The World

By Gillian Tett

When the World Economic Forum published its annual risk assessment report earlier this month, it featured a fascinating detail: for the first time ever, the issue of “income disparity” featured on the list of risks that WEF members expected to see this year.

More startling, this risk actually topped the list, beating out issues such as financial collapse, fiscal crisis or environmental issues. Welcome to a theme that I expect to crop up repeatedly in debate this week in Davos.

As the annual WEF meeting gets underway, the Occupy Wall Street movement has not yet stormed any cocktail parties (although I am told that protesters have built an igloo). But the issue of social and political protest is creeping into debate, even amid the canapés and wine.

On Tuesday night, for example, I chaired a FT dinner which featured a panel of fascinating business leaders: Dennis Nally, chairman of PWC International, Daniel Vasella, chairman of Novartis, Keith Weed, chief marketing officer of Unilever and TK Kurien, chief executive of Wipro. Nally kicked the discussion off by outlining the findings of the annual Davos PWC survey of business leaders, which pointed out a curious pattern.

During the last year confidence among chief executives has apparently plunged, as many fear that the macroeconomic outlook looks dangerously uncertain. On a micro level, however, many companies say that their own operations are going quite well. In other words, even amid individual company success, the world seems a scary place.

Why? It might be tempting to point the finger at the euro (and, yes, those euro woes and Greek dramas will certainly dominate Davos debate). What came out of the FT panel debate is that the malaise actually has much deeper roots: businesses fear that that the current economic system is unsustainable in many senses. There are rising natural resource constraints; social pressures are growing; and political systems seem ill-equipped to cope. Add the destabilising impact of social media, and you get a combustible,  and nerve-racking, mix — the Arab spring is just one case in point.

The good news is that these concerns are already forcing a shift in mentality inside businesses. Weed of Unilever, for example, argued that companies like his are now making issues such as the environment, a centrepiece of their strategy, rather than a sideline; TK Kurien of Wipro said that his young Indian employees are increasingly demanding “meaningful” work (such as healthcare jobs and not defence); and Vasella of Novartis said that his company is now quite explicit about its determination to pursue social goals, rather than just focus on shareholder value. Better still, several figures in the audience argued that the investor community is increasingly supporting this shift (at least on the buyside).

But the bad news, as Kurien observed — with commendable honesty — is that while companies can see the problems posed by income disparity, they still don’t quite know what they can do to resolve them, as companies. Nally, of PWC, offered one note of hope: he called for more collaboration across business and government, which, of course, is what Davos is supposed to be all about.

Let’s see whether the next few days can produce anything tangible, either in the Congress Hall — or in those ”Occupy” igloos.