3:05] struggle, but now it is time to take it to the next level. In order to secure our [3:15] future, and to prosper, we need to evolve our economic model. Having been engaged [3:23] in these issues since, I suppose, 1968, when I made my first speech on the [3:30] environment, and having talked to countless experts across the globe over [3:35] those decades, I’ve come to realise that it is not a lack of capital that is [3:41] holding us back; but rather the way in which we deploy it. Therefore, to move forward, we need [3:49] nothing short of a paradigm shift. One that inspires action at revolutionary levels [3:56] and pace. And, with this in mind, I am delighted to be launching a [4:03] “sustainable markets initiative”, with the generous support of the World Economic Forum. For [4:10] me, sustainable markets offer a new, systems-level [4:15] framework which grounds markets in a higher-purpose mission. In other words, [4:21] putting people and the planet at the heart of global value creation. Sustainable [4:29] markets generate long term value through the balance of natural, social, human, and [4:36] financial capital. Systems level change, within sustainable markets, is driven by [4:44] consumer and investor demand, access to sustainable alternatives, and an enhanced [4:51] partnership between the public, private, and philanthropic sectors. Sustainable [4:58] markets can also inspire the technology innovation and scale that we so urgently [5:05] need. The past decade has shown us just how quickly industry transformation can [5:13] happen when you reimagine and re-engineer the business model. We need [5:21] only look to mobile technology, electric vehicles, the space industry, e-commerce, [5:27] and online streaming for inspiration. Looking forward, new employment [5:35] opportunities, entire new industries, and markets rooted in sustainability, are [5:41] within our grasp, with the potential for unprecedented economic growth. Changing our current [5:52] trajectory will require bold and imaginative action, together with [5:57] determination and decisive leadership. We all know the problem. [6:04] And increasingly we agree on the direction. 2020 is the time for solutions [6:11] and practical action. With our SDG [Sustainable Development Goal] and Paris commitments in mind, and the good [6:20] news is that they are well within our reach, if, Ladies and Gentlemen, we all pull [6:26] together in a coordinated global initiative to tackle the greatest global threat. I would like to outline ten [6:36] practical actions that will drive forward the sustainable markets approach. [6:42] • First of all shifting our default setting to ... to sustainable. For [6:50] sustainable markets, this means everyone in a leadership role putting genuine [6:57] sustainability at the centre of our business models, our analysis, our [7:03] decisions, and our actions. In other words, put simply, we need to put nature, and the [7:12] protection of nature’s capital, from which we draw an annual return, at the [7:17] heart of how we operate. It also means further defining and [7:23] developing the discipline and framework of sustainable markets, and sustainable [7:30] industries. • Second, outlining responsible [7:36] transition pathways to decarbonise and move to Net Zero. It is time for [7:43] businesses, industries, and countries alike, to design and implement how they [7:50] will decarbonise, and transition to Net Zero. Moving together with clear roadmaps [7:58] will create efficiencies and economies of scale that will allow us to leapfrog [8:04] our collective progress and accelerate our transition. A little competition in [8:12] this area could go a long way. • Third, reimagining industries through the [8:19] lens of sustainable markets. Using a [8:25] sustainable markets framework, we have an incredible opportunity to create [8:32] entirely new sustainable industries, product services, and supply chains based [8:39] on a circular bio-economy, while in parallel, helping to transition our [8:47] existing systems. To do this we must look [8:53] at our markets using a business model approach, to revenue generation, and [8:59] systems operations. • Fourth, identifying [9:06] game changes and barriers to transition. We need to identify, showcase, and invest [9:15] in the game-changing technologies and solutions that are emerging around the [9:21] world. To accelerate, we must also identify the barriers to progress; be it [9:29] policy, regulation, infrastructure, investments, or the wider enabling [9:35] environment. Now often I find it is simply about bringing the right people [9:42] together to help lift those roadblocks out of the way. This convening role is, [9:50] I hope, at least one practical contribution my “sustainable markets initiative” can [9:56] make. Because it is only by seeking out these game-changes and barriers that we [10:04] will be able to make tangible progress. • Fifth, [10:10] reversing perverse subsidies and improving incentives for sustainable [10:16] alternatives. To achieve scale within sustainable markets, we must not be [10:23] afraid to adapt our long-standing incentive structures, if we are to reap the benefits afforded [10:31] by a more sustainable world. Re-orientating economic subsidies, [10:37] financial incentives, and regulations, can have a dramatic and transformative [10:44] effect on our market systems. It is time to level the playing field and to think [10:52] about how we properly deploy taxes, policies, and regulation, in a way that [10:59] catalyses sustainable markets. For instance, for many years I’ve tried to [11:06] encourage the adoption of the polluter-pays principle, in order to provide the necessary incentives. Public policy, [11:14] therefore, has a critical role to play. • Six, [11:20] investing in STEM, innovation, and R&D. Whether it is AI, where that does not [11:28] seek to challenge or replace unique human characteristics, and intuition is [11:34] balanced, and avoids the law of