9.5.2013   

EN

Official Journal of the European Union

C 133/8

1.1

Times are hard for large parts of European industry. Nonetheless, an increasing number of companies in Europe and elsewhere in the world are preparing to meet the many challenges facing the world, including the impact of demographic developments, climate change and, in particular, sustainable low-carbon objectives.

1.2

The EESC wishes to highlight changes in mindsets that are paving the way to new or adjusted business models. Sustainability is a strategic issue in the World Business Council for Sustainable Development, in initiatives among companies at national level, and in the preparation of sectoral low-carbon roadmaps at EU level. Changes in the focus and structure of companies and in international value chains are bringing new business models into being.

1.3

One important element is a pro-active commitment by corporate leaders, which is also affecting downstream and upstream relations. A corresponding commitment and corresponding innovation are taking place at all levels, supported by interactive dialogue with works councils and specific programmes within companies, as well as by national and European sectoral social dialogue.

1.4

In the transition towards a low-carbon economy, up-to-date skills and the availability of highly-qualified jobs must be ensured so as to avoid, as far as possible, discontinuity or temporary unemployment. EU, national and regional programmes should be put in place, as should tailor-made actions within companies.

1.5

New perspectives and new dynamics will improve the resilience of companies and value chains, ensuring investment and employment. A low-carbon economy requires continuous, finely tuned coordination between public and private parties, including financial arrangements. Public policies should take advantage of views and practices in the private sector and should incorporate targeted company-driven approaches, which are often ahead of government practices.

1.6

To support the growth initiative, the EESC calls on the EU and the Member States to consider using funding that is currently untapped, or even completely new, as a source for financing urgent measures. The Commission should stimulate R&D and innovation by giving priority to low-carbon initiatives in the forthcoming Horizon 2020 programme, which must absolutely not be cut. The Commission should also encourage the establishment of operational public-private partnerships (PPPs), in close cooperation with European Technology Platforms and industrial sectors that cover the whole innovation chain.

1.7

Consistency is crucial. The EESC underlines the need for a well-defined, coherent and long-term EU framework discussed with all stakeholders, the avoidance of overregulation, a strong link between R&D/innovation and energy/climate policy, and an effective energy infrastructure and storage capacities. Good practices and effective, jointly agreed schemes must be taken into consideration. Such an EU framework will also boost acceptance among the public and the people directly concerned.

1.8

The EU is responsible for roughly 10% of global greenhouse gas emissions. That percentage will fall to about 5% in 2040-2050. It is not disputed that the EU is taking the lead in global negotiations for a binding global climate change agreement. However, the EESC emphasises that distortions must be avoided. As long as there is no global level playing field in greenhouse gas reduction and CO2 prices, imbalances between the EU and the rest of the world must be addressed by European measures for global sectors.

1.9

Latest developments are to be taken into consideration. The EESC advocates an up to date assessment of low carbon targets given a worrying shift in industrial activities towards third countries, notably the United States – based on their pragmatic and forward-looking energy policy, that turns out to be detrimental to European investments and jobs.

1.10

An open, learning society needs flexible forms of participation, rules and responsibilities. A new culture of innovation needs to be developed, based on the participation of the affected groups. It must aim for a basic consensus in society. It is important to have an in-depth understanding of the challenges and to recognise the fact that the complex problems that the world is facing can only be overcome through the interaction of industry, science, society and politics. All interested parties – companies and their staff, NGOs, social partners, suppliers and customers, and consumers – should be involved. Transparency should be ensured.

1.11

The EESC insists that the approaches highlighted in this opinion be integrated in the forthcoming industrial policy and in other relevant policies. Concerning climate policy and competitiveness the EU should closely cooperate with industry on solutions that take into account technical viability and economic feasibility of policies.

2.1

Technology and innovation, globalised financial markets and trade, custom-made products, dynamic value chains, and recycling are key factors in today's economy.

2.2

In parallel, the growing world population, income spreads, and problems surrounding raw materials, water and food present additional challenges. Climate change, sustainable development and energy – in terms of efficiency, low-carbon requirements, renewable energy and access to resources – are high on the international agenda. The new objectives have to be addressed in an uncertain climate, with low growth in Europe.

