Event with Pictet Group

Ladies and Gentlemen:

There is a Chinese curse which says “May you live in interesting times.” Like it or not, we live in interesting times, in times of danger and uncertainty. At the same time, we live in one of the most creative moments in history.

It is my pleasure to welcome you to the Palais this evening to examine both: the danger and uncertainty, but also the creativity and yes, the hope of our time.

The very building we are in is testament to this eternal dichotomy. Built for the League of Nations in the 1930s, the Palais has ever since been a place where nations have come together to defuse the danger of conflict, to give their people hope. In fact, just one floor below, the Syria negotiations are underway as we speak [in case finished: have just taken place].

So let’s start by looking at the danger and uncertainty of our time:

Any such exploration must inevitably start with climate change: For all the challenges we face, this is the one that will define the nature of this century more dramatically than all others.

Tonight, we’ll spend almost one hour together. During this hour, over 10,000 people will join the global population; four million tons of carbon dioxide will be emitted; 1,500 hectares of forests will be cut; and three species will go extinct. During this hour, the pollution that already resides in our atmosphere will trap as much heat as would be released by detonating over 16,600 Hiroshima class atomic bombs. All in just one hour.

You can already see the impact of all of this: Last year was the hottest ever; the second hottest was the year before that; and the past decade was the hottest ever recorded. The number of natural disasters has quadrupled since 1970.

Millions of people and trillions of assets are at risk from rising seas and other climate disruptions. Climate change is a direct threat in itself and a multiplier of many other threats – from poverty to displacement to conflict.

What compounds the challenge is that all of the above – poverty, displacement, conflict – obstructs long-term action to address climate change. You cannot ask people who are struggling to find enough to eat today to worry about what happens to the planet tomorrow. Worrying about climate change is a luxury you can only afford if your immediate needs are met. Yet more and more people, including right here in Switzerland, struggle to make ends meet and risk falling into poverty.

This means that we need to pay attention to rising inequalities. Eight men (because they are men, not women) hold the same wealth as the bottom half of humanity. Entire regions and countries fail to catch up to the waves of progress, left behind in the Rust Belts of our world.

When we talk about inequality, we also need to talk about gender. According to the latest estimate by the World Economic Forum, if we continue along current rates of change, we will only achieve gender parity in the year 2234. Structural inequalities, patriarchal attitudes and a culture of chauvinism together rob all of us of tremendous opportunities. Just consider that if women participated in the labour force in the same numbers as men, GDP could increase by as much as 5% in the US, 27% in India, and 34% in Egypt, to name just three examples.

And speaking about growth, the global outlook may finally be improving, but the benefits are not equally felt. Compounded by technological disruption – which makes many sectors of the economy far more capital-intensive than labour-intensive – how are we going to create the almost 500 million jobs needed in Europe alone to meaningfully reduce the number of unemployed young people? Mass unemployment – particularly among the young – is a dangerous seedbed for discontent, perhaps even radicalization. For the loss of work is not only a loss of income; it’s a loss of status, of dignity, of purpose in life. It frays our social fabric. It undermines trust in the governance of our society, fanning the flames of populist outrage.

So why, if today’s world is marked by such a pervasive sense of unease, strife, and uncertainty – why did I say at the outset that we are also living in the most creative of any time in history; that I am, despite it all, hopeful?

For one thing, because now is in some sense the best time ever to be alive. Ask yourself this: If you could choose to be born at any time in human history, which era would you chose? Choose today, and you would be less likely to be living in poverty; less likely to be illiterate; less likely to die of diseases or be killed in a war; and less likely to live under autocratic regimes than at any time in human history.

You would have to go back hundreds of years to find a similar period of great power peace. The number of people who have died as a result of war, civil war, and, yes, terrorism, is down 50% this decade from the 1990s. It is down 75% from the preceding five decades, the decades of the Cold War, and it is, of course, down 99% from the decade before that, which is World War II.

Meanwhile, poverty has been reduced more in the past 50 years than in the previous 500 years. And much of that reduction has taken place in the last 20 years. The average Chinese person is 10 times richer than he or she was 50 years ago – and lives for 25 years longer.

90% of all scientists that ever lived are alive today. And to understand the astonishing pace of progress we are experiencing – just consider that your cellphone has more computing power than the Apollo space capsule.

The point I am trying to make by juxtaposing the challenges with these incredible stories of human achievement is straightforward: We are not predestined to live through chaos and decline. Human actions matter. Your and my actions matter.

What we need is a plan. A plan that addresses the root causes of these challenges, that integrates peace, sustainable development and human rights in a holistic way, from conception to execution.

