The role of business in the 2030 sustainability agenda

by Diana Carter

The annual European Business Summit brings together policymakers, senior business executives, journalists and think tanks to address issues affecting the future of Europe. The 2017 edition included the Sustainable Development Goals (SDGs) Conference organized by CSR Europe, a European network of businesses focused on promoting sustainable practices amongst its members. The conference aimed to give insights into progress, best practices and challenges faced by European business around the SDGs.

Lise Kingo, Executive Director of the UN Global Compact, reminded the audience that there are fewer than 5000 days to go until the deadline for meeting the goals set in the 2030 SDG agenda. Time is short given the ambitious objectives on the table which include ending poverty ‘in all its forms everywhere’, gender equality and ensuring availability of clean water for all.

The UN Global Compact has tried to provide a practical framework for businesses in which to operate. It has connected the 17 goals with existing frameworks, such as ISO 4000 for environmental standards and those set by the Global Reporting Initiative. In April 2017 it launched the Global Opportunity Explorer, a library of case studies aimed at inspiring business to explore new models. Examples include insect oil as a sustainable alternative to palm oil, BMW’s re-use of batteries for renewable energy storage, and Thread, a company that has made fabrics from 38.9m plastic bottles collected from streets, canals and marine ecosystems in Haiti and Honduras.

Lise Kingo, Executive Director, UN Global Compact

But, by Ms Kingo’s own admission, “Who actually knows the 17 SDGs by heart?”. A study conducted by Globe Scan and CSR Europe in April 2017 found that in almost half (47%) of the companies surveyed, SDGs were not well known by top management. Amongst middle management, this fell to 11%. Yet it is middle management who will ultimately be responsible for translating an ambitious corporate vision into day-to-day business operations.

The Vattenfall example

However, whilst businesses may have low awareness of the SDGs, they may be spearheading sustainability efforts using a different reference framework. Annika Ramsköld, Executive Sustainability Vice-President of Vattenfall, a Swedish energy producer and retailer, comments: “We don’t do much reporting around the Sustainable Development Goals. We already use other tools, focusing on business and human rights and corporate social responsibility”.

Behind Vattenfall’s mission statement: ‘we exist to power climate smarter living’ lies tangible commitment to its own sustainability transition. The business, whose parent company is 100% owned by the Swedish state, has committed to achieving carbon neutrality in its Nordic markets by 2030 and across its whole business by 2050.

The company reports continued progress towards this objective. According to its own assessment, in 2015 Vattenfall produced 426 g/kWh compared with an average of 300 g/kWh amongst its peers, which included RWE, Enel, E.ON, EDF, EnBW, Statkraft, DONG, Fortum, Iberdrola, Centrica and EDP. By 2016, Vattenfall’s carbon dioxide production fell to 126 g/kWh, representing a decrease of 71% in its overall carbon dioxide production.

Vattenfall’s drive to carbon neutrality involves initiatives with short and long term impact. Its research and development collaboration with Swedish mining and mineral group LKAB and steel manufacturer SSAB on hydrogen-based carbon alternatives to power the steel industry is only likely to have real impact over the next 25 years. In contrast, Vattenfall’s work with GE Healthcare on recycling heating and cooling has brought immediate benefits in terms of reduced energy demand.

Vattenfall does not engage only with other businesses. It has established partnerships with the cities of Uppsala, Amsterdam, Berlin and Hamburg to assist them with sustainable consumption. The company pursues initiatives to enable consumers to shift to more sustainable energy usage. In 2016, it launched its fast-charging electric vehicle infrastructure inCharge in Sweden, Germany and the Netherlands and aspires to become a leading mobility infrastructure developer in Northern Europe. It also works with households to modernize heating technologies at lower cost. “You need to focus on multiple initiatives to make systemic change”, comments Ms. Ramsköld.