2.3

Multinational companies and their staff, as well as value chains downstream and upstream, are increasingly being confronted with the complexities of the current situation. European value chains are still among the world leaders. Their position must be secured.

2.4

This opinion discusses some current trends in mindsets and attitudes within sectors and companies that are paving the way for new business models. The huge challenges that we are facing can only be successfully met by both public and private approaches, involving jointly agreed analyses, fine-tuned coordination and initiatives to create growth and sustainable jobs. Public and private stakeholders need to work as partners on the way forward.

2.5

There is broad agreement that the increase in CO2 emissions over many decades has caused significant greenhouse effects, including a rise in average temperatures, noticeable changes in weather patterns and additional unpredictable effects such as higher sea levels and changes in ecology and ecosystems that have a (negative) impact on agriculture, leading to disproportionate rises in food prices, hunger and poverty.

2.6

Climate change problems are intensifying (1). However complicated it may be, the overall lesson is that worldwide targeting of CO2 policies and low-carbon roadmaps is highly desirable.

2.7

Meanwhile, despite the lack of a stable long-term framework, many corporations are taking action to develop sustainable business strategies downstream and upstream and to produce more sustainable, low-carbon products and services. Major changes are also taking place due to restructuring, optimisation and redesign. A focus on low-carbon technology and innovation is crucial in order to find worldwide solutions.

2.8

Value chains remain a great socio-economic asset for Europe. Sustainable production can only be built on competitiveness, innovation, new skills and high-quality employment. Key enabling technologies, such as biotechnology, nanotechnology and new materials, are all the more necessary because rapidly falling communication and coordination costs are facilitating the geographical dispersion of different activities within value chains. Although this is not a linear process, it often entails the relocation of labour-intensive and digital-based activities.

2.9

The view is taking root in a growing number of companies that ‘People, Planet, Profit’ – a famous expression dating from the 1990s and now back in the spotlight – should be taken as a guideline, despite the often complicated dilemmas and conflicting choices. It should lead to a company-driven economic, social and environmental response to current global beliefs, developments and indicators.

2.10

A targeted company-driven approach, which is under way in a number of countries, will strengthen the position of companies based in Europe. It can be seen as a strategic approach for the future, committing CEOs and boards of directors, staff, suppliers and customers, trade unions and other social partners, and other stakeholders.

3.1

The one-time dominance of the Western world is being replaced by polycentrism, with a number of centres of gravity. Multinational companies are in many cases the link between the various centres. The situation in the world economy is constantly under pressure from varying (distorting) political and economic impulses.

3.2

The context is also affected by objectives in the field of climate change and energy. The United Nations, the OECD and the EU, as well as the private sector, draw up analyses and define desirable policies in response to these new challenges. It is up to the Commission and the Council to take the lead in setting the agenda, defining the rules of the game and creating the conditions for investment and innovation.

3.3

The Dow Jones Sustainability Index of 1999 and the Global Reporting Initiative are promoting ‘sustainability’ awareness, as are a broad range of other actors, including leading companies and their staff, social partners and NGOs of all kinds. The World Business Council on Sustainable Development (WBCSD) in Geneva is an active business network that establishes the views of business in relation to worldwide negotiations on climate change. It is also taking the lead in developing new approaches for business and in bringing together multi-faceted projects among companies. Its major initiatives have included ‘Vision 2050’ in 2010, followed in 2012 by ‘Changing Pace’, which spells out the role of regulation in stimulating good business behaviour (2).

3.4

According to ‘Changing Pace’, governments have to make a clear choice between priorities and must set the rules that define those priorities in terms of objectives of growth and purchasing power and determine how to achieve the best results. The fundamental purpose for business is ‘to provide continually improved goods and services for an increasing number of people, at prices they can afford, without unsustainable impacts, and in ways that create jobs and economic value’ (3).

3.5

‘Changing Pace’ identifies medium- and long-term global megatrends and public policies and objectives, and then gives a business perspective on policy options. The chapter on ‘People's values’ also explicitly discusses responsible citizens and consumers.

3.6

There is a clear gap between the analyses that are generally accepted and the targets that governments actually achieve. The current crisis seems likely to overburden the European economy: many companies are having to adjust their production capacity to shrinking demand in the western world and, it appears, in China and India.

