Speech by Tine Roed, Deputy Director General at DI on the environmental dimension of the SDG’s in Europe.

22. november 2016

Speech by Tine Roed, Deputy Director General at DI on Implementing and monitoring the environmental dimension of the SDG’s in Europe. (Nyt Europa – 21. november, Europæiske Miljøagentur, Kongens Nytorv 6.) 

 

[Setting the Scene – Sustainable Development Goals SDG’s/Global Goals and Business]

The world faces a number of challenges, which range from climate, water and food crises, to poverty, conflict and inequality. These challenges are addressed in The Sustainable Development Goals, which also provide a common framework for collaboration to achieve the goals.

I see the challenges written down in the goals as an opportunity for business – because the Global challenges are in need of solutions that the private sector can deliver. The goals therefore represent a large and growing market for business innovation. – Innovation that is in the rush to transform business models and systems for the future.

All companies – no matter how large or small, and regardless of their industry, can contribute to the SDGs.

It is vital that business wanting to work for the achievement of the goals, first of all make sure that they do business responsibly, and then pursue opportunities to solve societal challenges through business innovation and collaboration.

Confederation of Danish Industry has supported the UN Global Compact since 2001, and we are the Danish Contact Point to the organization. We recommend companies, to incorporate the ten principles of Global Compact into their strategies and operations, -understanding that good practices and innovation in one area cannot make up for doing harm in another. The environmental dimension is therefore both in the area of reducing risk for negative impact and to seize opportunity to develop new products and solutions.

Two weeks ago, we held a large conference highlighting Danish Pioneers for Sustainability. We believe that finding solutions to future challenges will be the business of tomorrow.

[World Changes]

Business in general face a great number of changes; Robots have become faster and smarter – even intelligent. On a global scale, we connect as never before, and can print more and more objects and construct things with 3D printers. Digitalization is changing the rules of the game and the ways we do business. New platforms and technologies are getting popular and gain large amounts of users within very short time-frames. It only took Pokémon Go 19 days to have 50 million users globally. In comparison, it took 75 years to have the same amount of users of the telephone.

Data is said to be our new resource. Products that we have previously used, no longer exist, and now substituted by digital solutions. We no longer use CD’s or videotapes and seldom send letters, but instead stream music, movies and email each other. This is actually good for the environment, since we no longer need to produce these products (CD’s, paper for letters and so forth)

All these changes are opportunities for Danish Business. We not only have to be resilient and robust – we also to make use the great potential all these rapid changes provide.

[New digital solutions]

Digitalisation can be an important factor for the achievement of the Sustainable Development Goals.

At the conference two weeks ago, we had a breakout session focusing on digitalization and sustainability. The session provided numerous examples of small and large Danish businesses, which provide solutions in achieving the goals.

New digital solutions are expected to have more and more impact and outreach. In relation to goal 3 – Good Health: 1,6 billion people, according to an Accenture study, will have access to the health system through e-health platforms in 2030. Likewise, the potential for e-learning platforms are enormous. Digitalisation makes learning and Shealth more assessable.

In relation to goal 7, a Danish start-up can estimate the potential for solar cells.

This brings us to energy and climate that are the topic of today’s session.

[Energy and Climate]

Energy and Climate are factors that seriously affect us. Three of the 17 goals relate specifically to energy and climate.

Goal 7. Ensure access to affordable, reliable, sustainable, and modern energy for all.

Goal 11. Make cities and human settlements inclusive, safe, resilient and sustainable.

Goal 13. Take urgent action to combat climate change and its impacts.

The work to promote these goals through international collaboration is not new. Nevertheless, the SDG’s further highlight the importance of this work.

As I see it, the challenge is clear:

We are today 7 billion people on the planet. Already in 2050, we will be more than 9 billion.

This will put more pressure and increase energy consumption significantly.

The majority of the population will live in cities. We have already moved past the point of 50% urbanization and are heading for a still higher proportion of people living in cities.

We work hard to improve energy efficiency and move into renewable energy to ease the pressure on the world’s climate, caused by the increased energy consumption.

The question is how to bring power to the poor people who do not have access the electricity grids today. Moreover, how the energy system can accommodate the growing demand from the booming middle class all over the world – without harming our climate further?

UN’s climate negotiations

This agenda is not new at all. It is being addressed at the COP22 meeting in Marrakesh, Morocco, which takes place as we speak.

Let me reflect a bit on UN’s climate negotiations. They were initiated at the Rio de Janeiro Summit on Sustainable Development back in 1992 and 5 years later, at a UN Climate Summit in Kyoto, Japan, a global framework to counter climate change was born. Negotiations have taken place year by year, making only small progress each year. We all know how frustrating it can be to be part of a broad framework based on consensus – as exemplified by the climate summit in Copenhagen in 2009 (COP15) where high expectations had been built but no global deal was delivered.

Last year, at COP21 in Paris, where I had the privilege to be present myself, world leaders reached a global agreement to mitigate climate change. The agreement had strong commitment from most major partners on the world scene – including the two largest CO2-emitters USA and China. The Paris agreement entered into force on Friday 4th November 2016, and even though there might be changes in the US position under Trump’s administration, we expect this agreement to have a significant impact in the coming years.

