Recent growth in the world economy has widened economic and social disparities and inequalities, while cost-conscious companies have been unwilling to tackle the urgent challenge of fighting global warming.

How should businesses and citizens respond to these consequences of excessive capitalism?

The question will be a main topic of discussion at the annual World Economic Forum, also known as the Davos Forum, scheduled for January. World leaders in business, politics and academia will gather in Davos, Switzerland, to discuss various global problems, such as the environment, terrorism and poverty.

Borge Brende, president of the World Economic Forum (WEF), a Swiss-based nonprofit organization that has hosted the forum, recently spoke with The Asahi Shimbun about the roles and responsibilities of global companies and citizens in rectifying economic disparities and environmental problems.

Excerpts from the interview follow:

***

Question: What do you think about the world today where the richest 1 percent own almost half of the wealth on Earth?

Brende: I think, going forward, we will need to make sure that economic growth is more inclusive. It has to be creating more jobs and it also has to be more sustainable.

But we should not forget that, if you start in 1990 and compare it to today, there were 5 billion people on our planet in 1990 and more than 40 percent lived in extreme poverty. Today, we are closer to 8 billion people and 12 percent live in extreme poverty.

So, overall, globally, we have seen poverty eradication that is unparalleled in the history of our planet. But globalization has led to a situation where traditional industrialized nations also compete more (in terms of) salaries with … emerging economies and developing countries.

That has led to increased pressure, especially on unskilled, blue-collar workers in traditional industrialized countries, where we have seen that, for example, the income level has not increased over the last decades, and this is something that has to be addressed seriously.

I think, though, that there are clear examples also in the world that it is possible to have an open economy, social market economy and (ability) to fight inequalities without hurting growth.

Look at the Nordic countries. Altogether, an economy of a little bit less than 30 million (people). These countries have been able to be very competitive, but still they’re very agrarian countries, where we have not seen an increase in inequalities.

But then, I think, if you’re going to address inequalities, you also have to have domestic policy that addresses this. You have to be willing to use domestic tools like access to education for everyone, health care, but it is also about being willing to use the tax system in addressing inequalities.

ON CORPORATE RESPONSIBILITY

Q: Why do you think the wages of low-skilled, blue-collar workers haven’t increased while management and only a handful of stakeholders own a huge amount of the wealth? Is it because of the social system, people’s ego or greed?

A: I think there is a combination of reasons for this.

I think this is also something that resonates well in Japan, that a company doesn’t only have a responsibility towards its shareholders but the company also has huge responsibilities towards the employees. But not only the employees but also the society the company operates in. So it has a responsibility to all stakeholders, being employees but also being society at large.

And I think some of the challenges that we have seen in the last decades is that this has not been on the top of the agenda. And I think that we will need to again remind companies that they need to be also very conscious about the bigger responsibilities (they) have.

Q: What kind of message do you expect to send at the forum next year to bring out more fairness in society?

A: As I said at the beginning of the interview, you also have to be willing to use the domestic tools that are available. You have to be willing to address the redistribution issue.

If you want harmonious societies and stable societies, I think you have to be willing to address the issue of a progressive tax system, where the taxes increase according to your income.

I think you also have to be willing to (push) issues like fortune tax, like a wealth tax. I think you have to be willing to take that discussion.

Q: What can business entities and citizens do to achieve such a society?

A: I think we can also learn from Japan here, where the leaders in the company have a lot of responsibility, so they will have higher salaries. But in Japan, you also see that there is more of a discussion where the salaries of the CEOs are not, like, 30 times, 40 times, higher than the other people in the companies.

Being a leader comes with a lot of responsibilities, but there also have to be certain limits.

ON GLOBAL WARMING

Q: Excessive capitalism is partly to blame for environmental problems. What do you think consumers should do to tackle environmental issues in the future?

A: To put it very economically, I would say that we need to internalize the externalities that are caused by your behavior. So, if you emit a lot of CO2, we should put a price on CO2 emissions.

I think we need to use the market economy in the service of the environment and not the opposite.

Q: Can you give concrete examples of how consumers can change their actions?

A: I think that the consumers have a lot of power. I think consumers are becoming more and more conscious about plastics (and) also about, for example, buying cars. We see … an explosion in (the number of) electrical cars. So sometimes consumers are more progressive than the leaders.

Q: Greta Thunberg, a Swedish teenager and environmental activist, gave a presentation at last year’s forum, demanding world leaders do something about climate change. She was praised by many but also criticized by some.

A: She has a strong message on behalf of the next generation, that the next generation doesn’t want to inherit a planet that is getting hotter and hotter.

Even with the former Kyoto Protocol and now the Paris Agreement, we were supposed to see CO2 emissions going down, but it’s still going up.

So it’s also necessary to “walk the talk,” and so far it’s been too much “talk” and too little “walk.”

I think she’s a reminder of our responsibility to also try to make sure that the next generation inherits a planet that is in better shape than what we inherited.

Currently, that is not the fact. Currently, we are not on a sustainable track when it comes to climate.

That will be one of the main topics at our annual meeting: sustainability and climate change. But also nature in general because we are seeing a situation where we are faced with the depletion of many species.

One million species are being threatened, and this is due to human activities. And once a species goes extinct, it’s gone forever.

(This interview was conducted by Takao Shinkai and Atsushi Okudera, senior international correspondent.)