3.7

The EU is leading the way in tackling climate change and enhancing energy efficiency, by adopting the Kyoto protocol and implementing legal provisions. Meanwhile, other major actors in the world have not yet adopted comparable principles, let alone binding legislation. This unbalanced and unsatisfactory situation is continuing despite recent UN conferences. The lack of clarity for EU industry is feeding uncertainty and unrest among the workforce of the companies concerned. A well-coordinated and balanced approach, with coordination between public and private actors, is indispensable.

3.8

Companies are currently rationalising. Although technology, innovation and strong value chains ensure good results, they are accompanied by damaging effects on companies and employment. Unemployment is at historic highs across Europe, with youth employment being a concern almost everywhere. There is an urgent need for new prospects.

3.9

The crisis in the European labour market is affecting the prospects for ambitious climate change policies. Extensive redundancies in industry and little or no access to the labour market for young people undermine the transfer of knowledge and expertise which are indispensable for the transition to a low-carbon economy.

3.10

On the other hand, widespread awareness of climate change and other challenges is creating new opportunities. European companies are progressively integrating this agenda into their strategies and trying to obtain competitive advantages. A similar development is also noticeable among leading companies in the US, Japan and even in emerging countries such as China. In many European companies there is a belief, from management to shop floor, that such adjustments will bear fruit, creating win-win situations. The most interesting results have been obtained with ‘cradle-to-cradle’ processes and with the development of a circular economy using scarce resources and materials.

3.11

In conclusion, the EESC insists on effective coordination of analyses, views and agenda-setting among public and private stakeholders. That is crucial at many levels – global, European, national and regional – to ensure that the European economy remains competitive, while at the same time ensuring sustainability and social innovation. The key lies in technology and fostering innovation, as well as in ensuring up-to-date competences, skills and management.

4.1

Sustainability targets are increasingly being incorporated by and within companies as part of company culture, CSR policies and risk-management processes. In the same way that, at global level, a number of leading companies have subscribed to the principles of ‘Changing pace’ (4), similar initiatives are being taken in Europe at sectoral and company level.

4.2

That trend is moving at various speeds within sectors and individual companies. It takes time and a great deal of effort to introduce a new mindset that favours redefined targets, especially in a period of slow growth. Broader societal trends, as expressed by NGOs and critical consumers, also promote new approaches and methods.

4.3

That development is demonstrated in studies by the Commission and experts. Last year a report concluded that: ‘The overall picture from the EU industrial eco-performance is one of a significant progress towards decoupling of economic growth and environmental impact over the last two decades, with greater sustainability and resource efficiency in industry playing an important role within this’ (5).

4.4

With a view to building up companies' future resilience, CEOs and boards often commit themselves to such processes by taking direct responsibility, which ensures more structure and focus within companies. In the WBCSD network, personal commitment is current practice. That example is being followed by companies in individual countries. The link between business and sustainability is becoming more visible and tangible.

4.5

Many initiatives are being taken by European businesses to link environmental objectives to economic resilience. The process, which started in northern Europe, is intensifying and gradually spreading across the continent. Individual companies' aims are expressed in mission statements, projects and cooperation with academics, NGOs, social partners and others. National organisations include:

4.6

There are still substantial differences in approach, which have to do with the stage of economic development and the degree to which national economies and R&D are linked to developments beyond the national and European context. In the foreseeable future, however, businesses across Europe will operate in the same worldwide framework, which will require similar attitudes and responses. Management, as well as education and training, will have to prepare for that reality.

4.7

Some common features can be identified:

5.1

Low-carbon strategies will play a central role in promoting sustainable growth. They are linked to EU industrial policy.

5.2

European industry currently has to respond to a broad and complex mix of policy targets and instruments at European, national and even local level, focusing on CO2-emission reduction, renewable energy and energy efficiency. Targets and instruments are sometimes ambiguous, overlapping, and not properly integrated. In order to be effective and cost-efficient, industry needs more simple, predictable and integrated policies.

