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Davos 2020: PwC chairman says dos Sandos affair 'not our finest hour' – as it happened

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Survey of CEOs shows that business leaders are more anxious about the global economy, and also anxious about their own prospects.

 Updated 
Mon 20 Jan 2020 14.23 ESTFirst published on Mon 20 Jan 2020 02.38 EST
IMF managing director Kristalina Georgieva speaks at a news conference ahead of the World Economic Forum in Davos, Switzerland.
IMF managing director Kristalina Georgieva speaks at a news conference ahead of the World Economic Forum in Davos, Switzerland. Photograph: Denis Balibouse/Reuters
IMF managing director Kristalina Georgieva speaks at a news conference ahead of the World Economic Forum in Davos, Switzerland. Photograph: Denis Balibouse/Reuters

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PwC chairman reveals disappointment over dos Santos

Newsflash: PwC’s chairman says he is “disappointed” by the revelations that his company is caught up in the Luanda Leaks scandal.

The Guardian, and other media outlets, reported last night how Isabel dos Santos, daughter of Angola’s former president, had accrued a $2bn fortune through a series of deals involving state companies and offshore tax havens.

PwC acted as her accountant consultant and tax advisor -- so is now facing serious questions about its role.

Chairman Bob Moritz has just been tackled about the revelations, at the end of his press conference here in Davos.

Moritz says the issue was brought to PwC’s attention at a corporate, global level.

An investigation is being conducted, and in the meantime PwC has ceased working with certain individuals and corporations.

Moritz says PwC aims for high standards, and expects its people to meet those standards.

He says that he’s “disappointed” on a personal level, that the problems weren’t spotted earlier, and that PwC didn’t exit its relationship with Dos Santos earlier.

We’ll find out what went wrong, and we will take appropriate action to re-establish trust in the organisation, he pledges, adding ruefully:

It’s not exactly our finest hour, but hopefully we can move with speed [to resolve it].

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There are some interesting regional differences within CEOs, PwC says.

In Europe, bosses are more awake to climate - both as a threat and an opportunity.

While in the US, CEOs are simply more confident in their ability to grow revenues this year.

Onto questions...

Q: This survey took place in the autumn, before the US-China trade deal, so are CEOs probably more optimistic today?

Moritz agrees that some pessimism has eased, but there’s still plenty of uncertainty - especially with a presidential election in November.

Q: Stock markets are at record highs, so what are they seeing that your CEOs aren’t?

Moritz points out that the markets are “flush with cash”, meaning investors are scrambling to find an asset with a yield - driving prices up.

Q: So is there going to be a correction?

You may see some companies struggle to justify the valuations out there, Moritz says.... but he’s not going to predict who, or when.....

Q: Is there any hope of tackling the climate emergency, if it’s not even in the top 10 risks which CEOs are worried about?

PwC’s Bob Moritz suggests that CEOs do have lots of other immediate risks to worry, which have pushed climate down their agenda.

The key is for business leaders to see climate as an “upside opportunity”, not a downside risk, he says.

He’s talking about “purpose and profit being aligned together” -- a modern spin on the old adage of ‘going well by doing good’, perhaps?

PwC: CEOs not too worried about climate

The number of CEOs confident about revenue growth prospects has fallen in every major economy, PwC’s Bob Moritz adds, apart from China.

In China, bosses are more upbeat.... due to hopes of increased domestic demand.

Moritz tells his audience at Davos that there are several key issues keeping CEOs awake at night. They include:

  • Trade conflict - fears have risen significantly, since Donald Trump began imposing tariffs on China and Europe
  • Regulation, which is “seen as a huge challenge” -- particularly with regards to tech giants
  • Cybercrime

But climate is NOT in this list.

It’s an increasing risk, but not in the top 10 threats cited by the 1,500+ CEOs interviewed for PwC survey, says Moritz.

The reality is that climate at the CEO level is not a top 10 risk.

That’s pretty alarming, and disappointing, given the urgent need to tackle the climate emergency (as the IMF flagged up today).

Why are business leaders gloomier?

Bob Moritz, chair of PwC, says the magnitude, and the range, of risks facing business chiefs is pushing confidence down.

It’s not all gloom -- he reckons the Phase One US-China trade deal has lifted sentiment, as has Boris Johnson’s decisive election win last month.

But the survey is certainly gloomy.

For example, the number of CEOs are very confident in their firm’s ability to grow its revenue has fallen steadily.

Global CEOs gloomier about the future.

Newsflash: pessimism among the world’s top CEOs has jumped sharply over the last year.

That’s according to PwC, the accountancy and consultancy firm.

Its annual survey of over 1,500 global business leaders, just released, shows that optimism about global growth has hit the lowest level in the survey’s 23-year history.

