With the economy hit by the pandemic and now runaway inflation due to the crisis caused by the war between Russia and Ukraine, European ambitions to alleviate the climate emergency have been severely affected. Emphasizing the strategy, performance and action of the private and corporate sector to achieve the environmental, energy and climate goals for the year 2030, several panelists from leading companies from various sectors have touched on issues of great global urgency.
Among them, the issue of European energy independence as a result of the war in Ukraine, or the need for a coherent climate policy and a taxonomy stipulated by governments and companies that accompanies all the links in the value chain in unison. The sixth annual Sustainable World meeting was organized by EL MUNDO and Expansión and was made possible thanks to the sponsorship of leading companies from various sectors: BASF, Cellnex, Chiesi, Kiabi, Reale Seguros and Telefónica.
“The war in Ukraine has opened a deep debate between those who defend the need to still look at fossil or nuclear energies in a transition period to obtain independence from Russian coal, gas and oil and those who advocate accelerating the process to renewable energies”, said Pedro Biurrun, deputy director of the Expansión newspaper. In his welcome speech, Biurrun pointed to the recent discrepancies regarding the taxonomy of green energy and took the opportunity to propose a new scenario in the current situation: “The massive increase in renewable energies offers the lowest cost path to contain climate change runaway as a result of the Russian invasion of Ukraine,” he said. According to the deputy director, if energy companies reinvest in renewable energy, the “windfall gains” in the recent spike in prices, “the world’s average annual investment in sustainable energy could grow up to 85%”.
In the same line is Clara Arpa, president of the United Nations Global Compact Spain. In her opinion, caring for the planet while maintaining and improving private sector production are perfectly compatible tasks. “This is everyone’s task, in the Global Compact we want companies to stop being part of the problem and become part of the solution”, she stated. For Arpa, there is still room for ambition, however, the pandemic and the recent supply crises have finished consolidating the paradigm shift that was unthinkable twenty years ago in business culture: accountability in environmental matters. “37% of our companies have reported their impacts on climate change in the last year and in the case of the Ibex we would be talking about 83%”, assured the president.
On the other hand, Arpa highlighted the importance of joint action by the public and private sectors with a focus on achieving sustainability to curb the environmental crisis. “CEOs unequivocally call for bold government action and consistent climate policy and only 18% of 1,200 executives say governments and policymakers have given them the clarity they need to meet clear sustainability and climate change targets,” he explained. .
Vicente López-Ibor Mayor, president of the European Federation of Energy Law, underlined the importance of Europe as the world’s “first regulatory power”. “There was fear that during the pandemic the energy transition could be paralyzed, but the opposite happened. Priority was given to the Green Deal, which has a very clear alliance with the sustainable finance framework and is reinforced by the Fit for 55 package to review and update the legislation of the European Union and launch new initiatives to reduce emissions by 55%,” he explained.
Thus, the round table The company, engine of the energy transition was opened. The debate was moderated by Pedro Biurrun and included the participation of Goretti Hidalgo, head of communication for Chiesi Spain; Mercedes Porro, director of the Kiabi Spain Brand; Xavier Ribera, Director of Communication, Institutional Relations and Sustainability at BASF in Spain and Portugal; Marc Tosquella, global head of Energy at Cellnex; and Arancha Escalada, responsible for Sustainability at Reale Seguros.
Increasingly, sustainability is positioned at the center of the medium and long-term objectives of the business sector. Many cannot even conceive of achieving climate goals without abandoning the linear economy. Others are increasingly reinforcing their ethical codes so that the entire value chain shares the same environmental principles, including greater business transparency towards the customer and that the work of companies with a purpose is valued. The key is in the Environmental, Social and Governance (ESG) criteria, that is, the factors that, without neglecting the financial aspect, make a company sustainable through its social, environmental and good governance commitment. Brands like Kiabi already have clear objectives in these aspects.
“I have KPIs in the operating accounts that we validate, environmental and social, not just financial,” assured Mercedes Porro, for whom, despite the fact that the fashion sector still “has work to do”, it is important that brands use their channels of communication to “sensitize” customers and suppliers to transform their consumption habits and way of working towards a responsible approach. For Porro, the link between society, business, suppliers and SMEs is essential to value the creation of increasingly sustainable products. In this sense, Arancha Escalada highlighted the importance of monitoring in order to achieve objectives that benefit society as a whole. “We must accompany all the members of the value chain so that they understand that this is not an imposition, but that we go hand in hand,” she pointed out.