So if you ask me why I am hopeful, it is because we have that plan:

The Agenda 2030 for Sustainable Development. Adopted by all 193 member states of the United Nations, it is the most ambitious development agenda in human history.

With 17 Sustainable Development Goals (SDGs for short) and 169 specific targets, all of us have a roadmap for inclusive, sustainable and fair globalization.

They address everything from ending poverty (Goal 1) and achieving gender equality (Goal 5) to decent work and economic growth (Goal 8) to the rule of law (Goal 16).

The goals are unique because they call for action by all countries – poor, rich, and everything in between – to promote prosperity while protecting the planet. They recognize that ending poverty must go hand-in-hand with strategies that build sustainable economic growth. They cover the spectrum of social needs from education and health to social protection and job opportunities, while tackling climate change. They are integrated and indivisible. They balance the three dimensions of sustainable development: the economic, the social and the environmental. They do not leave anyone behind.

Achieving these goals would create a world that is comprehensively sustainable: socially fair; environmentally secure; economically prosperous; inclusive; and more predictable.

The plan was adopted in 2015 and we are now well into implementation.

In fact, much of this implementation actually happens right here, in Geneva. Home to over 100 international organizations, 178 States representations, some 400 NGOs, and a dynamic private sector and renowned academic institutions – Geneva is the operational hub of the international system.

It is right here that humanitarian relief for victims of floods, earthquakes or conflicts is coordinated; that responses to environmental challenges are devised; that the fight against deadly diseases is coordinated; that governments come to negotiate agreements on trade, disarmament and conflicts.
But the impact is even more direct. In fact, the work done here in Geneva touches every person on this planet, in any 24-hour period.

I mentioned the computing power of your phones earlier, so let me just return to your phones for a moment and unravel its links to Geneva:
̶ The dialling codes for international calls are allocated through the International Telecommunications Union.
̶ The phone itself, as well as its components, can be traded globally thanks to the rules and practices agreed by the World Trade Organization.
̶ Possible health risks associated with using mobile phones are monitored by the World Health Organization.
̶ The rights of workers who assembled your phone are protected through the International Labour Organization.
All the organizations I just mentioned are based in Geneva.

By the way, what’s true for Geneva, is true for the UN globally: There’s more than meets the eye (or perhaps: that hits the headlines). As we speak, the United Nations:
̶ Keeps the peace with 117 000 UN peacekeepers in 16 operations on 4 continents.
̶ Provides food and assistance to 80 million people across 80 countries.
̶ Assists some 67 countries a year with their elections.
̶ Supplies vaccines to 45% of the world’s children, helping save 3 million lives a year.

Now you wouldn’t know any of this from reading the news. Good stories, after all, rarely make the headlines. The UN needs to do a better job at communicating with the public – and this includes the business community – just how relevant its work is. This is why I started the Perception Change Project here in Geneva, which tries to do exactly that: change the perception and broaden the understanding of the UN. Understanding is great, but not enough. What we need – and this brings me back to the Agenda 2030 – is engagement. Engagement and buy-in by everyone. Including you. Including the private sector. Including, crucially, financial services.

Think about what finance achieves, if done right: it matches long-term savings and investment, financing the infrastructure essential to productivity.

Finance will make or break the whole endeavour. Why? Because recent estimates show that to achieve the SDGs by 2030, we will need an additional USD 2.4 trillion in investments per year. Investments in low-carbon infrastructure, in energy, in agriculture, in health, and in education.

Public funding cannot close this gap. Not even close.

So here is a challenge. But more importantly perhaps, it is also a tremendous opportunity.

Right now, there’s more than USD 9 trillion invested in negative interest rate bonds; USD 24 trillion dollars in low-yield government securities; and USD 5 trillion dollars sitting in cash, waiting for better investment with higher returns.

Now consider this data point: According to the Business Sustainable Development Commission launched at the Annual Meeting of the World Economic Forum last year, achieving the SDGs would open up at least USD 12 trillion in market opportunities. And that is actually a modest assumption if you recall what I said earlier about how much achieving the single goal of gender equality could contribute to US, Indian and Egyptian GDP growth.

The point is that taking an SDG lens to your investment strategies is a triple win:
̶ First, it’s the right thing to do. Recall the challenges I outlined at the start and you have to admit that business as usual is not an option.
̶ Second, it’s the commercial thing to do. Markets bring the future forward, but the financial impacts occur immediately. While the combined market capitalisation of the top four US coal producers has fallen by over 90% since the end of 2010, businesses that have taken action to align with the SDGs have enjoyed 18% higher returns on investment.
̶ Third, it’s not that difficult to do. The SDGs give you a scorecard on which to judge how businesses do from a sustainability perspective.

There is obviously much more to say on this but let me stop here and open it up to your questions and comments.

Thank you very much.