 Good morning. Good afternoon and good evening, depending on where you are joining us today. Welcome to this discussion. I am Andre Belliou with the World Economic Forum. I'd like to first of all thank and welcome all of our four members joining us via top link, but as well to all of you who are joining us live streaming on our website around the world. Today's panel discussion will take place in two parts. We'll have a 30 minute public panel that we are recording, which we'll follow shortly, and then a private dialogue for four members via top link that will happen immediately following that. The COVID-19 pandemic is the latest reminder that we face a series of risks that are increasing in both frequency and severity. Building greater resiliency to these risks, whether they relate to climate change, technology, cyber, security, pandemics, social unrest, etc., has become more important than ever to build a more resilient, prosperous, and sustainable world in the future. Today's discussion, reassessing corporate risks and reinforcing resilience in the post-COVID world, will focus on how stakeholders can deliver against this imperative, and in particular the vital role that the private sector can play. This discussion will build on several initiatives that the forum has been undertaking over the past year to identify solutions, partnerships, and frameworks that will allow our economies and societies to confront future shocks on sounder footing. Our annual global risk report, for example, which you may have seen was published last week, that identified societal fractures, environmental degradation, and geopolitical fragmentation as some of the main risks facing us in the year ahead. Our COVID-19 financial services response network, industry groups like our insurance and asset management industry action group, which have looked at action plans and concrete measures that different sectors can take in order to build greater resilience, and you'll find some of these reports on our website. In addition, our transformational investment initiative in partnership with the institutional investor community that looks at collectively how the institutional investor community can champion long-term thinking and to constructively tackle complicated problems all while pursuing attractive risk-adjusted investment returns. And finally, last but not least, the Coalition for Climate Resilient Investment, a COP26 flagship initiative, multi-stakeholder across the private sector and the public sector, looking at how we can better factor in physical climate risk into all of our investment decision-making, particularly over the next decade of delivery of the SDGs. So this is a very important topic. It's one we're discussing quite a bit, and it's also a very complicated one. And for that reason, we are thrilled to have with us today a distinguished panel to talk through many of these issues as we're facing them today. And we're also thrilled to have Hugh Vanstein joining us today to moderate today's discussion. Many of you will know Hugh from his time at the Bank of England. Currently, he is the Group Managing Director, Chair of Sustainable Finance and Senior Advisor of the CEO at UBS. So with that, please let me turn it over to Hugh. Hugh, thank you for joining us and moderating today, and we look forward to a great discussion. Thank you, Andre, and welcome to you all for this outstanding panel. As Andre said, reassessing corporate risk and resilience. It's today's world of rapid change, whether geopolitical, tech disruption, or risk like the pandemic, no company can prepare for every contingency. The risks are simply too varied, interdependent, and difficult to prioritize, and I think that's why I'm very delighted to have such a terrific panel to try and sort through the existential risks from the operational ones to think how we build resilience, and how we also think about bringing investors and stakeholders with us. Some of the topics I think we're going to try and unpick in the next 30 minutes are how big a risk is climate change, and how best to manage the transition to a net zero economy, how challenging is tech disruption, cyber risk, how the geopolitical fault lines that we need to be worried about, or are there things which are really in front of us, like the inequality crisis or the looming pensions crisis? So I'm really delighted, therefore, to have such a great brains trust. Dambisa Moyo, global economist at Malstorbrug, Mario Greco, Chief Executive of Zurich, and John Haley, Chief Executive of Willis Towers Watson. Dambisa, let me start with you. What are the big risks on your mind for corporates as we head into this, hopefully, post-COVID economy? Well, thank you so much. I'm delighted to be able to participate in this panel. What I think is really critical for people to understand is that even before COVID hit in earnest in 2020, we were already in a pretty precarious place. First of all, because of a low growth environment, which has not changed. In fact, one could argue that it's been catalyzed by what has happened in the last 12 months. But in addition, we were in an environment in which public policy had been largely become impotent. Monetary policy in very large important regions of the world, like Europe and Japan, was already in negative rates. But also we were struggling with debt and deficits in the aftermath of the financial crisis. And then of course, there are a whole slew of factors such as climate change and income inequality, the risk of technology and the jobless underclass, issues around natural resource scarcity, and the sheer amount of debt that the global economy, but more specifically households, corporations, as well as governments, was carrying before COVID hit. We've now been put in this very, very urgent position where I think my deepest concern from corporations is where do you allocate capital in this sort of environment? We know the arguments and the concerns that corporations have tended to pay out dividends. If you look at the dividends to retained earnings ratios, it hit as high as 100%. In other words, they're not reinvesting or investing in the future anywhere near as much as we would like to see. But beyond that, companies have been trying to navigate this tension between the traditional view of financial shareholders being primacy and thinking more strategically about how they can earmark capital in a world in which stakeholder capitalism