On November 9, 2018, “Future is Here: Global Leaders on the Changing World” lecture series, jointly organized by the PBC School of Finance of Tsinghua University (PBCSF) and National Institute of Financial Research (NIFR) of Tsinghua University, hosted Douglas Peterson, President and CEO of S&P Global, for a lecture entitled “Key Global Risks and ESG”. By invitation of Dr. Min Zhu, Chair of National Institute of Financial Research (NIFR) of Tsinghua University and former Deputy Managing Director of IMF, Douglas Peterson delivered a presentation on the major global challenges and analyzed the environment, social and governance structure (ESG), before engaging in a dialogue with Dr. Min Zhu.
Douglas Peterson became President and CEO of S&P Global in November 2013. He first joined the company in September 2011 as President of Standard & Poor’s Ratings Services. Previously, he was with Citigroup for 26 years, during which time he transformed businesses and drove performance in investment and corporate banking, brokerage, asset management, private equity, and retail banking.
Peterson believes that future global risks mainly lie in the following aspects. First, sluggish global economic growth. Japan and Europe are still in the process of recovery, while the US economy growth is slowing down. Second, rising interest rates would exert more pressure on long-term government debts. Since the financial crisis, global liquidity has flooded and interest rates have fallen to very low levels. It is now necessary to gradually withdraw from the loose monetary policy and enter the interest rate hike cycle. However, the debt level of many countries is too high, with their debt-to-GDP ratio exceeding 100%. The rise in interest rates will significantly impact those countries. Third, geopolitics. Populism has gradually risen in many countries and regions around the world, which has had a direct impact on the US presidential election and UK’s Brexit. In the future, populism may continue to affect geopolitics. Fourth, technological transformation. Technology innovation has accelerated greatly, and disruptive technologies could overturn existing business models overnight, posing great challenges for CEOs. Fifth, trade protectionism. Lastly, climate change, which is also a very influential one in the long run. Peterson is convinced that all countries and citizens should pay more attention to ESG (Environmental Social Governance) to better respond to global risks.
In his dialogue with Dr. Min Zhu, Douglas Peterson talked about the dynamics and resistance of US economic growth, the impact of technological progress on different industries and the global impact that the US interest rate hike may bring. He also hoped that China-US trade frictions could be fixed promptly and properly. He stressed that the United States should adopt a more multilateral approach to international trade disputes and put forward more constructive solutions based on the existing international trade system, instead of adopting unilateralism and negative accusation policies.
During the Q&A session, Douglas Peterson talked about the far-reaching significance of RMB internationalization, the impact of the US mid-term elections on China-US business relations, the Fed’s possible attitude toward interest rate adjustments, and proposed his vision for China’s establishment of a more advanced and international financial market.
In the end, Dr. Min Zhu summarized this inspiring talk. Currently, the world is facing risks in six aspects, namely global economic growth, relations between interest rates and long-term government debt, geopolitics, technological transformation, trade protectionism and climate change; all global citizens should pay more attention to ESG; young people should remain curious, be adaptive to lifelong learning and develop their own skillsets.
“Future is Here: Global Leaders Opine on the Changing World” lecture series invites world-renowned leaders from economic, financial, social and academic circles to project and contemplate on global development trends, with the aim of building a first-class exchange platform for Tsinghua students, faculty and alumni and helping them grasp the latest trends and develop the habits of lifelong learning.
Past guest speakers include Maurice Obstfeld, Economic Counsellor and Research Department Director of IMF, Peter Maurer, President of the International Committee of the Red Cross (ICRC), Harvey Schwartz, former President and COO of Goldman Sach and Jacob Frenkel, Chairman of JPMorgan Chase International.
