Sustainability is becoming increasingly important when considering the future of capitalism. It has many aspects, including social sustainability and economic sustainability, in addition to environmental sustainability, all of which must be ensured.

The World Economic Forum has been underscoring the importance of this issue since 1973, when the "limits to growth" report was published. Humans cannot continue to exploit nature indefinitely, and economic growth in a way that imposes costs on future generations is unjust and unsustainable.

Chinese Premier Li Qiang addresses the opening session of the World Economic Forum in Tianjin, China, on June 27, 2023. The forum, known as the Summer Davos, runs through June 29. (Kyodo) ==Kyodo

However, the risks related to sustainability have been underestimated in past policies related to politics, economics, and society. One reason is the optimism that was embedded in many people during the globalization that followed the collapse of the former Soviet Union in 1989 that the world economy could expand indefinitely.

Policymakers are not always adept at integrating certain risks, like a pandemic, that are highly uncertain and have no great probability of occurring, but if it does occur, it will have serious consequences. The same is true of climate change risks, which have only recently been taken seriously, as many parts of the world are experiencing torrential rain and heat waves.

Supplied photo shows World Economic Forum Executive Chairman Klaus Schwab. (Kyodo) 

Many scientists have pointed out that if the temperature increase since the Industrial Revolution exceeds 1.5 C, the change will exceed a tipping point and become irreversible. Some estimates suggest that if the melting of the Greenland ice sheet is unstoppable, global sea level will rise by 7 meters. Since the average temperature has already risen by 1.2 C, there is little margin left for change, and the coming seven years until 2030 represents a crucial period. Without addressing the underlying issues of climate change, a sustainable society will not be realized.

Achieving a sustainable future will require transformative changes in the economy and society. But this is a very complex issue, and much must be accomplished to make it happen.

First, it is important to make economic growth more inclusive, because right now, many people are being left out of the benefits of growth.

Secondly, it is also important to decouple energy consumption and economic growth, and to decarbonize production processes such as steel and cement, as well as transportation. The key to both of these is the expansion of renewable energy, but much innovation is still needed.

Decarbonizing the economy is essential, but it is not enough. Nature-based solutions (NbS), which leverage nature to advance solutions to various problems, are fundamentally important. Changing to regenerative agriculture and aquaculture can increase the amount of carbon dioxide absorbed by ecosystems.

This requires reshaping existing infrastructure, which is enormously costly. With many countries unable to afford such investments, I am not all that optimistic that politicians will have the political will for fundamental change and global unity, when global solidarity is most needed.

But even if it is a cost in the short term, there are many opportunities in the long term for efforts to create a sustainable society, and it will lead to job creation. We are hopeful that companies are beginning to understand this and that consumers are becoming more aware of the importance of choosing products and companies that are serious about greening the economy.

(Klaus Schwab is a founder, Executive Chairman of World Economic Forum)