5.3

The transition towards a sustainable low-carbon economy has been moving forward mainly because of efforts to reduce costs, following the rise in oil and energy prices that occurred before the appearance of an environmental protection culture driven by the consequences (actual or expected) of climate change induced by greenhouse gas emissions.

5.4

In the EESC's view, a coherent and consistent EU framework for more secure, competitive and low-carbon energy supply, implemented consistently in the Member States, should consist of four main pillars:

5.5

The EU ETS will be the central EU policy instrument to achieve greenhouse gas emission reduction targets in a harmonised and cost-effective manner. It should be implemented in a market-based way. The EESC notes that there are three crucial issues that have yet to be dealt with:

5.6

In addition, there is broad agreement that substantial upfront investment is needed in public infrastructure, i.e. in the European energy grid. A commitment by public actors to provide the initial investment and boost confidence among private investors will be crucial. This should be discussed in the Council and be part of the EU growth initiative.

5.7

That should also mitigate a noticeable trend towards the relocation of certain European industrial activities to other regions of the world, despite the fact that the Europe 2020 strategy and its implementation take the risk of carbon leakage into account.

5.8

Any proposal for structural improvement of the ETS should address the issues mentioned in points 5.4 and 5.5. The current debate on the adjustment of the ETS is insufficiently focused on solving those issues or on changing the design of the ETS. From 2020 onwards, adjusted orientations should result in a stable CO2 price, on the basis of which market participants should be able to plan long-term investment decisions for low-carbon solutions. Improving the design of the ETS would avoid the need for short-term political intervention.

5.9

Improvement of the design of the ETS is also needed to increase its acceptance by the public and workers. While some ‘traditional’ workplaces are expected to disappear quickly, new ‘green’ low-carbon workplaces are not yet properly in place. Excessively abrupt changes mean that the transition to a low-carbon economy is often experienced as a threat in traditional production areas. Social dialogue at various levels is needed in order to promote transparency and acceptance by the people concerned, and to initiate education and retraining programmes for all workers to bring their skills into line with changing demands on the labour market.

5.10

The most important need is for a new R&D and innovation policy focused on value creation in complex (international) value chains that aim towards a low-carbon economy. The current technological orientation has to be broadened. Climate change, an emerging shortage of strategic resources and consequent price increases are enforcing a change of thinking in the energy and raw materials sector. Catch-up processes in emerging and developing countries, including technology transfer, must also be taken into account. The demand for resources is rising, while restructuring energy systems and increasing resource efficiency are risky and very costly. Success will also depend on different, closely interlocking industries and fields of competence. All these factors urgently require a coherent technological pathway in the EU (6), supported by consistent political decision-making.

5.11

Integrated approaches go beyond the production phase and aim to improve environmental performance at each stage of the life cycle, i.e. design, raw materials, assembly, distribution, and disposal. Integrated product policies must be discussed between public and private actors. They must be precisely defined in order to avoid overregulation. Among the tools available, where appropriate, are agreements between producers and governments or the EU concerning eco-labels, energy labelling, eco-design, substance bans and ecological footprint labels. To be effective, labels should contain adequate and reliable consumer information, including under the Unfair Commercial Practices Directive, which should be properly implemented.

5.12

Significant expenditure on basic and applied R&D is also a necessary condition for achieving the goal of a secure, globally competitive, reasonably priced and efficient energy supply for Europe, guaranteed by an efficient energy infrastructure and corresponding regulations (7).

5.13

Systems innovation across sectoral boundaries and integrated value-creating chains affect companies, given that fossil-based world energy systems must be decarbonised in the long run and shortages of raw materials will require a resource-saving economy. Step by step, sustainability is asserting itself in all markets, a development that blurs traditional boundaries between sectors and gives rise to new value creation chains.

5.14

The current debate is also encouraging an increasing number of bottom-up initiatives within companies. Large companies and SMEs alike are developing low-carbon business strategies and models for the whole value chain. Anticipating future energy requirements will also yield competitive advantages. That requires appropriate legislation. Internal generation of innovative ideas and innovation processes for production and organisation, from top management to the shop floor, are becoming standard practice in many companies.

