Professor Phoebe Koundouri held the third lesson at the fourth edition of the Siena International School on Sustainable Development. Here are some of the key points to remember:
The European Union’s interest in sustainable transition began in the 1970s and was strengthened in 2015 with the enactment of the SDGs and continues today with the adoption of the European Green Deal and EU Taxonomy.
COP26 can be interpreted as a success because states and major investors for the first time put climate ahead of finance. In particular, stronger commitments were made to reduce emissions and keep the temperature increase within 1.5°C; 40 countries committed to be Carbon Neutral by 2050, China by 2060 and India by 2070. Developed countries confirm their commitment to contribute more than 100 billion per year in climate mitigation and adaptation actions in developing countries.
SDSN (Sustainable Development Solutions Network) has grouped the 17 SDGs into 6 Transformations to try to convey a holistic view of sustainability. In addition, to support policymakers in the implementation of EU strategies, a report has been published that integrates the European Green Deal, European Semester, Next Generation EU and SDGs (https://sdsn.eu/european-green-deal-senior-working-group/). It highlights for each state the degree of achievement for each SDG and areas for improvement.
The European Green Deal should be conceived with a systemic approach, simultaneously addressing multiple objectives and promoting the right mixture of policy instruments and technical solutions that can be used across the various sectors of the economy. In addition, such an approach can sustain social cohesion through job creation, upskilling, re-skilling, equity consideration.
Governments are asked to make significant long-term investments and play an entrepreneurial role at three levels, to provide patient, long-term, and strategic finance that supports sustainable innovation:
- MACRO LEVEL: Re-conceptualizing financial stability and the “‘mission’ of central banks to include climate & environment degradation risk. The European Investment Bank (EIB) and the European Investment Fund have the expertise and scale to set the direction in deploying equity-type financial instruments complementary to loans and guarantees.
- MESO LEVEL: National public investment organizations provide positive sources of long-term patient finance, which support sustainable investing.
- MICRO LEVEL: Companies have to understand that those that switch towards sustainable practices soonest, will be the most competitive, most innovative and more successful over time.
From the business point of view it is necessary to adopt a holistic approach consisting of 3 steps:
- Identification of important units in the value chain (mapping the company value chain);
- Measurement of company ESG performance through the implementation of specific KPIs;
- Assessment and monitoring of company performance to help decide whether, when, where and how to intervene.
Businesses, to be involved in the implementation and achievement of the SDGs, must be able to monetize their footprint on human, natural, and produced capital.
