Do your company’s words speak louder than actions when it comes to sustainability?
With her “man on the moon moment” for Europe, Ursula Von der Leyen launched the European Green Deal in 2019. And with it, the ambitious target to make the entire continent climate neutral by 2050. But despite the complex regulatory landscape and EU Taxonomy that have since emerged, there remains a huge challenge in front of us. One that private companies and sustainability-minded execs need to step up and meet head on.
The EU made a promise of 1 trillion Euros to invest in sustainable businesses and ‘clean’ industries. But as Andreas Rasche, Associate Dean for the Copenhagen Business School (CBS) Full-Time MBA Programme points out, it is easier said than done.
“Which are the clean sectors? What are the sustainable activities? This is something we debate on our MBA programmes. Is nuclear sustainable, for example? It has low emissions, yes, but what about the waste? There is still disagreement around which economic activities can be classified as environmentally positive. The EU taxonomy has been devised to tackle this. It is crucial to determine which activities should belong, and which should be left out. Here in mainland Europe, sustainability in business is a paramount conversation.”
“Societal expectations have increased,” continues Rasche, “it is not like 10 years ago, corporations can’t just pay lip service to sustainability, so-called greenwashing – making big promises that we have no way to measure. Nowadays stakeholders will be looking for the actions behind their words. And not only that, the proof by means of reporting, regulation and the new Taxonomy.
“At CBS, our highly regarded MBA / EMBA programmes incorporate sustainability into the heart of their teachings. We do not rely on electives for something of this pivotal importance. By helping our participants understand the impact of this subject on everything they will do in the future, and by equipping them with the tools and language required, can we expect them to take up the mantel and truly make a difference.”
“On a macro level we can use the Taxonomy to help reorient money flows into ‘clean’ sectors; to ensure we are focusing on the right things. But it is vital on an individual investor level, too. Banks, investment funds and other external stakeholders have a way to see, objectively, where they can find the most sustainable investments and crucially, what percentage of their portfolio is aligned with truly green activities. It gives both confidence and accountability, preventing greenwashing by investors and corporations alike.
Europe leading the way
Copenhagen is a pioneer in urban sustainability. It will be the first carbon neutral capital in the world, with many significant businesses recognised as corporate leaders in sustainable business practice.
“There is no doubt that the transition to a more sustainable model is a top priority for businesses and countries across Europe,” asserts CBS Blue MBA alumnus, Bo Cerup-Simonsen, CEO, Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping.
“We are leading the way in Denmark, and perhaps nowhere is this transition being more keenly pursued than in the shipping industry. Our sector is making incredible strides with clear goals and targets for low carbon operations, and it is important that it is not just talk or best intentions. It is key that the transition pathway is laid out based on independent research and the taxonomy helps us to demonstrate the advances we are making and enables us to inform and inspire other industries.”
Making a difference on a global scale
EU regulation raises the bar globally for labelling ESG investments, making EU fund managers more likely to push back on those elsewhere, requesting data to back up their sustainability claims. Will we see a long-term global convergence of policies in the future, where the EU’s regulations align with the likes of China and the US?
“Well, it is possible,” says Rasche. “Perhaps we’re more likely to get there on the environmental side of things, but as far as the social side – the impact of businesses on people – is concerned, I feel we’re some way off. In the meantime, I see companies internally making progress, learning and improving. But is this enough to make the world a sustainable place?
“We need more leaders to take this seriously. Only then can we hope to make our big ambitions a reality.”