You might ask, if there is a trade-off between Economic growth and climate goals?

Some scepticism towards climate goals stem from a belief that there is always a cost to setting political goals. Can you put restrictions on energy consumption without jeopardizing economic growth of companies, cities and countries? There is no clear-cut answer to this. However, I believe that the Danish case is an example of decoupling of economic growth from energy consumption. Denmark has managed to almost double its GDP from 1980 until today, while maintaining constant energy consumption.

Therefore, I would argue that by well-planned interventions at the appropriate level, it is feasible to realize major energy savings without sacrificing society’s economic growth.

I hope that the SDGs will help many countries around the world in setting realistic goals for their energy sectors. Such goals are not always in place around the world. Therefore, the act of setting these goals is already an opportunity for societies to plan interventions for energy savings and renewable energy sources in ways that fit their particular situation. Such planning might help create a stronger and more reliable energy supply, which we know has a high economic importance to companies and citizens.

Companies act

At the practical level, many companies have invested significantly in developing new, efficient and green energy solutions. Denmark has a strong position within efficient and green energy technologies. 11% of Danish exports of goods consists of energy related products. This is the highest share among the EU15-countries – and probably in the world.

Denmark is therefore an example of a first mover in changing our own energy supply and climate related policies and now our companies benefit from exporting the green solutions abroad as these countries also raise the awareness of and investment in green technologies.

Therefore, apart from the climate arguments, there is specific Danish business interest in setting climate targets on an EU and global level. It expands the market. When they are designed in a long-term perspective, and with careful considerations to the overall competitiveness of the involved sectors, it is possible for business to implement it at reasonable cost. This is why DI is a firm supporter of the Danish energy agreement from 2012, EU’s energy union and the UN Climate framework.

In conclusion, I believe that the SDGs related to energy are positive, necessary and may become an important driver for new investments in the future.

[Circular Economy]

Another example of the environmental dimension and business innovating in relation to global challenges is the circular economy. The rising population and global middle class not only put pressure on energy consumption – they also put pressure on the use of our planets limited resources. For some companies the increased pressure not only implies rising prices but also vulnerability in access to vital resources.

Circular economy creates new opportunities for innovation; new business models, growth and jobs, and strengthens companies’ competitiveness. Ultimately, circular economy strengthen Danish companies on global markets.

Companies engage in circular economy because it makes good sense business-wise. Companies know what resources can be reused and have an important role to play – both in identifying and in delivering innovative solutions.

Companies are already thinking in new business models for example by innovating new products and materials, working together across different sectors, and closing the loop by reusing resources.

However, in order to scale up circular economy, the right framework must be in place. We need relevant policies and regulations, which support new business opportunities.

In some areas, regulative barriers hinder the transition to a circular economy. These barriers must be identified and removed so that legislation fit to the circular economy where ‘waste is not waste – but waste is a resource’.

For example by having a well-functioning single market for secondary raw materials. This is not the case today where uneven definitions and end-of-waste criteria hinder the free flow of resources across borders.

Solving these issues should be a key priority.

Scaling up circular economy requires that all relevant actors in the value chain find new ways to co-operate. The transformational costs can be very high for the individual company. Therefore, classical instruments such as regulation are not appropriate.

We need to think differently – we need to take a new approach in order to grasp the opportunities offered by the circular economy. Circular economy calls for new solutions – and news ways of working together in order to find the right solutions.

[Sharing economy]

Access instead of ownership can be good business for business and society. If you can share equipment and hardware, more companies and employees can have access to the newest and the best. Thereby they can also provide better customer solutions.

[SDG Compass]

This agenda is important to Confederation of Danish Industry. Therefore, we have translated a SDG Compass into Danish in collaboration with the World’s Best News.

The Compass guides companies on how they can align their strategies as well as measure and manage their contribution to the realization of the SDGs. The SDG Compass presents five steps, which assist companies in maximizing their contribution to the SDGs: 1. understanding the SDGs; 2. defining priorities; 3. setting goals; 4. integrating sustainability, and 5. reporting.

The SDGs present an opportunity for business-led solutions and technologies to be developed and implemented to address the world’s biggest sustainable development challenges.

As the SDGs form the global agenda for the development of our societies, they will allow companies to demonstrate how their business can help advance sustainable development, both by minimizing negative impacts, and by maximizing positive impacts on people and the planet.

Companies can use the SDGs as an overarching framework to shape their strategies, goals and activities. As the goals are an articulation of global challenges that need to be addressed by 2030, the goals can help business identify future business opportunities.

The SDGs define a common framework of action and language that will help companies communicate more consistently and effectively with stakeholders about their impact and performance.

[Summary]

Digitalization, energy and circular economy all provide new solutions to challenges written in the Sustainable Development Goals. New innovative ways of doing things can provide significant contributions to the achievement of the Sustainable Development Goals. However, the new ways of doing business can also prove to be a very good business case in the future. Therefore, the goals represent an opportunity for Danish business.