For the first time, a majority think global growth will slow -- which means they are less optimistic about their own company’s prospects. The gloom is spread widely across the world’s companies, PcW flags up.

The survey is being presented now....

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As usual, the World Economic Forum is beginning with its Crystal Awards ceremony. I’ll post proper details later, but for now....

Indian actress Deepika Padukone addressing the audience after receiving a Crystal Award from Hilde Schwab, Chairwoman and Co-Founder of the World Economic Forum’s World Arts Forum. Photograph: Markus Schreiber/AP
Dancer and coreographer Jin Xing, from China, receives a Crystal Award. Photograph: Markus Schreiber/AP
Australian artist Lynette Wallworth accepts her “Crystal Award”. Photograph: Denis Balibouse/Reuters
Artist Theaster Gates, from the United States, addresses the audience after receiving a Crystal Award. Photograph: Markus Schreiber/AP
Graeme Wearden
Graeme Wearden

Hello from Davos. This quiet ski resort is filling up with scores of limousines, plenty of police and a horde of the so-called Global Elite.

Business leaders, academics, campaigners and the media are back for the 50th World Economic Forum.

And corporate signs are EVERYWHERE - Facebook has apre-fabricated HQ in the middle of town. SAP, Amazon Web Services and Accenture all have prime spots too, along with Zurich who are giving out their traditional blue hats to the masses.

All quite remarkable. Still, we’ll have the opening ceremony later, plus a big survey of CEOs by PwC.

Mid-afternoon summary

On the financial markets, it has been a fairly quiet start to the week, with US markets closed for Martin Luther King Day.

Craig Erlam, senior market analyst at trading platform Oanda Europe, says:

This comes following a rather eventful start to the year, since which markets have largely stabilised. The signing of the phase one trade deal [between the US and China] will allow investors to turn their attention elsewhere and this week that place will be the mountains, more specifically, Davos.

The World Economic Forum gets underway [officially] tomorrow which means lots of panel discussions, meetings and interviews for traders to get their teeth stuck into. Given the current environment, it may not be the most market impactful event that we’ll see but when it comes to a gathering of some of the most influential people in the world, you can never be too sure.

Stock markets are trading slightly lower.

  • UK’s FTSE 100 down 24.8 points, or 0.32%, at 7649.61
  • Germany’s Dax up 0.11% at 13,540.47
  • France’s CAC down 0.34% at 6079.85
  • Italy’s FTSE MiB down 0.54% at 24,011.79

Oil prices have gone up after major production shutdowns in Libya. Brent crude has added 54 cents to $65.39 a barrel, up 0.83%, while US crude is 36 cents ahead at $58.9 a barrel, up 0.61%.

Sterling is down slightly against the euro and the dollar, trading at €1.1722 and $1.2993 respectively.

Hundreds of climate protesters march to Davos

Hundreds of protesters are marching to the ski resort of Davos to call on global leaders to step up action on the climate crisis. They started their three-day march yesterday and some wore koala bear costumes to call attention to the Australian bush fires.

They are set to arrive at Davos on hiking trails or by train after their 30km hike, because authorities have banned foot traffic on a road leading to Davos from the neighbouring village of Klosters, Reuters reported. In contrast, many of the business and political leaders are flying in by private jet – or arriving in limousines.

Protesters will face up to 5,000 military personnel and police as they get to Davos, where US president Donald Trump is the headline speaker, as in 2018 (he pulled out last year). He is expected to attend Davos tomorrow and on Wednesday – while back in the US the Senate holds impeachment hearings to decide whether he should be removed from office.

Greta Thunberg, the 17-year-old climate change activist, will also address the World Economic Forum. She was told by Trump via Twitter in December to “work on her anger management problem” and “chill,” whereupon she changed the bio of her Twitter account to: “A teenager working on her anger management problem. Currently chilling and watching a good old fashioned movie with a friend.”

Climate protesters demonstrate against WEF in Landquart, Switzerland. Photograph: Arnd Wiegmann/Reuters
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More on this story

More on this story

  • What did we learn from Davos 2020?

  • World leaders talked the talk at Davos but we need some real change

  • Javid seeks to calm business over EU rulebook after Brexit

  • Greta Thunberg clashes with US treasury secretary in Davos

  • World Bank chief's Davos snub dashes hopes of climate consensus

  • 'This is Dunkirk. This is 9/11': Al Gore implores Davos to tackle climate crisis

  • UK to impose tax on tech giants but risks US tariffs on car exports

  • Reshape economy to fight climate crisis, says Prince Charles

  • Donald Trump on Greta Thunberg: 'She beat me out on Time magazine' – video

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