Paul O’Callaghan, CEO of BlueTech Research reports from Davos
Attending the World Economic Forum in Davos was something completely outside my realm of previous experience, and I am not quite sure what to compare it to. Davos is truly in the middle of nowhere. Deliberately so, I am sure. It is a two-hour drive to the nearest international airport.

It was at times surreal and if I had to summarise it in a word, I would say ‘circus’. There is pageantry, celebrity, endless receptions and one image that remains with me, is the endless swarms of black Mercedes ferrying anonymous passengers day and night between Zurich airport and this normally understated Swiss resort town.

At times, it felt like a fusion of the world of Andy Warhol, meets NGO’s and finance. I was asked a number of times if I was there for a particular reason, or if I was just on the ‘Davos Circuit’, as if it was some form of travelling roadshow replete with its own set of groupies on tour. The whole place certainly came alive at night, like one large cocktail party.

It is thus hard to sum up a single coherent narrative for the event – nevertheless, here are my key takeaways from the week:

The focus on sustainability and environmental issues were striking.

This was very evident in the messaging from groups like Salesforce, whose screens projected warnings that by 2050 there could be more plastics in the oceans than fish. Another sign proclaimed that ‘The business of business is to improve the state of the world’.Plastics were front and centre at many of the discussions on environmental issues.

Some of the best and most impactful sessions for me, were the panels and interviews with Matt Damon and Gary White of Water.org and Water Equity.org. The two described how they are successfully using a new innovative micro-finance model to help give people on low incomes access to water and sanitation. They outlined how this is addressing market failure, bridging a gap and at the same time providing a return of over 3.5% for philanthropic capital and impact investors.

Matt Damon noted the realisation that he had a few years back, that while drilling wells was changing individual people’s lives, it was not the way they were going to solve water on a large scale.

There was consistent optimism about the role of technology and in particular, artificial intelligence, to change and transform business.

Blockchain remains high on the agenda, with groups such as ConsenSys leading discussions on how blockchain was unlocking a decentralized world. I can see how blockchain democratizes certain business functions and allows people to bypass conventional institutions, and in that sense is a powerful enabler. This includes micro-grid water, where already we see examples in Africa.

Water is being recognised as a solvable problem in our lifetime and an investment opportunity.

Gary White noted that 2.5Bn people have come out of extreme poverty in the past two to three decades. That in itself is a tremendous achievement and something to be celebrated.

The secret to this was not charity or philanthropy.The countries that achieved this, did it largely by pulling themselves up by their own bootstraps and through innovation. China being a prime example. Hans Rosling analyzes this in his seminal work Factfulness, and shows us that we can believe that things are bad and at the same time getting better, and that these are not mutually exclusive ideas.

Clayton Christiansen, whose work on innovation I am an ardent student of, talks about exactly this in his latest book: The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty. There are now over 850 million people who still lack access to water. With a “glass half-full” perspective, this means that almost 90% of the population of the world has some level of access to water. That is great progress.

In terms of sanitation, there is still a lot more work to do. It is estimated that 2.5Bn people lack access to sanitation, or 32% of the world’s population. Matt Damon noted that there are still, what Bono described to him as ‘needless deaths’– those that are avoidable and preventable. Such as from waterborne disease.

There is growing awareness that we can solve the UN’s sustainable development goals of water and sanitation provision in our life-time. Yes, there are strong headwinds – rapid urbanisation, continued population growth and climate change, all make this a moving target. It also makes providing access to water and sanitation a business and investment opportunity too large to ignore.

The links between water and climate change are becoming clearer.

An example highlighted was that 75% of Venice, a city well used to living with water, was recently flooded, with water levels raised by 1.5M, the 4th highest levels on record.

Pension funds, insurers and corporates are taking power from governments and working to globalize standards.

While the world leaders of liberal democracies may have been thin on the ground, the corporate leaders were jostling for every square inch of space on the Promenade. The entire town was a pop-up tradeshow for global brands such as Salesforce, Google and Facebook. As I mentioned, the corporates were keen to display their environmental credentials.

Precisely why the corporates are so focused on this may be linked to pressures from their investors, shareholders and stakeholders including clients and employees.

Pension funds and insurers managing trillions of dollars are going to make it a requirement that they only invest in or ensure entities that are environmental, social and governance (ESG) compliant. This effectively means that $100 trillion in funds is working to globalize standards.

Indeed, one observer astutely noted that we are, in some ways, being disenfranchised by global pension funds! That may help explain why the likes of Sales Force, Google, Intel, PepsiCo, Nike and are focused on reducing carbon emissions, waste and water impacts.

We also see this trend towards self-governance in initiatives such as ZDHC, in which Greenpeace has brought the world’s leading textile companies together to agree to reach the ambitious target of zero discharge of hazardous chemicals by 2020.

These types of goals go well beyond what any sovereign regulator would impose. They are international and transboundary, recognizing the fact that these companies operate internationally and that water, land and air are a global commons and that ultimately, the economy is a wholly owned subsidiary of the ecosystem.

The same pressure from investors was visible in the call to action to portfolio companies to take measures to address climate change in the open letter from

Larry Fink, of BlackWater, which emphasized the link between ‘profit and purpose’.

This is probably the theme that best sums up the different ideas discussed at Davos – recognising and harnessing the ethical and commercial value in dimensions beyond simply the bottom line.

Top Tips for Davos:

Some practical tips for Davos, crowd-sourced from many helpful colleagues!

The coat check – this a great place to watch for people as it is one of the ‘equalizing’ points at the event, everyone has to collect their coat, so you never know who you will bump into!

Most important is a good pair of winter boots. It is always very cold, and can be like an ice rink, so having a set of outdoor shoes will help ensure you don’t end up in heading home on crutches without having ever hit the ski slopes.

Go with the flow. There is a certain fluidity about Davos, especially in the evenings when it really comes alive, and lots of chance random networking. You really have no idea whom you may be speaking with so best to approach it with and open mind and spirit of adventure!