unintended consequences. Or indeed [11:40] nuclear fusion, 3d printing, energy storage, electric transportation, carbon [11:49] capture, renewables or biotech. We are on the verge of catalytic breakthroughs [11:56] that will alter our view of what is possible, and profitable, within the [12:03] framework of a sustainable future. To move forward, we must acknowledge that [12:11] sustainability and profitability are no longer mutually exclusive. Effective [12:19] solutions must ensure that sustainable technologies and alternatives are [12:26] competitively priced. • Seventh, investing in nature as the true [12:34] engine of our economy; beyond major innovations and technologies we must [12:41] also look to invest in nature- based solutions, in sectors like agriculture, [12:47] forestry, and fisheries. Indeed, for all the resources that we take from the [12:53] earth. Nature’s contribution to the global economy [12:58] is estimated to be worth more than 125 trillion dollars annually. Greater [13:07] than the entire world’s annual GDP, estimated at 85.91 trillion [13:14] dollars in 2018. Building conservation and nature based [13:20] solutions into our asset base, and supply chains, can therefore offer significant [13:28] economic growth opportunities for countries and businesses alike. Including [13:34] in areas such as the Circular Bio-Economy, Eco-Tourism, and Green Public [13:41] Infrastructure. If, Ladies and Gentlemen, we value our natural capital properly, as I’ve [13:50] been trying to say for a quite a long time, our national and individual balance sheets might look very different indeed. [13:59] • Eight, adopting common metrics and [14:04] standards. An increasing number of corporations are adopting ESG [Environmental, Social and Governance (Investments)] [14:11] methodologies, and highlighting their SDG aligned investments. However, it is time [14:18] to move to unified metrics and global standards. People want to trust that the [14:27] goods and services they buy are socially, environmentally, and ethically produced. [14:36] Through new technologies we have the ability to tag, track, [14:42] and trace supply chains, in unprecedented ways. So it is time to make this level of [14:50] supply chain transparency the norm. • Ninth, [14:57] making the sustainable options the trusted and attainable options for [15:03] consumers. With consumers controlling an estimated sixty percent of global GDP people [15:14] around the world have the power to drive the transformation to sustainable markets. Yet we cannot expect consumers [15:23] to make sustainable choices if these choices are not clearly laid before them. [15:30] As consumers increasingly demand sustainable products they deserve to be [15:38] told more about product life cycles, supply chains, and production methods. For [15:47] a transition to take place, being socially and environmentally conscious [15:52] cannot only be for those who can afford it. If all the true costs are taken into [15:58] account, being socially and environmentally responsible should be [16:03] the least expensive option, because it leaves the smallest footprint behind. So [16:10] we must communicate better with consumers about the sustainability of the good services and investments we [16:18] offer. • Tenth, connecting investments to [16:25] investables, using platforms that can rapidly scale solutions. On every [16:32] pressing issue we face there are solutions that are not just available but increasingly cost effective. At the [16:41] same time there are trillions of dollars in sovereign wealth funds, pension funds, insurance and asset portfolios, looking [16:50] for investable and sustainable projects with good long-term value and rates of [16:55] return. So it is time to align sustainable solutions with funding in a [17:02] way that can transform the marketplace. This requires not only showcasing high [17:10] potential investments, but that we reimagine financial analysis, structuring [17:16] our models of return. Now, if we all [17:21] accept that a profitable—yet sustainable—future is the desired end state, [17:27] the questions we must ask are how quickly can we get there, and who are the [17:34] leaders who will drive us forward. I submit that we are, in fact, far further [17:40] ahead than we might think, making it critical that we leverage the vital work [17:47] already underway. I would ever like to highlight just a few examples to [17:53] demonstrate that in nearly every industry we are seeing progress that we can build on. To start with, despite great [18:02] efforts over the past thirty-five years I’ve found that we could never convince financial and capital markets of the [18:09] overwhelming need to invest in ways that truly benefits people and planet. Yet in [18:17] the last two or three years, we have seen a dramatic increase in sustainable [18:22] investing. Investment managers have frequently tell me that the demand for [18:29] these investments far outstrip supply. At the same time returns on [18:38] sustainable investments are increasingly out-performing traditional portfolios. In [18:46] the financial sector, many central banks and financial institutions have [18:51] committed to integrating climate risk into stress-testing supervision and [18:57] disclosure. With this progress, there are now growing calls from financial [19:04] institutions and companies are likely to make disclosure mandatory. In aviation [19:12] there are opportunity to develop commercially viable hydrogen- powered electric aircraft within the decade. In [19:21] the interim, many in the industry are ready to adopt sustainable aviation fuel [19:26] made from waste material that can reduce carbon emissions, starting today. In [19:35] shipping, the manufacturers of ship engines are proposing it may take two to [19:41] three years to build engines that run on green ammonia and methanol made from [19:47] solar and wind power. These ships could start operations in the middle of the decade and become