EU Vision of Sustainability in the XXI Century

“EU vision of Sustainability in the XXI century”
Key points and main messages of the presentation by
Mr. A. Pangratis, Minister and Deputy Head of Delegation of the European Commission to the USA, at the 5th annual European American Business Council Ambassadors’ Dinner
House of Sweden, Washington DC, July 9 2009.

Four simple messages to deliver:

1. A wider concept of sustainability is needed for the future: societal sustainability

This is particularly true from the point of view of a private company.

The first concept of sustainability is obvious to all: it is the economic sustainability, defined as the normal effort of every manager to reduce costs, optimize profits, and in the process, avoid waste of resources.

There is another concept of sustainability which is becoming more and more obvious to all and is a wide overall preoccupation of our societies. This is the environmental sustainability, which incorporates along with economic sustainability, environmental related considerations like climate change, environmental impact, but also considerations linked to scarcity of resources such as the long term availability of fossil fuels for energy. Furthermore, this concept also takes into account the politics of environmental sustainability, of energy security, and of other environmental issues, and incorporating in the wider sense, the politics of the policy making as well. These are already key considerations for the strategy of most private sector companies, which have to keep a close eye, for example, on the dynamics of the legislative processes and initiatives that could affect their industry.

Then there is finally, a wider concept of sustainability that I will call, for the purpose of our discussion tonight, societal sustainability, which incorporates all the above and in addition, everything that can make a production process for a specific product non sustainable because of the way our societies evolve. For example, consumer protection and public health have become increasingly important areas of concern of citizens and societies as a whole. The tendency in these areas and the propensity of our societies in defining the mission of people responsible for consumer protection or public health, is clearly towards increasing safety; considerations of costs coming as a second stage concern. Often moral, ethical and even religious considerations are important in the way society chooses to discuss and regulate such areas. Innovative high technologies find themselves in the centre of such controversies. Everybody can think of the ongoing debates concerning biotechnology and GMOs, and the similar debates that we are seeing developing on issues like nanotechnology, stem cells, treatment of animals ect. No company dealing with or producing chemicals in Europe can ignore the REACH regulation. No company dealing with or producing cosmetics can ignore the rules for animal testing. These are but some examples.

2. A fundamental Concept for the XXI century.

In my opinion, this wider concept of sustainability will be one of the most if not the most fundamental concept of the XXI century, almost equally for public and private actors. For public actors, because the state and public policy will have an increased responsibility to develop the proper responses to the global challenges involved and to the requests of society to handle appropriately the new technologies. For the private sector, because companies will have to incorporate in their business strategies this wider concept of sustainability and act accordingly but also because the future belongs to companies with a high sense of responsibility towards the increasing challenges of both environmental and societal sustainability.

Probably the three most important reasons, which will, in the future, reveal and fuel the need for environmental and societal sustainability, are the following:

i. the huge initiatives currently under way in terms of international rules and domestic regulation in the areas of climate change and energy security. In those areas, as humanity appears to be reaching some of Mother Nature’s limits, it becomes more and more obvious that there is a need for a real green revolution, including a green industrial revolution.

ii. fighting the loss of bio diversity and reversing deforestation are more important challenges than widely recognized and they will require more forceful global action in the future.

iii. at least equally important with the two previous reasons, is the way the wider process of regulating our economy will evolve in the future. Clearly we want, as organized societies, increased safety rules, increased consumer protection, including increased child protection, better regulation of hazardous materials, in toys for example, ect. We need this increased protection and better regulation in a context of accelerated use of new technologies in all areas of life, and in the context of an overall exponential growth of human knowledge. Clearly both the need for increased safety and protection and the acceleration of the new technologies and innovation, will continue to grow in parallel. This can hardly result in a simplification of the overall regulation of our economies and organized life. Obviously and very rightly so, the effort of “good regulation” or of “better regulation” is central. We need to simplify and alleviate current and future regulation as much as possible. However I do not believe that the overall volume of regulating can actually be decreased nor become less relevant for the society as a whole. This consideration can obviously be particularly relevant for the activities of the companies present here today.

3. The role of the EU

In this wider concept of environmental and societal sustainability, the EU and particularly the European Commission has played a very important, and often internationally, leading role.

Initiatives and legislation produced by the EC/EU concern, among others, areas that I have already mentioned like climate change, environmental initiatives “concerning water soil and air protection”, (other recent examples include directive on air quality regulating the exposure to fine particles and the directive on new vehicle emission standard), protection of bio diversity, combating global deforestation measures, and the chemical legislation – REACH.
Two remarkable initiatives in the area of sustainability are

i. first, the efforts of the EU to evolve towards a recycling society

ii. another very important initiative of the European Commission was in July 2008, when it presented an Action Plan on sustainable consumption and production and sustainable industrial policy, which in fact is an effort to define the first steps of the path the EU wants to engage into moving towards the green economy of the future.

In fact there are many other EC/EU legislations and initiatives related to the wide concept of environmental and societal sustainability.

In many areas the EU is really leading the world and a lot of its concepts and rules are copied or are an inspiration for other nations around the world (e.g. climate change, REACH, animal treatment, consumer protection, child protection, public health, phyto-sanitary, veterinary other rules).

4. EU-US Cooperation

Within the difficult context of climate change and energy security challenges, combined with the current economic and financial crisis, transatlantic relations are faced with a clear and important opportunity for the future, both globally and specifically.

First globally because the climate and energy security challenges illustrate the need and aggravate the urgency for every nation to commit to the effort of building the green economy of the future as soon as possible. The stimulus packages fighting the effects of the economic crisis almost all around the world, can and in fact do, in many respects accelerate instead of reduce (as normally ‘expected’) the pace of the indispensable green transformation.

It is also a specific transatlantic opportunity because in this process of global transformation, the nature of the transatlantic relations and interests of both the EU and the US are changing quickly. The EU and the US are increasingly less the competitors that they used to be during the biggest part of the last decades, where they had been the two largely competing poles in creating industrial or trade related standards which generated trade advantages for the winner of the transatlantic regulatory competition on their domestic as well as global markets. More and more it becomes obvious that our common challenge today is very different: we now need and have the fundamental interest to cooperate in creating the political, legislative and regulatory transatlantic coherence which will:

– make it possible for the world to reach and coordinate more common responses to the global challenges we are facing. Obviously climate change, access to energy resources and energy security are on the top of that list.

– allow us to lead together by proper example, elaborating with intelligent cooperation and coordination a concrete process in order to create at the global level, as well as the national level (for each State), the transition to the green economy of the future, that can only succeed if it is based on a wider concept of environmental and societal sustainability, and supported by the success of a more innovative economy.

Seen from a transatlantic point of view, for both the US and EU alike, our ability to lead this formidable process is real, in the sense that it is in our hands to commit to real solutions, illustrate them for others, lead by example and inspire and stimulate others to follow the example or to do the same or similar efforts. This ability to lead is however not increasing as time passes by. We thus need first to define clearly where we are going and then to act both with the sense of urgency and the necessary ambition required to meet the challenges of our times. Urgency and ambition are two key notions, as we pursue and seek answers to the formidable challenge of sustainability in the XXI century.