The Green Deal at Business Europe Day 2020, a partnership with industry?

« I see the climate transition as a huge opportunity for European economy and businesses » stated Ursula Von der Leyen in her keynote speech at Business Europe Day ; as if to counter the partisans of the theory that the Green Deal is there to constrain industries into conforming to broad environmental goals. And indeed, the Green Deal, as sustainability, was at the core of discussions at Business Europe Day 2020. Even more than the new coronavirus.

The Green Deal, a bane or a boon for the industry? How important is the partnership with industry, and how would the business world cooperate in facing environmental challenges? 

The Green Deal argues for profound societal change but also is a new strategy for growth. Its ambitious key targets are now well known: 50-55% decrease in emission by 2030 compared with 1990, net-zero carbon emissions by 2050, and massive investments for change towards sustainable solutions. It has been called a « new growth strategy » that is at the crossroads of economic growth and environmental challenges. In building alternative ways for growth and finding sustainable solutions, it calls for the business world to act. And indeed, the business world represented at Business Europe Day affirmed and re-affirmed its commitment towards implementing the Green Deal but emphasized that it must include a partnership with industry.

The president of the Commission, Mrs. Von der Leyen, as well as the Commissioner for Energy Mrs. Kadri Simson, made it clear: the Green Deal has the potential to be a business case. From the companies’ representatives’ point of view, it can indeed be a business case, and they can be leaders on implementing change.

Making the change rather than adapting to the change is vital, as underlined speakers of the panel on implementing the Green Deal in partnership with industry. That means European companies can be leaders in innovation. The speakers shed light on three ways the European industry can lead the way to a greener, prosperous society.

Technological innovation and Environmental can drive technological innovation and solutions fit for the future. The commissioner for energy mentioned hydrogen as a way to decarbonize industries that cannot be electrified, and agreed the results are favorable. Strategically, innovation can be made in Europe. Mr. Carl-Erik Lagercrantz, Chairman and Co-founder of Northvolt, presented its company that produces batteries for electric cars but also storing energy and industrial uses.

Batteries are at the core of a future more and more built on electricity, and they can be made in Europe. The funds it has raised through private investments and public investments from the European Investment Bank show trust in the company. Strategically this is meaningful: we are likely to be further dependent on battery solutions. Producing them at home rather than importing, vertical integration rather than extended value chains can be a strong asset.

Change means investments, and yet, as Mrs. Saori Dubourg, Member of the Board of Executive Directors for BASF SE, today investing in sustainable sectors does not always bring value. That is, markets must further valorize sustainable investments and evolve towards a reliable investment framework. Institutions and policy-makers are currently exploring green bonds, and the single market is a strong asset we can rely on.

Regarding circular economy, companies are advocating for a market system that valorizes sustainable initiatives, and this is also the case for the circular economy. Perspectives include a secondary market for materials.

The Green Deal can be an opportunity for companies to seize. But this is to be done under conditions according to the speakers. As emphasized by Mr. Maciej Witucki, the risk is a « Green graveyard of industries » if companies do not come proactively and wait for regulations to be imposed on them. Indeed the business world expressed concerns. A main one deals with maintaining a level-playing field and underlined that global challenges call for global convergence.

The Green Deal can be an opportunity for companies to seize. But this is to be done under conditions according to the speakers. As emphasized by Mr. Maciej Witucki, the risk is a « Green graveyard of industries » if companies do not come proactively and wait for regulations to be imposed on them. Indeed the business world expressed concerns. A main one deals with maintaining a level-playing field and underlined that global challenges call for global convergence.

Border mechanisms, and global carbon price, as expressed by Mrs. Emma Marcegaglia, president of ENI, are necessary in addressing environmental challenges while maintaining fair economic competition. The oil and gas major belongs to one of the most polluting industries and must deal with humongous change, to facilitate it, it must be ensured that the same measures apply to everyone.

The future of the industry in light of the Green deal will call for considerable investments in research and development. Mrs. Saori Dubourg advocated for a financial system that rewards investments in sustainable sectors. Other speakers shed light on the need for public investments or on the need not to penalize companies; otherwise, they would not be able to deliver the necessary funds for innovation.

Representatives of companies underlined they can make the change rather than be forced to make the change. However, the action required by the challenges goes beyond the operations in the economic field by and companies. Market mechanisms may need to be completed by regulations.

For example, that is the case of Mrs. Emma Marcegaglia, the president of ENI, which detailed the plan of the company to reduce GHG emissions. However, this plan was criticized by NGOs for lacking the proper ambition and might be a way to limit regulation in an already and increasingly regulated sector.

Making the change rather than adjusting to it means being the forerunners of innovations. It may also mean that companies would move forward by their own rules instead of waiting for regulations to be imposed on them. A position speakers extensively argued in favor, but regulation from above might also be needed, as has shown the case of the interdiction and control of plastics. Addressing environmental issues might mean regulation and not always match economic goals unless companies can seize the opportunity and make the change first, take up the opportunity to be leaders, invest in R&D, and set the standard for the future.

It is clear that worries on maintaining a level-playing field are prevalent among businesses, but they must be assessed against current challenges. The ball has been thrown around for long, and someone must start and lead the way. A stated by the speakers, European companies can be leaders and must be leaders towards environmental change. But it is not merely an opportunity among a range of other possibilities; it is the only way forward.

Hadrien Bazenet

French student at the College of Europe in Politics and Governance, originally a student in modern literature, Hadrien Bazenet decided to follow his interest in politics to pursue studies in public affairs and then in European affairs. Being from a small region in France (Corsica), a big part of his motivation was to evolve towards and in a multicultural / international environment that represents openness to the world.

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