What’s next for Europe? – European Business Summit 2017

The incentives challenge

She acknowledges that finding new sustainable business models is not always straightforward. For example, persuading Vattenfall’s profitable gas business to find alternative revenues from biogas or heat pumps is not an easy sell. Businesses have long been confronted with the challenge of balancing short and long term revenue streams. Finding the appropriate governance model to support new revenue generating initiatives that are not immediately profitable is key. Vijay Govindarajan and Chris Trimble recount how General Electric developed a low-cost hand held ultrasound scanning device for doctors visiting patients in rural China. To achieve the portability and cost objectives imperative to penetrating the market, GE set up a new Chinese business entity with its own profit and loss account and hired local engineers and marketers. With the support of a senior executive sponsor, the team was able access the necessary software development expertise from GE Israel to design a portable device instead of the large immovable ultrasound machines costing thousands of dollars that GE produced at the time. In this way, GE was able to develop a new product that neither its existing technologies nor managerial incentive structures would have allowed.

Investors may be willing to support corporate sustainability initiatives, provided they are convinced that a company will not sacrifice profitability. This can be a fine line to tread. Unilever CEO Paul Polman established a reputation as a sustainability advocate, by launching the Unilever Sustainable Living Plan and discontinuing quarterly financial reporting to discourage investment from shareholders looking for short-term returns. For the first seven years of his tenure as CEO, he delivered total shareholder returns of 203%, outperforming peers Nestlé and P&G. In 2017 however, he was obliged to fend off a takeover bid by Kraft Heinz who sought to take advantage of Unilever’s underperforming share price. Unilever was then at pains to show that the company valued shareholder loyalty and renewed its commitment to increasing returns.

Greens MEP and Vice-Chairman Philippe Lamberts, who led the introduction of EU rules to cap bank bonuses in 2014, is more direct. In his opinion, there is no question that business needs to be regulated if the SDGs are to become a reality since most companies are too focused on the pursuit of quarterly returns to take a long-term view. He observes that there is a fundamental contradiction between SDG number 8, focused on sustaining per capita economic growth, and environmental protection. “To achieve all these goals would require uncoupling economic growth from ecological footprint”, Mr Lamberts says. “We’ve never seen this”.

A growing role for business in global sustainability governance

There may be cause for optimism. The upcoming round of UN-led COP23 climate talks taking place in Bonn in December 2017 is expected to include non-state actors, including businesses, civil society and municipal governments within the formal climate negotiations – a first for the COP process. Formal recognition of business as a key stakeholder to the climate negotiations brings two advantages. It gives business the opportunity to articulate the risks they will have to manage whilst transitioning to sustainable practices, and explore solutions that require collective industry commitment and government support. And, by showcasing the successes of sustainable business, the dialogue can help mobilise more businesses to embrace the opportunities of new business and industry models. 

Read more from YEL’s delegation to the European Business Summit 2017 here. Learn more about YEL’s activities at COP.

Diana Carter is Secretary General of Young European Leadership. Diana Carter works in cloud computing at the nexus of business and technology, enabling companies of all sizes to use CRM to achieve their business goals. She is keen to combine her professional activity with initiatives by business and policymakers to drive sustainability, with a special focus on the contribution of young people. 

Trade at the European Business Summit 2017

by Delphine Joos

Brexit, the ongoing migration crisis and the rise of populism have led to a significant change in global politics. This combined with the election of the American President Trump  has encouraged a major shift in the economic and political world – established agreements and old trading partners have to review their alliances and trade relationships. With the EU still holding a prime position in trade, it is important to define the specific direction that policy will follow in the coming years. At the EBS, it was clearly indicated that trade is still a central focus point with sessions covering topics such as the EU Trade & Protectionism, the New European Trade Deals and the EU-US Relationship after Trump. Even though all sessions were tackling different areas of trade and the challenges that had to be overcome, one central question always popped up; “How to go further with the European Free Trade agreements?”. This question was debated from many different perspectives and angles such as what to do with TTIP after Trump or what will happen now with all free trade agreements after the recent CJEU ruling on the EU Singapore FTA.

In the session on Europe’s Trade Strategy: New Trade Deals for Europe, most questions were asked to EU Commissioner for Trade Cecilia Malström. Although her answers on some very critical questions did not always provide the most detailed explanation and reasoning, Malström clearly defended the European values and showed strong ideas on how to go forward. As such she believed that “the TTIP must be left in the fridge for a while”. Thus, it is better to wait until all parties have a clear view on what they want to establish and achieve before starting to renegotiate the deal. In her eyes TTIP has only one more chance to be renegotiated and as such it is essential to fully exploit that chance to the  maximum.  On the CJEU judgement she was very decisive that although it does not  make the EC’s job easier, it still provided a necessary clarification. Most people have understood the CJEU judgement as something negative, but Malström considers it more as guideline to finally establish the right measures to resolve the complex tangle of FTA’s and dispute settlement systems.  As she is well aware that ISDS has become a toxic acronym, she still highlighted that the majority is still in favour of TTIP and as such it is the EC’s task to negotiate the best trade deal as possible that offers a balance for both parties but also defends the interest of the EU citizens.  It will be interesting to see if ICS is the ICS’ing on the cake or if it will bring TTIP to its TTIP’ing point.

