Global Cooperation

Connectivity is essential for a more sustainable kind of globalization. Here's why

Globalization is not dead — but it is about to change.

Globalization is not dead — but it is about to change. Image: REUTERS/Bobby Yip

Nicolas Aguzin
Chief Executive Officer, Hong Kong Exchanges and Clearing Limited (HKEX)
Our Impact
What's the World Economic Forum doing to accelerate action on Global Cooperation?
The Big Picture
Explore and monitor how Banking and Capital Markets is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Global Cooperation

Listen to the article

  • Globalization has worked wonders for humanity — but it needs a shake-up in the post-COVID world.
  • Purpose-led globalization is the new name of the game — and tackling climate change is essential.
  • Capital markets have a key role to play in enabling this new phase of globalization.

It wasn’t too long ago that Google searches for ‘deglobalization’ were reaching repeated new highs. COVID-19 had shut down supply chains and industries were seriously considering mass re-shoring of their industrial capacities. These actions were understandable.

With China’s reiterated commitment to reopening, the abolition of stringent COVID-19 controls across the world and the inherent desire and momentum for stronger global connectivity returning, the globalization naysayers are being proved wrong.

The pandemic ultimately served to reinforce the importance of globalization, and it gave us the impetus and time to rethink and re-strategize what that might look like.

Have you read?

Globalization is a global-scale good

No doubt, globalization has been one of the best things to happen to humanity.

It has given us so much: global growth and productivity, new technology, millions of jobs — and the hope of a better world.

Globalization’s key metrics — international trade, capital and data flows —remained strong in 2021.

Perhaps the days of hyperglobalization of the 1990s and 2000s, when trade barriers fell and the global goods trade expanded at a rapid pace, will be hard to replicate, but globalisation is not over.

It is what collectively drives us to a better future. The speed and the manner in which this happens continues to evolve and it is not pre-determined, but globalization is here to stay.

It may not even slow down. Slowing globalization down will result in greater inflation, less development, less productivity and less sustainability for an equivalent amount of output.

The IMF estimates that trade fragmentation could cost the global economy up to 7% of GDP. Some countries could lose up to 12% of GDP if full technological decoupling happens. This economic catastrophe must be avoided.

Thoughtful, purpose-led globalization

Globalization is not dead — but it is evolving.

The next phase, post-COVID globalization, will be a more thoughtful model, one focused on supporting sustainability and common purpose and causes for the global good — “purpose-led globalization.”

With the effects of climate change all around us, a global movement to go beyond the models of the past is emerging. There is a deeply rooted desire to share ideas, to drive the de-carbonisation of global industries, to rethink supply chains and their carbon footprints and to use capital to scale green technologies from wherever they can be found. This was in evidence at this year’s Annual Meeting in Davos.

Sustainability cannot and should not be jurisdiction-specific — it must be globalised and universal.

Only by being more globally connected, with associated clear parameters, standardisations and measurements, that we can accelerate the net-zero transition and create a more sustainable world. And that is neither in the interest or the control of one company or country, but in our shared, connected global gift.


Capital markets have a role to play

Capital markets have a major role to play in driving a purpose-led model of globalization centred around sustainability.

Capital market regulators around the world must set and enforce ESG disclosure standards that provide the transparency needed for green and sustainable finance to be effective in speeding the allocation of capital to support the net-zero transition.

Organizations like HKEX, sitting at the heart of Asia’s financial markets, have a multi-faceted role to play in driving the evolution of this new model.

As an East-West Connector, HKEX and Hong Kong are well-positioned to provide enhanced connectivity and creativity in the capital markets - the vital tools needed to connect capital with carbon transition opportunities for resilient and sustainable growth in today’s fast-evolving world.

HKEX has joined the Glasgow Financial Alliance for Net Zero (GFANZ) through the Net Zero Financial Service Providers Alliance (NZFSPA) to help build a global climate-resilient economy, promoting climate-related financial disclosures among listed companies and supporting a green and sustainable finance ecosystem.

As a regulator, HKEX has led the way in promoting ESG among Hong Kong’s 2,500+ listed companies and it is constantly looking for ways to help corporates build a more sustainable business and put their ESG principles into practice. Further, HKEX is working together with partners and stakeholders to globalise standards to ensure consistency in rules around the world and to make sure those standards are applied uniformly.

HKEX has also worked with the International Sustainability Standards Board (ISSB) to help develop global sustainability standards that will enable investors and other capital market participants to make informed investment decisions by providing information about companies’ sustainability-related risks and opportunities.

HKEX is also the staging area of a huge amount of green investment. In 2022 a total of US $29.2 billion were issued on its markets.

The era of purpose-led globalization is upon us

By uniting across borders and building trust, we can drive global-scaled progress toward the net-zero transition. By laying the foundations for market operators and financial innovators to create the products and channels, such as green bonds and carbon markets, we can bring capital to business and new technologies with the potential to build a more sustainable world, provide new sources of productivity and drive sustainable global growth.

Rather than dwell on globalization concerns, now is the time to support the evolution to a more sustainable model: purpose-led globalization.

Climate change is here, happening and impacting us all. Action is a global imperative. The time is now to drive this new globalization phase with more and better connectivity.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Global CooperationFinancial and Monetary Systems
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Critical minerals are in demand. How do we make sure this trend drives development? 

Kimberley Botwright and Guillaume Dabré

May 24, 2024

About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum