Why is this year’s World Economic Forum important and what have we learned since the last one in 2020?
Laura M Cha: The World Economic Forum in Davos means many things but this year’s event has a special significance after a two-year Covid-induced hiatus: it signals that the world is gradually returning to greater sense of normality after the widespread disruption of the past few years.
At this year’s event we will ask ourselves how have we grown, what have we learned and how can we apply our experiences to create a better, more sustainable future.
I believe that the pandemic has taught us three main lessons.
First, that mutual trust between individuals, communities, corporations, countries and governments is essential to achieve the change we want to see.
Second, that tackling global challenges like the pandemic and the onset of climate change requires connections, unity, partnership, collaboration and a whole-of-society effort.
Thirdly, that the resilience we seek in our societies and economies depends on the investments we make and the institutions we build now.
The World Economic Forum is a vital opportunity for leaders from around the world to connect, reflect on these lessons, discuss solutions to global issues, and identify the steps we need to take to create a more sustainable and prosperous world, and I am looking forward to being part of the debate this year.
How can capital markets create a sustainable future?
Laura M Cha: Society is looking for trusted role model to help drive and define the speed of action on climate change, determine acceptable standards of corporate governance and to set actionable plans on everything from diversity to decarbonization.
Capital markets operators and regulators all over the world, including HKEX, therefore have a vital role to play in creating a sustainable future – our visibility and reach is broad and with this comes a responsibility to lead from the front. We must put purpose into practice.
Firstly, we need to develop a sustainable finance ecosystem to connect capital with opportunities in the ESG space. Creating platforms to provide information, access, and transparency on a wide range of sustainable, green, and social investment products, like green bonds, can be an effective conduit linking investors and issuers. This will help channel capital to fund the net carbon transition.
Secondly, capital markets must play a role to promote ESG awareness, enhanced regulations, and high standards of responsible corporate governance by advocating for and introducing strong ESG disclosures. As the investment world grows more exacting in its expectations of companies’ ESG performance, the standards that capital market regulators enforce around disclosures can eliminate greenwashing and provide the transparency that investors need to match their investment goals with ESG opportunities, which in turn can provide the capital to drive the net zero transition.
Thirdly, by walking the talk on sustainability and encouraging new ways of thinking and operating, we as regulators and participants can lead by example on ESG disclosure and reporting.
In areas such as promoting diversity and inclusivity around gender, families, and LGBTQ+ in the workplace; supporting employee wellness with internal wellness workshops and external activities; and invigorating our communities through meaningful philanthropy that drives societal change.
To read more from Laura, check out her World Economic Forum Blog here.
Why does connectivity matter?
Nicolas Aguzin: The world needs more connections, not less and our key priority now is to keep dialogue and connections going.
As a superconnector between East and West, our role at HKEX as an exchange is to operate resilient, well regulated and competitive capital markets, facilitating the two-way flows of capital, ideas and opportunities between different regions, helping to fuel the post pandemic recovery.
We are seeing encouraging signs of progressive partnerships and collaboration in some key areas of the global agenda, most notably on climate change and the fight against Covid.
Hong Kong, and HKEX will continue to be very relevant in the year ahead – helping to promote better connectivity and understanding between companies, countries and markets; funding businesses of the future, powering innovation, promoting the sustainable finance ecosystem, creating jobs, and supporting communities that fuel the global recovery.
What links capital markets and innovation?
Nicolas Aguzin: From our vantage point at the heart of global capital markets, we are seeing the companies of tomorrow come to the fore.
These are the organisations that are creating and pioneering new technologies and world-changing innovations – such as those creating life-enhancing and prolonging drugs, those supplying the sophisticated infrastructure for today’s modern and connected cities, and the organisations supporting the critical shift to clean energy. We believe they will be the change agents of our collective future.
The companies of tomorrow often need to access public funding at an early stage in their development to support their ambitious plans. Similarly, investors are often on the lookout for early access to high-growth prospects.
The combination of these two presents a unique opportunity for market operators.
As the new world takes shape, well-functioning, deep and vibrant capital markets have an essential role to play as a vital conduit to allocate capital to companies with promising prospects, support entrepreneurs, inspire innovation, power world-changing technologies and products, and generate opportunities for investors.
Source: The Stock Exchange of Hong Kong