Other sessions indicated that the EU’s prime position and trade strategy is offering many opportunities but is also very challenging and complicated as new relationships such as EU-UK and EU-US have to be defined.  But also the fight against populism has to be ended. During the debate on EU-US relations, It was brought up that a politician must be popular not populist. Malström  believes that fighting populism starts with building great and coherent leadership within the EU. Currently, the member states do not always unanimously defend the EU’s trade policy and values which causes confusion and easy access for a populist. Forming a united front is the only solution to ease the worries of those confused.

Photo credit: Pixabay

Trump’s presidency was another topic that was brought up often.  Most EBS speakers made it clear that it is no more business as usual since the trade agenda must be adapted and concerns  about the new US president must be addressed. However, having the US as a trading partner is still highly important. When a critical participant asked a question on why the EU always looks at US or China and not to Russia, their argument was shut down in a direct manner. The EU should not establish trade at all costs and by all means. As such it is important to establish clear agreements between trading partners. China is a perfect example of good opportunities mixed with good cooperation. Having Russia as a trading partner is possible but not the most strategic choice with a low GDP and not being the most stable country in trade relationships.

On the matter of Brexit we have to move forward. However, how this should be done is less easy to understand. Malström believes that first of all the withdrawal should be arranged and that only afterwards the future of EU-UK trade could be discussed. But listening to a question launched by a spectator, this idea of tackling Brexit is quite controversial as many attendees believed that waiting to negotiate the trade relationship would be a crucial mistake as it has been showed in the past that negotiating an FTA deal is extremely time consuming as  the process takes on average ten years to complete,  implying that  it would be a mistake to waste important time. In a different session it was suggested that Brexit will only lead to fragmentation.

The EBS entertained a European spirited atmosphere with sometimes critical analyses on how to improve.  A lot of challenges have to be overcome in regards to trade and a lot will be decided on the success of French President Macron and the policy of Trump. Looking at the white paper on the future of Europe published by European Commission President Juncker, there is not just one perfect scenario for the future of Europe. It will more likely be a mix of different scenarios depending on different factors and happenings in the EU and the global political context. The picture on EU trade is much more complex as there is no ultimate solution but rather it depends on the contribution and input by all countries, partners and businesses. As Malström stated Europe is about building bridges rather than building walls. However, it will take some time to build these bridges as it requires enough balanced support from all sides. The construction and foundation must be solid and clearly designed.

Read more from YEL’s delegation to the European Business Summit 2017 here.

Delphine Joos is Delegate Officer to the European Business Summit 2017. After obtaining a bachelor degree in law with distinction at the University of Brussels and an Erasmus Exchangeat the University of Copenhagen, she is currently enrolled in a double master degree in Comparative Corporate and Financial law at the University of Brussels and the University of Leeds. Delphine will begin her third masters degree at the College of Europe in EU political and administrative studies from autumn 2017. Her professional aspirations focus on expertise in European policy drafting, and she is particularly interested in European economic diplomacy and European trade.

EBS 2017: European Economic Diplomacy

by Delphine Joos

Since the economic and financial crisis and the emergence of new economic powers, the economy has become the main driver of political influence in the EU.  As the Lisbon treaty introduced new EU competencies on foreign direct investments and the creation of the European External Action Service (EEAS), the importance of economic diplomacy has intensified. Today the trade area is not as it was shortly after World War ΙΙ.

During the moderated debate by Chris Burns at the European Business Summit, the essence and effectiveness of European Economic Diplomacy (EED) was discussed. The debate introduced space as an example of a sector which  is eager to use economic diplomacy to increase its profits. However, not all parties were in favour of using this new EU diplomacy tool, especially as not all business sectors agree on the necessity of EED. Throughout the debate, Angelos Pangratis, EEAS and Advisor HC responsible for EED, made it clear that EED is crucial to coordinate the horizontal advocacy and the decision making. Pangratis strongly believes in the efficiency of EED in places where no rules are in place.