5.15

Examples include the following:

5.15.1

Given that the built environment accounts for a significant proportion of final energy demand, consumption of fossil energy sources can be substantially reduced in a cost-effective way by improving the energy performance of existing and new buildings, including by means of insulation and improved heating techniques. Other examples are projects by companies and municipalities to produce transport infrastructure and the transport of locally produced sustainable energy. These aspects and their specific context will be covered in a separate EESC opinion (8).

5.15.2

The Euracoal association proposes a three-step clean coal strategy that reflects the findings of the Energy Roadmap 2050 and involves: the introduction of state-of-the-art technology in the coal-fired generation sector, thus reducing emissions; the development of next generation, high-efficiency, flexible technologies; and the demonstration and deployment of CO2 capture and storage (CCS) and transport, together with CCS for other fuels and sectors. There is scope to improve the opportunities to export clean coal technologies from the EU.

5.15.3

Forest-based industries, which are based on renewable raw materials and which use inherently renewable energy, are very pro-active. To be successful, a sector-specific policy package, including R&D, is essential to bring breakthrough technologies and new products to market. The right balance between raw materials and energy use of raw materials must be established. Policies must be consistent with global developments, other policy areas and industry investment cycles.

5.15.4

Cross-cutting initiatives are under way. Public-private partnerships (PPPs) such as Sustainable Process Industry through Resource and Energy Efficiency (SPIRE) and Energy Materials Industrial Research Initiative (EMIRI), to name but two, should be guaranteed high priority and adequate funding under Horizon 2020.

5.16

At this very moment, at EU level, a number of other sectors are developing long-term low-carbon roadmaps.

5.17

A transition to a bio-economy for Europe will also be part of the solution and will represent an important development in building a low-carbon economy. Companies are coming up with new bio-based products and solutions that meet rising expectations and specifications.

6.1

Processes such as those described above must be effectively accompanied by, and embedded in, technological, economic and social frameworks and conditions. Those include targeted research and investment programmes in companies and fine-tuned dialogue, at both sector and company level, with public authorities – EU and national – and a range of stakeholders.

6.2

To support the growth initiative, the EU and the Member States should consider using funding that is currently untapped, or even completely new, as a source for financing urgent measures. FP7 and 8 should promote breakthrough technologies and innovative projects. The EIB should also play a supporting role. In addition, the EESC recommends discussing tax breaks as a possible instrument in this respect.

6.3

EU technological platforms, most of which are industry-driven, bring together companies, research institutes and academics as well as public views on prospective developments (9). They have a crucial role in analysing world trends and expectations and in jointly setting goals and timescales.

6.4

Setting market objectives implies discussion and testing with suppliers and customers as well as with stakeholders such as social partners, NGOs, regional authorities and consumers. The EU and governments are responsible for legislation and regulation, but this should never be a one-way street. Instead, it should be linked to feasible roadmaps and ongoing processes and planning in leading companies (10). That requires a continuous exchange of analyses and testing of views between the public and the private sector.

6.5

The political discussion often focuses primarily on top-down initiatives by the EU (or governments) related to climate change, demographic development, health, food, water, etc. without acknowledging the current situation in business. The EESC calls for the inclusion of analyses and solutions from private industries that share the same concerns. It is private investment, supported by a qualified workforce, that will be particularly necessary to address the main problems.

6.6

Social objectives within companies and the need to maintain employee commitment must be integrated into the modernisation processes. The EU and Member States should, via the sectoral and cross-sectoral social dialogue committees, promote and implement measures to support socially acceptable management of the transition to a low-carbon economy. Besides emphasis on the skills needed by workers and employees (11), the quantitative aspects and timescales must also be taken into consideration.

6.7

Updated curricula, education and training programmes and apprenticeships can reflect the shared commitment in this respect of governments/administrations, companies, staff and workers' representatives to overcome historically high levels of unemployment.

6.8

A major, if not decisive, aspect is a worldwide level playing field, for instance via global standards and certification, transparent legislation, symmetric market access, protection of intellectual property and similar levels of consumer protection. Basic labour rights should also be respected. Those aspects should be an integral part of European trade policy (12).

6.9

The EESC believes that all actors should take note of the process by which companies and groups of companies are introducing self-imposed requirements and procedures, since achieving the desired goals in a timely fashion can involve a very heavy burden.