becomes much more predominant. So there's a whole confluence of factors. These are really deep-seated factors that traditionally we thought of as being long-term. But obviously, now, in addition to just trying to stay afloat from a financial and operational perspective, these issues have become very much front and center to boards and corporations at large. Thanks, Tambisa. Maybe, John, maybe I'll come to you next. As you frame these issues, what are the big risks on your mind for corporates? Yeah, so thank you. And just following up on what Tambisa just said about how these risks are becoming front of mind for corporate boards and for management teams. Let me just go back to right pre-COVID. Aion has been doing this global risk survey for decades. And when you look at that global risk survey of the top 10 risks they have, about half of them are ones that I think by any measure were not insurable. By the way, if you look at in 2019 where pandemics or health crises ranked, they were number 60 among top corporate managers. So it gives you an idea of how people thought about that. But going into 2020, we found 24% of respondents said they quantified their top 10 risks, only 24%. Only 20% used risk modeling, 10% said they had no formalized process in place to identify risks. And I think what has happened with COVID and the impact of that is it has changed the way corporate boards and it's changed the way management are beginning to think about this. Resilience is no longer something that is a side light. It's going to be one of the key things that a CEO and his management team is charged with thinking about. And so they're going to have to do more work in terms of identifying this, in terms of modeling for it, particularly scenario modeling. And I think boards are going to want to hear more about this. The way I tend to think of this is that in the past resilience was just a cost. You could invest in it and it was cost. I think increasingly it's going to be looked at as an asset. Because these long tail risks that we're talking about, nobody can know specifically what the impact is going to be. And what you're really going to have to do is build an agile and a flexible organization that can adapt to these different things. And that's nowhere more true than in climate. I think one of the other consequences of the pandemic and particularly lockdowns is that it has forced people to think about these large scale changes that affect all of society at the same time. Climate is chief among them. And I know one of the things we're going to talk about is the role of the private sector and working with the public. But a private public partnership is the only way to tackle climate risk. Thanks, John. So Mary, if I come to you now as well, just to open up, how do you see the large risks? Obviously, John picked up some of these risk-run insurable, running a large insurance company. Fascinating to hear your perspective. I very much agree with the visa that COVID hasn't changed. The things that we were living before COVID or the fractures exist today. Actually, I think COVID has given us a good way to look at the solutions. Because during the past year, what we did is we acted together, private and public, between individuals and governments. We tried to tackle the issues and we tried to find the proper solutions. Now, at Zurich, we tend to think about the situation we're living in as if we have three challenges ahead of us. One is climate. The other one is the future of work and the sustainability of the labor contract with everyone in the world. And the third one is the cybersecurity, our capabilities to drive technology in a safe way. And we're trying to contribute to the communities and to the societies for each one of these three axes. But also, we're working with our customers and employees trying to support them, overcoming the challenges of these three risks. Again, as COVID has demonstrated during 2020, we cannot outsource the solution to governments. It's just too complicated and just too, it takes a long-term vision to address these issues. And governments typically don't have it. But neither the private sector can resolve decisions by ourselves alone because we do not have the capacity and sometimes we do not have the resources to do that. And so the model that has been used of working together and caring each one for the good solution is the one that should be also used in the future. Thank you, Mario. John, both Mario and yourself picked up as climate is one of the key topics to think through as to risk management. And I know you've written a lot about embedding risk management to organizations. How are you advising corporates on embedding risk management around climate transition? So as we think about climate, I think we've moved from physical climate risk only to thinking about climate risk in three areas. One is the physical climate risk, which is the severe weather-related longer-term shifts in climate, rising sea level, et cetera. The other is transition risk. So as we shift to the net zero economy, certain sectors may face some shifts in asset value or higher costs to doing business. And then the third is liability, active litigation from individuals, new areas of the laws being developed, et cetera. And we think that corporations need to address all three of these issues. And in fact, particularly for the insurance industry, I think we need to work with our clients to make sure that they are able to handle all three of those. We've done a lot of great work on the physical climate risk. I think enabling the transition is going to be very important. And I think insurance has a critical role to play there. I might just mention that Andre at the beginning mentioned the Coalition for Climate Resilient Investment. And I'm the chair of that, and we're working with the World Economic Forum as part of that. But the focus we have there is on developing some standards for investment in resilient infrastructure. And the theory of the case there is that just as the test force on climate-related financial disclosures said that if you don't disclose some of these issues, you won't address them. And you can miss the downsides of that. What we're looking for is actually there's opportunity and upside in investing in resilient infrastructure. And until we get those opportunities recognized, we won't get as much resilience built into infrastructure as we should. And so