Photo credit: Pixabay

The challenge of the EU is to form a coherent and uniform policy with priorities to engage in specific objectives. In Pangratis’ eyes, EED is the essential tool in today’s a globalised economy that has become extremely complex due to large competition between businesses worldwide.   International trade exists out of multilateral rules  which are  nonetheless influenced by power politics. As such, EED would be a useful and effective measure to protect the EU interest in a more direct way – a strategic view is necessary. The policy department of the European Parliament has recently published an in-depth analysis of the EU economic diplomacy strategy and the involvement of the EP in defining this strategy. However, listening to debate at the EBS17 it was indicated that the matter on how to develop the EED strategy is not crystal clear as parties do not agree on the precise approach. Nevertheless, it must be generally accepted that most likely this new tool will be developed and used to defend the EU’s interest. It will be crucial that all businesses, together with the EU, find an approach that can benefit all and leads to an effective and efficient trade strategy. Thus, EED can only be effective when used by all with  a coordinated strategy and clear policy purposes for the interest of businesses and the European Union.

Read more from YEL’s delegation to the European Business Summit 2017 here.

Delphine Joos is Delegate Officer to the European Business Summit 2017. After obtaining a bachelor degree in law with distinction at the University of Brussels and an Erasmus Exchangeat the University of Copenhagen, she is currently enrolled in a double master degree in Comparative Corporate and Financial law at the University of Brussels and the University of Leeds. Delphine will begin her third masters degree at the College of Europe in EU political and administrative studies from autumn 2017. Her professional aspirations focus on expertise in European policy drafting, and she is particularly interested in European economic diplomacy and European trade.

Opportunities in E-healthcare

by Yee Theng Ng

Over the past few years, innovation in the healthcare industry has given rise to digitalisation to embrace integrated care solutions. The ability to harness big data could radically transform healthcare systems. Patients can be actively engaged in disease prevention and management, and receive quicker diagnosis. Healthcare providers can also zero in on the right treatments. This is already happening in Kobe, Japan, where supercomputers are storing loads of patient data to improve health system efficiency. How far has Europe come in realising such transformation?

At the European Business Summit 2017, Director-General for Health and Food Safety of the European Commission Xavier Prats-Monne said that technology presents a huge opportunity for the future of healthcare, especially with regard to treating chronic diseases. Thus, to make technology fit for purpose, stakeholders who do not presently speak to each other should do so. This means having a “common language” and to reduce apprehension of stakeholders by gaining their trust. His views were also shared by other industry panellists at the “Future of Healthcare” roundtable who believe that partnerships are key to achieving digital healthcare revolution in Europe. The 2011 EU Directive and mid-term review of the Digital Single Market earlier this year aims to promote greater cooperation in e-health. DG Prats-Monne shared the three key themes of the DSM proposal (i) to give effect to the right of every citizen to access and share securely their personal health data; (ii) support the development of a secure data infrastructure for the pooling of health data to advance research, disease prevention and personalised health and care; (iii) facilitate feedback and interaction between patients and healthcare providers. These proposals will be delivered in a Communication on digital health later this year.

Photo credit: Etervis

While digital innovation can help improve the efficiency of healthcare systems and reduce costs in the long run, DG Prats-Monne believes that “innovation still needs to be accepted and understood; otherwise, it will be lost on a nurse who’s scared of losing her job.”

Indeed, digital literacy is also key to embracing e-health. If citizens see the benefits of how health data can provide better care, they will be more willing to contribute data for scientific research purposes.

Today, citizens want to have access over their personal health data and giving them control can help solve privacy concerns while allowing them to take advantage of big data applications. In addition, ensuring data security will help citizens in embracing and gaining trust of the digital tools. Several EU Member States are building a legal framework for automatic medical data sharing for research, with the goal of ensuring health data is used securely through good data governance. Progress has also been made in 16 countries on e-prescriptions and 5% of EU citizens now receive treatment in another EU country.