Thus, the scope of the European objectives in environmental matters implies joint work between all the public and private actors that give life to an economy. “This is about alliances and when we talk about the Sustainable Development Goals (SDG) we have to ally ourselves with the competition, with partners that you would never have imagined” stated Xavier Ribera: “The challenge is so enormous that if we don’t go together we won’t go to arrive,” he stressed.
On July 29 of last year, the planet entered the red. That is, in the middle of summer, humanity exhausted the natural resources available for a whole year. In just 210 days, the natural capital available for the entire year not only ran out, but also exceeded the capacity of ecosystems to regenerate natural resources by 74%.
“If we say that the future will be sustainable or it won’t be, we will have to be a circular economy”, stated Xabier Ribera. “Science gives us solutions that we can circularize, and this allows us to abandon this linear economy that has accompanied us in recent decades and return to a circular economy like the one our grandparents had 100 years ago,” he said.
For this reason, Marc Tosquella considers that our economic model “is embedded”. “Sustainability is an obligation that goes beyond any legal framework,” he said. In this sense, the circular economy responds to the fact that the value of products, materials and resources are maintained in the economy for as long as possible, so that waste is reduced to a minimum. “The linear economy no longer has a place, it has to be circular. We have to rethink the models” according to Goretti Hidalgo.
Initiatives such as recycling, second-hand markets or giving a second life to products designed to have only one can reduce the industrial environmental impact. “We understand sustainability as the entire life cycle of the product,” she says.
In addition, for Hidalgo, “the systemic vulnerability of the economy has increased in recent years and especially as a result of the pandemic” so that, despite the fact that the industries were already facing intrinsic risks in the value chain, the large companies must assume work commitments with their own suppliers so that little by little everyone sings the same song. In the words of Mercedes Porro: “Sustainability is a common goal that forces us all to walk together. Before, companies did and undid within themselves and now we are obliged to seek the basis of collaboration and the common challenge among all”.
Would you want to invest in an unsustainable business? Probably not”. In that sentence, Marta Pérez Cogollos, senior portfolio manager at Santander Asset Management, summed up the importance of sustainability to attract investors. “In sustainability we seek not only environmental excellence but also reflected in good corporate governance and and these business characteristics eventually translate into better results,” he assured.
“At Blackrock we don’t focus on sustainability because we are environmentalists, we really do because we are long-term investors and trustees of our clients,” explained Javier García Díaz, head of sales for Blackrock in Spain, Portugal and Andorra. García recognizes that sustainability is the “greatest investment opportunity that we are going to have in 20 years.” According to estimates by the management company, global economic growth may increase by 25% in the next two decades.
“According to the Sustainable Finance Association Spainsif, last year the level of sustainable assets in Spain reached 350,000 million euros,” added Arenillas. García complemented the information: “We are already seeing this opportunity in markets in which investors adopt sustainable solutions at a rate six times higher than traditional solutions,” he detailed. Demand is booming and the transition is underway; today it is more attractive and lucrative to invest in companies with a sustainable approach.
“What greater pressure can there be for a company than global investors saying that if they don’t take the path of sustainability they will reduce their investment in it?”
For now, the European Union is preparing packages of measures and regulations to which the countries are adapting at an urgent speed. “Now we see a boom in regulations, but surely in 2030 this will not be talked about so much because it will be completely integrated into the investment process,” Arenillas explained. In the case of these companies, Arenillas argued that sustainability is the “necessary license” to be able to be a manager today. “The effects of climate change modify the behavior of investments and the decision-making that we make,” she specified.
Finally, after both round tables, the closing of the event was carried out by Enrique Santiago Romero, Secretary of State for the 2030 Agenda. With an approach to maintain the path of social dialogue, the Secretary of State announced that the Government of Spain seeks guarantee the approval of a law for the protection of human rights, sustainability and due diligence of transnational business activities.
“Companies play a key role in bringing us closer or further away from the goals that the international community has set for itself. It has been the exercise of the greatest consensus reached so far to fully guarantee the rights of all people and environmental rights with a very clear objective. which is the year 2030”.
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