the [19:54] norm around 2030. Now this hasn’t all been certified and tested, but if the [20:01] industry and the regulators make a real effort, we can make it work creating a [20:07] real tipping point. In renewable energy, [20:13] we are witnessing breakthroughs in the cost of solar that have the potential to revolutionise almost every industry. We [20:21] are rapidly approaching a time when renewable energy will be an order of magnitude cheaper than fossil fuels. In [20:30] carbon capture and storage there are a growing number of initiatives that might [20:36] just buy us vital time, as we make our transition to sustainable markets and a [20:43] Net Zero economy. In forestry, Ladies and Gentlemen, we [20:49] can now transform wood, the most versatile natural material on the planet, into a new generation of wood based [20:56] products, capable of offering alternatives to plastics, chemicals, textiles, transport, and construction. [21:06] Increasingly we are seeing that the bio- economy has the potential to ignite [21:13] new industries and fuel sustainable markets thus providing at last the economic [21:21] incentive to value the vastly important ecosystem services provided by the [21:27] immense biodiversity and carbon capture potential of restored and expanded [21:33] forests. Along with huge opportunities in integrated agro-forestry systems. When [21:42] the right sustainable goods and services are developed, proved, and [21:48] affordable, the choice to adopt them will become obvious. Truly, to seize these [21:54] opportunities we need to visualise the future and have the confidence to invest [22:00] in it. If there is one critical lesson we [22:08] have to learn from this crisis it is that nature, Ladies and Gentlemen, is not [22:14] a separate asset class. Nature is, in fact, the lifeblood of our financial markets, [22:22] and, as such, we must rapidly realign our [22:27] own economy to mimic nature’s economy and work in harmony with it. After nearly [22:38] fifty years of trying to champion this cause I cannot help feeling that, finally, [22:44] we are ready to change our trajectory. For my part, I have made sustainable [22:51] markets my priority for 2020 and actually beyond ... how long it takes. I have [23:00] instructed my teams and my organisations similarly to align with this effort and [23:06] I expect them to contribute and with the stakes this high I would challenge you [23:11] all to do the same. And, critically, we [23:17] must foster innovation. And here, if you allow me, I would like to acknowledge the [23:22] new year’s short earth shot initiative of my son and the new Cambridge which seems to me to extol the sort of [23:29] horizon- lifting approach we need in order to give us hope. So, beginning here [23:37] at Davos, and throughout the year, and in order to identify game-changes, [23:43] investments and barriers to transition, I will be convening a broad range of [23:48] industry and issue roundtables, including but not limited to, aviation, water, carbon [23:56] capture and storage, shipping, forestry, plastics, financing, digital technology, [24:03] the bio-economy, nature- based solutions, renewable energy, battery storage, [24:09] electric vehicles, fisheries, integrated health care, cement, steel, traceability, [24:15] labelling, and agriculture. At the end of which I shall probably be dead. So, [24:23] Ladies and Gentlemen, as we look to design and create sustainable markets and [24:28] industries, these roundtables will bring together system innovators, investors, and [24:34] decision-makers, to start designing and charting the course. I believe profoundly [24:42] in the critical importance of this juncture of forming an unprecedented global alliance of investors which can [24:50] genuinely mobilise the kind of trillions of dollars needed to put our economy on [24:56] the correct path. This would be the most dramatic act of responsible leadership [25:03] ever seen by the global private sector and would at once provide a catalytic [25:09] incentive for the public sector to follow. So with 2020 being seen as the [25:16] super year, kick-starting a decade of action for people and planets, there is [25:22] also an opportunity to bring sustainable markets into focus in each of this [25:27] year’s major global meetings. While it would be a bit of a challenge for me to [25:33] get to them all, I intend to do my utmost to ensure that the message of urgency, [25:39] systemic change, collaboration, and integration, is heard. After all, [25:48] Ladies and Gentlemen, do we want to go down in history as the people who did [25:53] nothing to bring the world back from the brink in time to restore the balance [25:59] when we could have done. I don’t want to. And just think for a moment, what good is [26:08] all the extra wealth in the world, gained from business as usual, if you couldn’t [26:13] do anything with it, except what should burn in catastrophic conditions. This is [26:19] why I need your help, your ingenuity, and your practical skills, to ensure that the [26:27] private sector leads the world out of the approaching catastrophe, into which we have engineered ourselves. It is my [26:36] greatest possible hope that you will join me, this year, in accelerating the transition to sustainable markets and [26:43] rapid decarbonisation. Ladies and Gentlemen, you all have a seat at the table, and this [26:50] must be the year that we put ourselves on the right track. Everything I’ve tried [26:56] to do and urge over the past fifty years has been done with our children and grandchildren in mind. Because I did not [27:04] want to be accused by them of doing nothing, except prevaricate and deny the [27:10] problem. Now, of course, they are accusing us of exactly that. So put yourselves in [27:18] their position, ladies and gentlemen. We simply cannot waste any more time. [27:25] The only limit, the only limit is our willingness to act, and the time to act [27:33] is now. Thank you ... [Applause].