Ain Aaviksoo, Deputy Secretary General for E-services and Innovation at Ministry of Social Affairs of Estonia, shared Estonia’s success story in the e-health transformation. Estonia’s Health Information System is now used by 98% of Estonian citizens. Also, 99% of all medicine is issued using a digital prescription. Perhaps the upcoming Estonian Presidency of the Council of the European Union could help incite other Member states to make similar investments in their healthcare infrastructure and raise the bar to digitise of healthcare in Europe.

When asked by Young European Leadership how young citizens could contribute to the process of innovation, many speakers highlighted the idea of “reverse mentoring” whereby youths who are more digital-savvy can provide better care solutions. Thus, the time is now to contribute our part in the e-health transformation.

Read more from YEL’s delegation to the European Business Summit 2017 here.

Yes Theng Ng is a YEL delegate to the European Business Summit 2017. She is currently  working towards an MBA at HEC Paris. Prior to her MBA, she worked as a policy advisor with the Singapore government on energy and trade issues, where she frequently engages with governments, international organisations and private companies. At HEC Paris, she continues to pursue her passion for international politics and economy as president of the International Affairs Society. 

Are universities contributing to the economic development of Europe?

by Paloma Cantero Gómez. 

The role of universities as the most remarkable provider of knowledge and skills has to be able to adjust to the needs of a flexible and fast-changing reality.

There is a current mismatch between the educational system and the labor market. Schools and universities are producing standardised individuals with standardised sets of skills that are not useful to the labor market. In the 21st century, the labor market needs unique, creative and innovative individuals educated to think outside the box who are able to expand their horizons and think differently. With universities still mirrored as pure-knowledge producers and providers, we are lacking a holistic and practical approach to education adjusted to the real needs of the next production revolution.

Moreover, there is currently an increasing acceptance that an economic narrative is not sufficient when measuring growth. There is thus a need for a redefinition of the growth narrative which puts “well-being” at the core center of new growth frameworks.

The OECD is aware of this fact and is committed to defining a new learning framework for 2030. When defining this framework the OECD, through its Informal Working Group on Education and Skills, presents resilience, innovation & sustainability as the basic “must haves” of the new learner with IQ becoming an important part of the classroom curriculum. With education having proven to be the core of innovation and growth, students should be prepared to work with new narratives and innovations for the creation of new demand, jobs, products, services, tools, processes and ways of thinking and living with full sense and deep meaning.

Photo credit: Max Pixel

At the same time young people should be empowered to take responsibility. Proactivity and action should always be accompanied with ethics and a sense of responsibility, as well as moral and intellectual maturity.

This new educational system should not be rooted in the current one. Starting from the scratch, it should embrace new disruptive methodologies, approaches and angles. It should fully prepare the student for understanding the world around them by applying concepts to the creation of solutions and innovation.

This new framework for education requires a mandatory update of universities and higher education in which multi-partnerships are able to ensure innovation and growth. To ensure a proper adjustment of universities to the labor market “we need a person-center approach [...] partnerships between professors and businesses, supportive legislation and knowledge transfer on the innovation ecosystem” said Ms. Lidia Borrell-Damián, Director of Research and Innovation at the European University Association at the European Business Summit 2017. “Dedicate, develop and date” were also the three basic “Ds” which were presented by Mr. Alfredo Soeiro, Professor at the University of Porto, as key elements for a successful partnership between universities and business.

The European Delegation to the G7 Youth Summit recognised the importance of this approach and are aware of the importance of bringing together higher education and business as the only way to properly train the youth on the real skills demanded by the labor market. Last May, they presented the introductions of a dual system of higher education as a concrete measure to walk the path forward to the leaders of the G7 countries.

In a time of digitalization, new production revolution, individual empowerment, the advent of artificial intelligence and accelerated globalisation, universities need to rethink their current way of doing and innovate in methodology, provided skills and knowledge and general structure in order to effectively become the catalyst for an inclusive, open and sustainable growth.

Read more from YEL’s delegation to the European Business Summit 2017 here.

Paloma Cantero Gómez is a YEL delegate to the 2017 European Business Summit. Paloma is an expert in international relations, holding a double bachelor degree in law and journalist. She was nominated to the 2017 Forbes list of 30under30 influential leaders on policy and law. She is passionate about leadership and entrepreneurship she has launched several projects related to education, youth, social movements, human rights and fashion.