DAVOS: Are Institutional Investors Prepared for THE GREAT RESET?
Posted on 01/18/2021
A contingency of policymakers, near-monopolistic tech companies, and large corporate CEOs are pushing for The Great Reset agenda. According to the World Economic Forum’s page on The Great Reset, it says, “There is an urgent need for global stakeholders to cooperate in simultaneously managing the direct consequences of the COVID-19 crisis. To improve the state of the world, the World Economic Forum is starting The Great Reset initiative.”
The highly-anticipated Davos event will be held on January 25-29, 2021. The WEF is an influential conference of business leaders, activists, policymakers, institutional investors, and corporate CEOs.
In many instances, the spread of the Wuhan coronavirus (COVID-19) upended markets, shifted political alliances, crushed small businesses, while expanding the balance sheet of Western central banks. Furthermore, the crisis has financially benefitted large tech companies like Amazon.com, Inc. and larger retailers vs. restaurants, the travel industry, smaller retail operations, and the live entertainment industry.
Will the WEF’s vision of the Great Reset happen or at least parts in the next decade?
Great Reset of Capitalism
In a June 3, 2020 post on COVID Action, Klaus Schwab, Founder and Executive Chairman of WEF, put out a statement saying, “COVID-19 lockdowns may be gradually easing, but anxiety about the world’s social and economic prospects is only intensifying. There is good reason to worry: a sharp economic downturn has already begun, and we could be facing the worst depression since the 1930s. But, while this outcome is likely, it is not unavoidable.
To achieve a better outcome, the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a “Great Reset” of capitalism.”
With the COVID national lockdowns, the price of oil stumbled even further, thus institutional investors heavily allocated to oil companies like Chevron, ExxonMobil, or BP have faced hits in their equity portfolios, while listed large U.S. and select China tech companies witnessed market cap growth during 2020. The Net-Zero Asset Owner Alliance (AOA), a United Nations-convened alliance of large institutional investors, was established in 2019. The Alliance was initiated by Allianz, Caisse des Dépôts, La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark, and SwissRe. Since then, Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand, and Zurich have joined as founding members. Net-zero carbon emissions will be a major theme being prodded by both policymakers and corporate CEOs. This trend is already happening on the institutional investor front, on investors plowing more capital into renewables such as wind, solar, hydrogen, and battery storage. Furthermore, electric vehicles were a popular sub-industry in 2020, witnessing rising share prices of Tesla, Inc., Nio, and other EV makers. Sovereign funds have already been major backers of EVs. For example, Saudi Arabia’s Public Investment Fund is a major financial investor in Lucid Motors, while Mubadala Investment Company invested in Xpeng Motors.
Travel and Digital IDs
There is a mad scramble to build apps in regard to vaccine passports. Already governments and tech companies have been using contract-tracing apps and programs. Apple Inc (AAPL) and Google (parent company Alphabet) partnered to create a bluetooth-based system to notify users if they’d been exposed to COVID-19. According to the WEF website, “Denmark is creating a digital COVID-19 ‘vaccine passport’, to be rolled out in the first few months of 2021.” Vaccine documentation could be a requirement for people to enter a country via airplanes. In 2020, the World Health Organization (WHO) disclosed it was working on an e-vaccination certificate, a “smart yellow card” or digital version of the yellow vaccine booklets used in many countries. However, there is pushback among privacy advocates on a digital ID system and putting medical records in the hands of governmental authorities and employers.
Keywords: California Public Employees Retirement System.
Notes: “Davos Man” is a neologism referring to the global elite of wealthy (predominantly) men, whose members view themselves as completely “international”.