for example, we have a hurricane hit Puerto Rico and devastated. If we had invested a fraction of what developed countries will give an aid to Puerto Rico after that hurricane in resilient infrastructure in the beginning, we wouldn't have had nearly the disaster we did. And so we're working on developing those kinds of standards. It's a true public-private partnership. Thanks, John. I mean, Dan Beeser, I think John Mason very much has a voice about it's as much political as economic. And as my boss, Mark Carney said, there may be three and a half trillion dollars to invest in clean infrastructure each and every year. As you advise investors, how are you weighing up some of these issues for corporates? So I think if we take a step back, I have been serving on corporate boards about 10 years now. And over this period, there's been a transition in the way we think about these things. By that, I mean, you know, we used to think of CSR as sort of a ring-fence thing that you did as an afterthought. We then said, well, hang on a second, we need to integrate this into how we run our businesses. So we started doing much more reporting, but very often still in a sort of siloed, separate reporting document. It's moved much more into being an integrated way of the way businesses think about operating. But I think the more important point, and I do understand that the title of this panel has the word risk in it, is that we need to start thinking about opportunities. Where is the upside for global society, but also for corporations in terms of managing our balance sheets and allocating capital in this whole green debate? And I think really most critically, I believe, is that as corporations move from the sort of financial shareholder primacy into stakeholder world, we need to bring the whole thinking around trade-offs into the debate. So where climate change is concerned, it is absolutely the case that we need to continue to think about COP26 and the risks associated with doing nothing or doing little. But at the same time, we need to remember that there are 2 billion people out there who got no access to energy in a reliable and cost-effective way. And this is not just in the poorest of society, but also in middle-income countries. So I think, yes, we need to focus on those risks, and they are absolutely critical, and they do need to be solved in a more cooperative way in society coming together and figuring these things out. But at the same time, we should not lose sight that this is just not a risk proposition. It is also one in which we need to think about the upside opportunities for transforming our businesses and operations so that we can garner upside in the space. Dan Bezier, I think that is a great point. I mean, Mario, can I come to you? You mentioned of your three big blocks, energy transition, climate transition, as well as them. How are you advising companies? And how worried are you also about insurance gaps and how we deal with those? The efforts, I mean, first of all, we've been ensuring catastrophes in climate risks since decades ago. And so we're prepared to keep doing that, and we're prepared to support customers and help them cover with the consequences of climate. The most important thing, though, it is to anticipate and create resilience in the system. So last year, even in COVID situation, we launched in September a resilience service where we advise customers how to better prepare and how to minimize the impact or how to strategically look at their supply chain, their business organization, ways to deploy capital to be prepared to manage any climate risk on their premises. I think that's the way that we have to go in the future. It is creating stronger resilience in the industries and helping the customers being prepared. And I think that the oil insurance industry will come along on that and will contribute through this in creating stronger industries. Thank you, Mario. John, I thought about what Mario said about building resilience was really important. As a CEO of an incredibly large organization, how do you yourself think about building resilience and adaptability in your own firm? Yeah, thanks, Yu. I agree. That is critically important. One of the things that we look at is scenario testing. As I mentioned earlier, we think that scenario testing is the key to understanding resilience and understanding how can we build in flexibility to deal with different situations? Because the key to resilience is not anticipating every possible thing and getting all of your predictions right. The key to resilience is understanding what kind of flexibility and agility you need. And so we think about those kind of scenarios and try to work on those. Of course, having said that, I will tell you, like anybody else, we didn't predict the pandemic and the kind of consequences that that would have. We would have rated that a much lower risk, maybe not 60, but it wouldn't have been in our top 10. And so that actually reinforces the need for continually rethinking and testing your assumptions about resilience. I think it's a really important point, John. And I think the stress testing in particular is something which I feel passionately about having helped shape the climate stress test for the Bank of England. Demi, can I turn to you? I know you've got a book coming up soon. And so I was wondering if you could give us the where for your first sneak peek of some of your lessons, but it's about how boards can work best on a chaotic world. Maybe you could share, if you don't break your advance, you could share some of those lessons. Yes, sure. So as I mentioned earlier, I've served on corporate boards for about 10 years now, and I've been really fortunate to have exposure to many different industries. So I'm on the board of an energy company, industrials, banking, consumer goods, but also in different regions. And I think really the book is essentially trying to help people understand what the mandate of the board is. Corporations are critically important. In the United States, the Fortune 500 employ 30 million people. They are two thirds of US GDP. So they're really important in terms of innovation, R&D, tax base and infrastructure, which was mentioned earlier. And so I'm trying to explain what boards do in terms of being at the helm, but also how they should be thinking about the swath of challenges that we've addressed here, both in terms of risk and uncertainty, risk