AMBITION | BE IN BRILLIANT COMPANY
sector (with the related transition to less-carbon-intensive gas, known as the ‘dash for gas’), German reunification (and the related investments in more energy-efficient factories in Eastern Germany), and – indirectly – the German safety-driven phasing out of nuclear energy after the Fukushima disaster (and the ensuing scaling up of renewable energy, whose plummeting production costs in solar and wind power fuelled a global demand for renewables). Environmental strides Since the corporate world is unlikely to adopt game-changing environmental improvements of its own accord, governments must take the lead and impose the sustainability agenda as they rescue firms damaged by the pandemic. Necessity is the mother of invention and change, and business will only walk its sustainability talk when forced to do so by ineluctable government requirements. The sustainability transition will only materialise, therefore, through targeted government support, in which economic and environmental recovery operate in lockstep. Since governments virtually always prioritise economic stakes over environmental interests, the sustainability agenda will need to piggyback on economic interventions. The exceptionally large amounts of public funding that are about to be poured into the economy provide a unique opportunity to make significant environmental strides while also propping up the economy. In this context, the EU is showing leadership by publicly pledging 30% of its €750 billion EUR post-coronavirus restructuring emergency fund will be financed by the issuance of sustainable bonds. Governments can save work, without necessarily saving existing jobs. A significant number of positions will almost certainly cease to exist over the next few years and others that we cannot yet even imagine will emerge. For example, new jobs in developing circular business and managing smart grids. ‘An upcoming economic crisis is likely to be followed by an even larger environmental crisis’
as solid and robust as those erected from brick and concrete while involving much lower levels of carbon emissions. Some governments have understood the necessity to make their financial support to distressed firms contingent on environmental measures, while others keep on delaying as the ice melts. Two months after France decided to grant €7 billion EUR to airline, Air France, the Netherlands came to the rescue of KLM with €3.4 billion EUR in state aid. The French government attached green strings to its support of Air France, but the Dutch government still seemed to consider the sky the limit and asked only for symbolic environmental measures. Lack of leadership The importance of attaching sustainability criteria to financial support needs to be interpreted against the backdrop of a lack of business leadership in making sustainability transitions that adversely affect their vested interests. While businesses are great at implementing practices that stimulate both environmental and financial gains (the ‘win-win’ opportunities, such as serving environmental consumers), they shy away from those that adversely affect their ongoing business. And they often focus on the short term. For instance, companies owning huge unexploited oil and gas fields will not voluntarily abandon these assets. Shell beats the sustainability drum, and its investments in renewables have recently taken off, but the amounts involved still dwarf those it dedicates to new fossil fuel projects. History teaches us that huge reductions in greenhouse gas emissions have never resulted from climate change policies alone. They have often been a by-product of public policy decisions or political events, including the UK’s closure of unprofitable coal mines and privatisation of the electricity
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