TRANSCRIPT (highlights by editor) for EDUCATIONAL PURPOSES

Thank you for your welcome. It is good to be back in Davos once again in person.

Your theme perfectly sets out the dilemma of today’s world: We need cooperation, yet we face fragmentation. I am not here to sugar-coat the scale of that challenge – or the sorry state of our world. We can’t confront problems unless we look them squarely in the eye. And we are looking into the eye of a Category 5 hurricane.

Our world is plagued by a perfect storm on a number of fronts. Start with the short-term, a global economic crisis. The outlook is bleak. Many parts of the world face recession. The entire world faces a slowdown.

We see deepening inequalities and a rapidly unfolding cost-of-living crisis – affecting women and girls the most. Supply chain disruptions and an energy crunch. Soaring prices. Rising interest rates along with inflation. And debt levels pounding vulnerable countries.

Add to all of that the lingering effects of the pandemic. COVID-19 is still straining economies – while the world’s failure to prepare for future pandemics is straining credulity. Somehow – after all we have endured – we have not learned the global public health lessons of the pandemic. We are nowhere near ready for pandemics to come.

Add to all that another major and, indeed, existential challenge. We are flirting with climate disaster. Every week brings a new climate horror story. Greenhouse gas emissions are at record levels. The commitment to limit global temperature rise to 1.5 degrees is going up in smoke. Without further action, we are headed to a 2.8 degree increase.

The consequences will be devastating. Several parts of our planet will be uninhabitable. And for many, this is a death sentence.

But it is not a surprise. The science has been clear for decades. I am not talking only about UN scientists. I am talking about fossil fuel scientists. We learned last week that certain fossil fuel producers were fully aware in the 1970s that their core product was baking our planet.

Just like the tobacco industry, they rode rough-shod over their own science. Big Oil peddled the big lie. And like the tobacco industry, those responsible must be held to account. Today, fossil fuel producers and their enablers are still racing to expand production, knowing full well that their business model is inconsistent with human survival.

This insanity belongs in science-fiction, yet we know the ecosystem meltdown is cold, hard scientific fact. Add to this toxic brew yet another combustible factor – conflict, violence, war.

Especially the Russian invasion of Ukraine – not only because of the untold suffering for the Ukrainian people, but because of its profound global implications. On global food and energy prices. On trade and supply chains. On questions of nuclear safety. On the very foundations of international law.

We are making progress where we can – particularly in facilitating exports of food and fertilizers from Ukraine and Russia. But we are a far cry from peace in line with international law and the United Nations Charter.

Ladies and gentlemen, All these challenges are inter-linked. They are piling up like cars in a chain reaction crash.

Now, let’s be clear. It would be difficult to find solutions to these global problems in the best of times – if the world was united. But these are far from the best of times – and the world is far from united.

Instead, we face the gravest levels of geopolitical division and mistrust in generations – and it is undermining everything. The East-West divide.

We risk what I have called a Great Fracture – the decoupling of the world’s two largest economies. A tectonic rift that would create two different sets of trade rules, two dominant currencies, two internets and two conflicting strategies on artificial intelligence.

This is the last thing we need. The IMF reported that dividing the global economy into two blocs could cut global GDP by a whopping $1.4 trillion.

There are many aspects in which US-China relations diverge – particularly on questions of human rights and regional security. But it is possible – indeed essential – for the two countries to have meaningful engagement on climate, trade and technology to avoid the decoupling of economies or even the possibility of future confrontation.

For the historians among you: We must avoid a 21st century sequel to the Thucydides Trap.

At the same time, the North-South divide is deepening.

I am not convinced that the wealthier world truly grasps the degree of frustration and anger in the Global South. Frustration and anger about the gross inequity of vaccine distribution.

Frustration and anger about pandemic recovery – with support overwhelmingly concentrated in wealthier countries that could print money. Frustration and anger about a climate crisis that is crippling countries that contributed least to global heating.

Frustration and anger over a morally bankrupt financial system in which systemic inequalities are amplifying societal inequalities. A system that routinely denies debt relief and concessional financing to vulnerable middle-income countries in desperate need.

A system in which most of the world’s poorest countries saw their debt service payments skyrocket by 35% in the last year alone. We need to bridge all these divides and restore trust.

How? First — by reforming and building fairness into the global financial system.

Developing countries need access to finance to reduce poverty and hunger and advance the Sustainable Development Goals. I have urged the G20 to agree on a global SDG Stimulus Plan that will provide support to countries of the Global South – including vulnerable middle-income ones.

They need the necessary liquidity, debt relief and restructuring – as well as long-term lending – to invest in sustainable development. In short, we need a new debt architecture.

Multilateral Development Banks must change their business model. Beyond their operations. they must concentrate on leveraging private finance systematically through guarantees, and being first risk-takers in coalitions of financial institutions to support developing countries.

Second, bridging divides and restoring trust means meaningful climate action. Now. The battle to keep the 1.5 degree limit alive will be won or lost in this decade. On our watch.

My friends, right now it is being lost. We must act together to close the emissions gap. To phase out coal and supercharge the renewable revolution.

To end the addiction to fossil fuels. And to stop our self-defeating war on nature.

The developed world must finally deliver on its $100 billion climate finance commitment to support developing countries.

Adaptation finance must be doubled.

And the biggest emitters – namely G20 countries – must unite around a Climate Solidarity Pact in which they make extra efforts in the 2020s to keep the 1.5 degree limit alive.

Developed countries must provide financial and technical assistance to help major emerging economies accelerate their renewable energy transition. But our climate goals also need the full engagement of the private sector.

More and more businesses are making net zero commitments. But benchmarks and criteria are often dubious or murky. This misleads consumers, investors and regulators with false narratives. It feeds a culture of climate misinformation and confusion. And it leaves the door wide open to greenwashing.

My Expert Group on Net-Zero emissions commitments recently issued a how-to guide for credible, accountable net-zero pledges.

Here at Davos, I call on all corporate leaders to act on it. Put forward credible and transparent transition plans on how to achieve net zero – and submit those plans before the end of this year. The transition to net zero must be grounded in real emissions cuts – and not rely on carbon credits and shadow markets.

Finally, what is true about private sector engagement on climate applies across a range of challenges. Government action is critical – but it’s not enough. We must find avenues to boost the private sector’s ability to play its full role for good.

In many ways, the private sector is leading. Governments need to create the adequate regulatory and stimulus environment to support it.

And business models and practices must be reworked to advance the Sustainable Development Goals. Without creating the conditions for the massive engagement of the private sector, it will be impossible to move from the billions to trillions needed to achieve the SDGs.

To lead the way to expand economic opportunity for women. To ensure greater engagement and cooperation for vaccine equity. To achieve global food security.

And for that, we need the cooperation of the private sector to keep Ukrainian and Russian food and fertilizer exports flowing and affordable. Even in the midst of war, the insurance sector has helped support the movement of vessels from Ukraine and Russia.

We urgently need other private sector actors to engage such as the banking sector, traders and shippers. Across the spectrum of global challenges, we need private sector resourcefulness and cooperation to advance peace, sustainable development and human rights.

Dear Friends, there are no perfect solutions in a perfect storm. But we can work to control the damage and seize opportunities.

Now more than ever, it’s time to forge the pathways to cooperation in our fragmented world.

The world can’t wait.

Thank you.

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