The World Economic Forum (WEF) convened its Annual Meeting in Davos from January 20-24, 2025, gathering heads of state, industry innovators, and thought leaders. While Davos has always been a melting pot for discussions on the future of the global economy, this year’s forum placed a significant focus on climate and environmental, social, and governance (ESG) challenges.
The backdrop
The devastating impacts of human-induced climate change were felt globally in 2024, with wildfires, hurricanes, and flooding wreaking havoc on communities and economies. Such disasters have inflicted over $3.6 trillion in damage worldwide since 2000, according to a World Economic Forum (WEF) report, and the risks continue to escalate. Businesses, therefore, also face mounting threats, with physical climate risks projected to reduce annual earnings by up to 7% by 2035 if adaptation efforts fall short.
The Forum’s 2025 Global Risks Perception Survey revealed that environmental concerns dominate the list of long-term global risks. All the more reason for the economic and societal leaders attending Davos this year, to address the magnitude of the crisis and explored actionable solutions – from harnessing AI and data to setting shorter-term deadlines for emissions reductions. Let’s take you through some of the key discussion points.
AI and industry transformation in the intelligent age
Artificial Intelligence is at the heart of driving both climate action and industrial transformation. At this year’s World Economic Forum (WEF) conference in Davos, themed “Collaboration for the Intelligent Age,” AI featured prominently in discussions, with a special focus on its transformative potential to reshape industries and address global challenges.
As Al Gore aptly reminded participants, “You can only manage what you measure,” emphasizing the critical role of AI in tracking and managing global emissions.
This sentiment resonated strongly with leaders, who acknowledged that scaling these technologies is essential to achieving climate goals. These fast-developing tools are already reshaping industries and enabling businesses to monitor and reduce their carbon footprints through innovative solutions such as:
- AI-powered data analysis: AI is speeding up and simplifying ESG data collection for businesses across the globe, and can also be used to recommend solutions to reduce carbon footprints.
- Transforming the energy sector: Data centers alone are projected to consume 1,000 terrawatt-hours (TWh) by 2026 – more than twice the 2023 annual energy consumption of France] . To meet this demand, investments in intelligent, decentralized grids and energy storage solutions are essential.
- Boosting manufacturing efficiency: AI is already enabling industries to reduce waste, enhance resource efficiency, and streamline supply chains. This contributes to a lower carbon footprint while driving productivity gains.
- Ethical concerns: Governance frameworks to address risks like algorithmic bias, data privacy, and misuse were highlighted as critical during the Davos talks. Collaboration across sectors is necessary to ensure AI benefits are equitably distributed.
The importance of business commitment to the green transition
Corporate responsibility was a recurring theme at Davos. Leaders from the Centre for the New Economy and Society stressed that while more than half of the world’s largest companies have incorporated climate targets into their strategies, less than 20% have addressed the broader implications for workers, communities, and supply chains.
Businesses that prioritize long-term sustainability over short-term profits can drive systemic change, proving that economic growth and environmental stewardship can coexist.
To achieve an equitable green transition, businesses must balance profit motives with societal responsibilities. This includes reskilling workers, supporting affected communities, and ensuring sustainability efforts do not exacerbate inequalities.
Read Sweep’s guide for businesses on Financing the Sustainability Transition and why it’s a strategic investment for your company.
Energy infrastructure overhaul
The transition to renewable energy requires more than deploying solar panels and wind turbines—it demands a comprehensive overhaul of energy infrastructure. During her speech on energy transition, Katherine Gao Haichun, Co-Chair of Trina Solar, stressed the importance of intelligent grids and robust energy storage solutions for a stable renewable energy supply.
“We need a more intelligent grid, a more decentralized grid,” she explained, underscoring the importance of innovation in energy systems.
Other participants agreed that renewable energy systems must be resilient and capable of supporting the demands of an AI-driven future. Investments in advanced storage technologies, like next-generation batteries, will likely be critical for ensuring reliability and stability.
This focus on infrastructure reflects the broader consensus at Davos: sustainable energy systems must evolve alongside technological advancements to meet the challenges of the 21st century.
The call for short-term deadlines
While long-term goals like achieving net-zero emissions by 2050 are vital to keep the world on track to meet the unanimous climate commitments made at COP 21, the 2025 World Economic Forum emphasized the power of short-term deadlines to drive meaningful action.
Andrew Forrest of Fortescue explained how setting a hard 2030 deadline to eliminate fossil fuels motivated his company’s workforce.
“When you’ve indicated to a workforce that you’re going to stop burning fossil fuel by the end of this decade, the workforce gets very interested,” he noted.
Short-term goals instill urgency and accountability, encouraging organizations to prioritize immediate action. They also show that significant progress is achievable within a single generation, offering hope and momentum for broader climate efforts.
Reasons to be hopeful
Despite the daunting challenges, WEF 2025 offered reasons for optimism. The convergence of AI and sustainability presents unprecedented opportunities to address climate issues.
Short-term deadlines and business commitments are driving meaningful progress, while forums like WEF foster dialogue and cooperation across sectors and borders. With innovation, collaboration, and ethical governance, the global community has the tools to rise to the challenge and create a more sustainable, equitable future.