being what we can measure and put some probabilistic estimates around and uncertainty, as John just mentioned, things that perhaps we put on the tail risk and we haven't thought about. And really just in conclusion, the book actually recommends some ways and some proposals for us to think about how to improve corporate boards and ultimately corporations to address the big challenges that we're addressing right now, from de-globalization to pandemics and really thinking about more ethical challenges that the boardroom is facing. Mary, one of the interesting things about resilience is how much the markets and investors are starting to try and get their hands around the sustainability and resilience of firms. As a seasoned investor, what do you think investors need from here and where's the work still to be done? I think we all need to explain how we will transform the current economy into a decarbonized one. And we haven't been able yet to lay any vision, any description for this. Now, COVID again gives us an enormous opportunity to think about and to do it. I mean, the amount of liquidity of available investments which has been created in US, in Asia, in Europe, it allows us really to think about how to better make use of it. We haven't done that yet, but this is probably the most important thing that we got to think and we got to resolve now. Investors also ask us about, not just about climate, but also what we're doing for this society. And I just want to repeat that corporations today have not just the duty, the obligation to look at the sustainability of the planet, but also to fight the imbalances in our societies and to act to create security and to create stability in the way we use technology. It's a world in transformation. It started off as the business said at the beginning, well before COVID. This transformation is far from being finished and it requires a lot of transparency, but a lot also of efforts in order to achieve it. Thank you, Maria. John, obviously you're running one of the world's largest investment advisory firms. How do you think we can, corporates can help give the disclosure to give that confidence and the missing pieces? Yeah, so it starts with a couple of things. First of all, it really starts with the board and understanding that they have a responsibility, the responsibilities that Mario just alluded to, the societal responsibilities, and they have a responsibility also to the right kind of disclosure to putting the right kind of programs in place. And so the board has to do that. I think a corporation should be articulating what its mission is, what its values are, how it's going to do that, how it's going to deal with its stakeholders and be responsive to them. We also need, the board should really be putting in place metrics for the CEO and the management team so that these are not just words written on a piece of paper, but these are actionable items that they're measuring them for. And I think as investors and as we look at potentially investing in organizations, we're looking for corporations where the board and the management team have taken on and identified those responsibilities. Thank you, John. And Dan Beeserman, obviously you and I both sit on an investment committee, which is very committed towards a net zero transition. I was interested, were you advising investors, assessing corporates, how are you helping them think through what they should be spotting? Well, I think that a lot of the comments have been made in some form here. First of all, we have risk mitigation responsibilities. And by that I mean, we shouldn't be thinking about throwing the proverbial baby out with the bathwater. We do need to think about risk mitigation, but at the same time we need to think about where opportunities, real new opportunities may stem from. So if we think about the post-COVID economy, it's definitely going to have a slant towards green. There are big campaigns going on right now to make sure that that's a pivotal piece of the future. So clearly we're moving into that space. But as I mentioned earlier, I think it's naive and actually there are enormous second-order effects. And I'm sure my colleagues who are certainly Maria, who's in the insurance area, will have perspective on these second-order effects that if we don't think about them, could come back to bite us. So something like climate change and net zero and these types of targets, critically important to help frame the discussion and indeed to help us move towards a better world. But we can't lose sight of second-order effects such as disorderly migration, economic collapse, the inability for people's human life to progress in terms of living standards. I mean, if you look at the World Bank numbers that 150 million people have slipped back into extreme poverty during COVID, we need to bring that whole picture to the debate around climate change and not view it as a sort of unilateral yes and no. And perhaps the last thing I'll just say is that as someone who serves on the board of an energy company, I'm very heartened with the discussions and the metrics and the assessments in terms of compensation and promotion that we are doing with respect to our management teams. And we are listening and there's a whole slew of investments, whether it's in biofuels and geothermal batteries, renewables that we're looking at to place the approach that has been dominant for years in the past. So we should be optimistic, we should come to these problems with optimism and energy and try to be as constructive as possible as we solve them. Thank you Dambisa. Well, I'm conscious that we're coming to the end of our public session, our 30 minutes of public session. I think that was an incredibly rich conversation. I'd like to thank Mario, John and Dambisa. I think what I particularly took away was the importance within resilience of adaptability. We're not going to fail forecast every risk. We need the ability to be made of rubber bands rather than just rock. We need the ability to bounce back. And I think John's point about scenario analysis. Mario's point also about assessing the risks and what's in struggle and what's not. And as Dambisa said, it's also bringing investors along with us on this journey that there is a rich set of opportunities rather than risks. I think were some of my takeaways from what I thought was a really exceptional panel. So with that, I'd like to thank everyone.